The Paraguayan government and Korean business leaders gathered recently at the Seoul Club to listen to a country presentation and speech by Paraguay Foreign Minister Hector Lacognata during his recent visit.

"Paraguay possesses the biggest potential in the region of South America," said Lacognata during his opening speech. "It is the land of opportunity."

He believes that there is still much to be accomplished between the two countries and that the Paraguayan market can open up new opportunities for Korean firms.

Lacognata also pointed out that the Paraguayan political change in April 2008 helped launch an important breakthrough in improving its domestic situation.

Director general of the Foreign Trade Division of Paraguay Brigido Lezcano also highlighted some of his country's strengths and incentives for investing into the Paraguayan market.

The favorable climate and its strong labor force were among the first introduced.

Besides energy, some potential agricultural products in which Korean firms can invest in are tropical fruits and vegetables, edible oils, forest products, meat and leather, biofuels and tourism.

He explained that the Paraguayan corporate and personal income taxes stand at 10 percent, lower than those of other countries in the region, according to the statistics provided during the presentation.

"We are attracting more foreign direct investment since 2005 thanks to many incentives," he said.

But the majority of the FDI has been made from Europe, Canada, the United States and Mexico. Investments from Asia have been scant.

Chairman of KOIMA Kim Wan-hee told The Korea Herald, "So far, the amount of trade between Korea and Paraguay has been almost unnoticeable.

"However, Paraguay can serve as a strategic location (for Korean businesses) due to its fertile land, favorable natural environment without any natural disaster, and its central location in South America.

"Before China and Japan make any significant move, we hope that Korean firms can occupy good investment and trade opportunities based on a strong support from the government and also from KOIMA. This way, we expect to see improved bilateral trade relations in the future."

Yet he believes that Paraguay still has hurdles to overcome in making its market more attractive.

"Just like many other developing countries, Paraguay still suffers from corruption and a sharp deviation of incomes between economic classes. Also it lacks programs to promote trade and exchanges in the private sector.

"I believe the Paraguayan government should take the initiative in managing programs to enhance trade," the chairman said.