Argentinian President praises Paraguay’s economic progress.

Sept 2025 : Argentine President Javier Milei praised Paraguay’s economic progress and highlighted the political alignment between the two countries. During his speech before Congress in Asunción on Wednesday, the Libertarian leader highlighted that while Paraguay has experienced sustained growth and controlled inflation over the past two decades, Argentina has declined economically.

“While you have not stopped growing, we have deepened our decline. I can’t help but think about what my country can learn from you in reckoning. If we compare the last 20 years, we will find almost diametrically opposite results”, Milei stated.

Milei noted the success of Paraguay’s maquila regime, contrasting it with Argentina’s “deficit” national industry. He also underscored the political similarities between his government and President Santiago Peña’s, including their shared support for Israel and their decision to open embassies in Jerusalem.

The Maquila regime is a system designed to promote industrial development, job creation, and export growth, which allows companies to produce goods or provide services on behalf of a foreign company under an international contract, with all production destined for export. It was established by Law No. 1064 in 1997 and regulated in 2000 by Decree No. 9585.

Companies under this regime enjoy preferential conditions, including exemptions on import duties for raw materials and machinery. The mechanism has significantly contributed to Paraguay’s economy, generating thousands of jobs and boosting exports. However, everything stemming from the Maquila scheme must be exported, depriving local consumers of these goods.

Milei emphasised that, thanks to the maquila regime, Paraguay has managed to get the most out of its local industry, increasing exports and generating genuine jobs. Meanwhile, Argentina spent the last century financing a loss-making industry from the state, due to the ideological whims of politicians in power, rather than market demands.

The Argentine president also outlined ongoing and future bilateral projects, such as the construction of a new international bridge, the study of exporting natural gas from Argentina to Paraguay and Brazil, as well as agreements to improve the efficiency of the Paraguay-Paraná Waterway.

Milei stated that he hoped this cooperation would improve the lives of citizens in both countries and serve as a regional example of trade openness. “It is our deepest desire to improve the quality of life of our peoples, ensuring that more Argentine goods and services can access the Paraguayan market and vice versa”, the Argentine head of State pointed out while assuring that cooperation between Argentina and Paraguay can become a “regional example of trade openness and shared development”.

He also praised Paraguay’s ability to tame the scourge of inflation, while Argentina ended 2023 on the brink of another inflationary process, which was avoided by his administration. “Beyond the ties that bind us, both nations have presidents who understand that the state should not be an obstacle to development. Both have returned the state to its essential function, which is to create conditions for private initiative to flourish”, Milei also said.

It is noteworthy that, Maquila operations are exempt from any tax or fee that affects the process from the import of raw materials and inputs, the manufacturing of products, to their export, including VAT. The law establishes a single tax, with a rate of 1% applied to the value of the service invoice issued by the maquiladora to the parent company, or to the value of the export invoice when the goods are sold directly to the final customer of the maquiladora. matrix (on its own and order). The tax is applied to the value that is greater.

These operations are carried out under the maquila contract, signed between a company domiciled within the national territory (maquiladora) and another domiciled abroad (parent company). Through the maquila, national or foreign investors can introduce raw materials into the country for the purpose of being assembled, repaired, improved, worked or processed for subsequent export, once the added value has been incorporated.

Paraguayan legislation does not impose restrictions on the types of products or services included in the maquiladora industry. The national policy of maquiladora activity in Paraguay is regulated and controlled by the National Council of Export Maquiladora Industries (CNIME).

The Maquila operations benefits are:

• Single Tax of 1% on the national added value, or on the value of the export invoice issued by the maquiladora on behalf of and by order of the parent company, whichever is greater.

• Suspension of tariffs and taxes on the import of raw materials and inputs, and capital goods.

• Recovery of VAT (tax credit) paid on the purchase of goods and services in the national market.

• Possibility of developing maquila in Paraguayan industries that have idle capacity.

Team Maverick