Paraguay, India promoting bilateral relations

Paraguay Special Report 2019 By Dr. Stuti Banerjee*


Paraguay, India promoting bilateral relations

The two nations pledged to work collectively against the menace of terrorism. “The leadership of Paraguay said that they are on the same page as India as far as the issue of terrorism is concerned and extended heartfelt condolences to those who had lost their loved ones in the Pulwama terror attack. They stated that India could always count on Paraguay´s support in the fight against terrorism and in voicing India’s concerns on terrorism in the international fora.”

Over the past few years, India has been deepening its engagement with the countries of Latin America and the Caribbean region. The government under the leadership of Prime Minister Narendra Modi has tried to bring ‘focus on Latin America’ through more and more engagements, including high-level visits. In July 2014, Prime Minister Modi visited Brazil to attend the annual BRICS summit and met several Latin American heads of States on the sidelines of the summit. Taking the momentum forward, Vice President M. Venkaiah Naidu, recently visited Paraguay and Costa Rica.

Naidu became the first ever Vice President to visit Paraguay and in a way his visit highlights the need for India to engage with other nations of the region. In close to sixty years of diplomatic relations, India and Paraguay have shared cordial relations, with few divergences.

Trade is one of the main drivers of the bilateral relations which has increased almost ten-fold over the last ten years and reached $334 million in 2017-18 from $40 million in

2008-09. Soyabean oil accounts for over 90 percent of Paraguay’s exports to India. Main export items from India to Paraguay include iron and steel, plastics, chemicals, vehicles and auto parts.1 As India tries to increase its global and economic footprint in the region, Paraguay provides it with a gateway to engage with other nations of the region. LAC is also known for regional integration. Paraguay is a member of some of the prominent regional blocs such as MERCOSUR, UNASUR, the CELAC and OAS. A close relationship would allow India to interact with other members of these groups and expand its outreach. There are advantages to producing in Paraguay for MERCOSUR markets in various sectors including plastics, textiles, metalwork and others. Further, Paraguay has a young workforce (66 percent of the population is younger than 35 years of age), quality and low-cost materials, macroeconomic stability, inexpensive clean power, sustainable economic growth and access to other markets. In short, Paraguay boasts the best investment climate in the region, along with a stable, solvent, predictable and reliable economy.2 It also provides India with an opportunity to increase its ITC programmes which have been a success in other nations of the region. India can assist in providing IT training and helping set up an IT base in cities as identified by Paraguay.

Taking the relationship forward, there are a number of challenges that the two nations face that are similar and also global in nature. The United Nations has applauded Paraguay for the importance that it has given to its native legumes to help fight hunger. With nutritional security a major concern for the government of India, Paraguay and India could work together to ensure that farmers are provided incentives to grow native food pulses and legumes that are part of the traditional diet of the people. This would be a cost-effective way of addressing both hunger and nutritional security. Paraguay is also a powerhouse in terms of agriculture production. India is an agriculture based economy with a majority of its population either directly or indirectly linked to the sector. In such a situation, agriculture and agro based industries should be explored for future collaboration between the two nations. Precision agriculture could be explored, however, it needs to be noted that landholdings in India are smaller and thus the use of technology would have to be modified for Indian conditions. India and Paraguay can also focus on water saving irrigation methods along with research on cultivation of plants that can withstand water stress. India is also looking at bi-fertilisers and bio-pesticides but they need to be made more cost-effective for their large scale use.

India is using its space technology know-how to support its natural resource management, infrastructure planning, healthcare, education, emergency communication, disaster management support, and space and atmospheric science research. India and Paraguay could collaborate on space technology development to be used by local bodies to create an information base and provide various services.

It has to be acknowledged that there is a lack of adequate knowledge about Paraguay in India and of India in Paraguay. This gap needs to be urgently bridged to ensure that the two nations are able to look beyond a political and economic relationship towards one that has strong cultural and people to people roots. India also needs to build on its academic expertise in the LAC region. This will help India not only understand the region but also decipher the regionalism further. It was also a point that was highlighted in the Joint Press Release on the visit of the Vice President of India to Paraguay which stated that “...two nations would facilitate promotion of exchanges between academics and universities and also between travel professionals and stakeholders in tourism.”3 It has been reported that the University of Peace will be establishing a Yoga chair, but a lot more has to be done with a concentrated study on India.

Tourism could be another area of mutual benefit. The UN World Tourism Organisation (UNWTO) predicts that India will account for 50 million outbound tourists by 2020. They are also one of the highest spenders per individual. As more and more Indians have disposable income, they are willing to spend on vacations abroad. A large part of these outbound tourists are willing to explore new countries and are into adventure tourism. Another great avenue to generate interest among Indian tourists is through Indian films. It has been noticed that visitors increase exponentially to countries where Indian films have been shot. As Indian aviation connects its smaller cities better, the number of international tourists from India will continue to rise.

As the world battles climate change, India has made ambitious plans to incorporate renewable energy into its energy mix. The government has set a target of installing 100 GW of solar capacity by 2022 in the country. A target of installing 175 GW of renewable energy capacity by the year 2022 has been set, which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.4 In this solar and wind energy are forming the main bulwark of India’s renewable energy drive. Paraguay established renewable energy target in its National Development Plan 2014–2030. The country’s goal is to reach 60 percent of renewable energy consumption in total energy consumption by 2030. Additionally, Paraguay aims to reduce by 20 percent consumption of fossil fuels in the country’s total energy consumption by the same year.5 India, as part of the International Solar Alliance, is working with like-minded nations to collectively address key common challenges to the scaling up of solar energy. Paraguay has agreed to join the alliance providing another platform for promotion of investment and exchange of R&D. Paraguay has replaced all thermal power by hydropower in the 1970s. Now the country entirely relies on two hydroelectric plants for electricity. Collaboration in hydroelectric power generation would be one example of cooperation between the two as India along with its neighbours is setting up hydroelectricity plants and developing an energy exchange region.

In the international arena, the two nations have similar views on addressing the issue of terrorism. Throughout the Delegation Level Talks during the Vice President’s visit, the Paraguayan leadership decried the brutal terrorist attack that took place in Pulwama. The two nations pledged to work collectively against the menace of terrorism. “The leadership of Paraguay said that they are on the same page as India as far as the issue of terrorism is concerned and extended heartfelt condolences to those who had lost their loved ones in the Pulwama terror attack. They stated that India could always count on Paraguay´s support in the fight against terrorism and in voicing India’s concerns on terrorism in the international fora.”6

The above are but a few areas of cooperation between India and Paraguay. They provide with new areas of engagement and deepening of South-South Cooperation. India and Paraguay face many similar internal developmental challenges. These include high-income inequality, rising population, unemployment and poor public health and education systems. They have a lot to learn from each other by engaging in similar work to isolate and scale up best practices in each of these sectors. The India economy has seen steady growth and it is predicted that, despite the slowdown, it will be one of the largest economies in the next two decades. The physical distance between India and Paraguay is no longer a barrier. Trade and investments have been growing well. Political exchanges have brought the relations into the spotlight; it is the right time to further cement them with a thriving people to people network. There are complementarities between India and Paraguay that need to be exploited to build a robust relationship for the future.

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Author

* Author is a Research Fellow, Indian Council of World Affairs, New Delhi. Views expressed are personal.

References:

1 Huma Siddiqui, “ LatAm outreach: Vice President Venkaiah Naidu to visit Paraguay, Costa Rica; here’s why it’s important,” https://www.financialexpress.com/defence/latam-outreach-vice-president-venkaiah-naidu-to-visit-paraguay-costa-rica-heres-why-its-important/1504471/, Accessed on 02 May 2019.

2 Ines Martinez Valinotti, “Paraguay: For investment and renewable energy,” http://diplomatonline.com/mag/2018/07/paraguay-for-investment-and-renewable-energy/, Accessed on 02 May 2019.

3 Ministry of External Affairs, Government of India, “Joint Press Release on the visit of the Vice President of India to Paraguay,” https://www.mea.gov.in/bilateral-documents.htm?dtl/31120/Joint_Press_Release_on_the_visit_of_the_Vice_President_of_India_to_Paraguay, Accessed on 02 May 2019.

4 Press Information Bureau, Government of India, Ministry of New and Renewable Energy, “A target of installing 175 GW of renewable energy capacity by the year 2022 has been set. 100 GW of solar capacity by 2022 in the country. The Government is promoting development of solar energy in the country by providing various fiscal and promotional incentives,” http://pib.nic.in/newsite/PrintRelease.aspx?relid=180728, Accessed on 03 May 2019.

5 International Energy Agency, “Paraguay’s National Development Plan 2014-2030,” https://www.iea.org/policiesandmeasures/pams/paraguay/name-157639-en.php?s=dHlwZT1yZSZzdGF0dXM9T2s,&return=PG5hdiBpZD0iYnJlYWRjcnVtYiI PGEgaHJlZj0iLyI-SG9tZTwvYT4gJnJhcXVvOyA8YSBocmVmPSIvcG9saWNpZXNhbmRtZWFzdXJlcy8iPlBvbGljaWVzIGFuZCBNZWFzdXJlczwvYT4gJnJhcXVvOyA8YSBocmVmPSIvcG9saWNpZXNhbmRtZWFzdXJlcy9yZW5ld2FibGVlbmVyZ3kvIj5SZW5ld2FibGUgRW5lcmd5PC9hPjwvbmF2Pg, Accessed on 03 May 2019.

6 Press Information Bureau, Government of India, Vice President’s Secretariat, “Paraguay is an important partner of India in the Latin American and Caribbean region: Vice President,” http://pib.nic.in/newsite/PrintRelease.aspx?relid=189232, ,Accessed on 02 May 2019.

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