ASUNCIÓN, Paraguay – Paraguayan think tank "Horizonte Positivo" (Positive Horizon) emphasized that the government should prioritize in-depth reforms this year that can strengthen social cohesion and have a tangible impact on citizens' lives. The organization specifically called for swift structural reforms in four key sectors: fiscal funds, public transportation, the justice system, and energy security, noting that leadership that fosters intersectoral dialogue is essential for these reforms.
"These broad reforms, through a ripple effect, will play a decisive role in ensuring Paraguay's sustainable development," stated Horizonte Positivo.
Fiscal Sustainability at Risk
"One of the country's biggest challenges is the sustainability of the pension system," warned Horizonte Positivo, adding that "the Fiscal Fund (Caja Fiscal), which pays pensions to hundreds of thousands of retirees, continues to run a growing deficit." In 2024, the fiscal deficit reached 42%, exceeding 2.2 trillion guaraníes (approximately $281.9 million USD), nearly double the deficit reported in 2023.
According to the latest reports up to February of this year, the Fiscal Fund recorded a deficit of 232.517 billion guaraníes (approximately 47%), with accumulated losses since the beginning of the year amounting to around $51.5 million USD (at the current exchange rate).
Analysis by the Ministry of Economy and Finance (MEF) projects that, if the current situation persists, the Fiscal Fund's reserves will be depleted by 2027. In this scenario, the government would have to cover the entire fiscal deficit with public funds, which would place a significant burden on taxpayers and hinder the government's fiscal consolidation plans. "There are no simple solutions, but we must urgently begin discussions on how to ensure the system's viability without compromising the quality of life for current and future generations of retirees," emphasized Horizonte Positivo.
Unresolved Challenge: Public Transportation
The second reform challenge is the public transportation system, a long-standing source of citizen dissatisfaction. Horizonte Positivo cited a survey by the National Institute of Statistics (INE) showing that only 30% of the population uses public transportation, with most citizens preferring motorcycles or private cars due to insufficient bus frequency (49.6%), lack of punctuality (18.1%), and high fares (8.7%).
"In addition to the quality of service issues, the problem of increasing subsidies is also serious," stated Horizonte Positivo. Since the subsidy system was introduced in 2011, the government has allocated over $143 million USD to maintain the public transportation system, but service improvements have been minimal. In 2024, public transportation subsidy expenditures amounted to $46 million USD, a significant increase compared to the $10 million USD in 2020.
The Vice Minister of Transportation has presented a draft bill aimed at modernizing the public transportation system and has been gathering feedback. This reform proposal includes technological innovations such as the introduction of an integrated fare system to reduce transfer costs and route optimization to expand service coverage.
"These reforms must be comprehensively designed through the participation of the government, transportation operators, civil society, the private sector, and citizens," emphasized Horizonte Positivo. "Only then can we build an efficient, sustainable, and accessible public transportation system for all."
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