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Paraguay will improve employment opportunities for youth and women with IDB support

$5 million loan will benefit at least 17,800 people over five years

The Inter-American Development Bank (IDB) approved a loan for $5 million to support Paraguay’s efforts to expand the coverage and effectiveness of its employment programs as a means to improve labor productivity and employment. The program will provide new forms of training to youths, half of whom are expected to be women.

The operation will finance improvements in the capacity of the General Employment Office (DGE, after its initials in Spanish) of the Ministry of Justice and Labor to provide orientation, training, and placement services through a one-stop-shop facility. The program will assist some 17,800 people during its five-year implementation period. After that, additional people will continue to benefit from the new facilities and trained staff.

"The lessons learned in the sector indicate the importance of progressing through stages, creating and evaluating management processes that can scale up as each stage is completed," said Veronica Alaimo, IDB project team leader. "We see this operation as part of a gradual process that will consolidate and expand employment policies aimed at improving job opportunities for Paraguayan workers."

The program seeks to increase job placement rates in formal employment by 10 percent and raise hourly wages of participating workers by 7 percent over that of a control group that finds employment through other means.

Investments will be made in infrastructure, furniture and equipment, information systems, and improvements in the DGE’s capacity to provide services.The program will create new approaches for training a target population in a defined geographic area that will include quality control mechanisms for managing, monitoring, and evaluating results.

The operation aims to consolidate and expand the DGE’s national coverage and contribute to the effectiveness of public policy by increasing the quantity and quality of labor market information and providing it to businesses and people seeking employment.

The IDB loan for $5 million was extended for a 25-year term with a five-year grace period and a variable interest rate based on LIBOR. Counterpart funding totals $5 million.