Background Notes: Paraguay

PA/PC Source: Office of Public Communication, Bureau of Public Affairs Date: May 15, 19905/15/90 Category: Country Data Region: South America Country: Paraguay Subject: Cultural Exchange, Resource Management, Military Affairs, History, Trade/Economics, International Organizations, Development/Relief Aid [TEXT] Official Name: Republic of Paraguay

PROFILE

Geography
Area: 406,750 sq. km. (157,047 sq. mi.); about the size of California. Cities: Capital-Asuncion (pop. 700,000). Other cities- Caaguazu, Coronel Oviedo, Pedro Juan Caballero, Concepcion, Encarnacion, and Ciudad del Este. Terrain: East of Paraguay River- grassy plains, wooded hills, tropical forests; west of Paraguay River (Chaco region)-low, flat, marshy plain. Climate: Temperate east of the Paraguay River, semiarid to the west.
People
Nationality: Noun and adjective-Paraguayan(s). Population (1988): 4 million. Annual growth rate: 3.1%. Ethnic groups: Mixed Spanish and Indian descent (mestizo) 95%. Religions: Roman Catholic 97%, Mennonite, and other Protestant denominations. Languages: Spanish, Guarani. Education: Years compulsory-7. Attendance-83%. Literacy-81%. Health: Infant mortality rate-43/1,000. Life expectancy-66.8 yrs. Work force (1.6 million): Agriculture-44%. Industry and commerce-34%. Service-18%. Government-4%.
Government
Type: Constitutional republic with powerful executive branch. Independence: May 1811. Constitution: August 1967. Branches: Executive-president. Legislative-Senate and Chamber of Deputies. Judicial-Supreme Court of Justice. Administrative subdivisions: 19 departments. Political parties: Colorado, Authentic Radical Liberal, Radical Liberal, Febrerista, and numerous smaller parties not represented in congress. Suffrage: Adults age 18 and older. Central government budget (1990): $655 million. Defense (1990): 10.7% of budget. National holiday: Independence, May 15; other holidays celebrated Jan. 1, Feb. 3, Mar. 1, Mar. 27-28, May 1, June 12, Aug. 15, Dec. 8 and 25. Flag: Horizontal stripes of red, white, and blue; one side bears the national coat of arms; the other, the treasury seal.
Economy
GDP (1988): $4 billion. Annual growth rate (1989): 6.4%. Per capita GDP (1988): $978. Avg. inflation rate (1988): 25%. Natural resources: Hydroelectric sites, forests. Agriculture (1988- 27% of GDP): Products-meat, corn, sugarcane, soybeans, lumber, cotton. Arable land-9 million hectares, of which 30% cultivated. Industry (1988-16% of GDP): Types-sugar, cement, textiles, beverage, and wood products. Trade (1988): Exports-$1.1 billion estimated (of which $506 million is registered): meat and meat products, lumber, cotton, soybeans, vegetable oil, coffee, tobacco, tannin, yerba mate. Major markets-Brazil, Argentina, EEC, US (3.4%). Imports-$1.2 billion estimated (of which $767 million is registered): machinery, fuels and lubricants, transportation equipment. Major suppliers-Argentina, Brazil, EEC, US (16.7%), Japan. Official exchange rate (Oct. l989): 1,170 guaranies=US$1. Fiscal year: Jan. 1 through Dec. 31.
Membership in International Organizations
UN, Organization of American States (OAS), Latin American Integration Association (LAIA; formerly LAFTA), INTELSAT, INTERPOL

PEOPLE

Paraguay's population is distributed unevenly throughout the country. The vast majority of the people live in the east, most within 160 kilometers (100 mi.) of Asuncion, the capital and largest city. The Chaco, which accounts for about 60% of the territory, is home for less than 4% of the population. Ethnically, culturally, and socially, Paraguay probably has the most homogeneous population in South America. About 95% of the people are of mixed Spanish and Guarani Indian descent. Little trace is left of the original Guarani culture except the language, which is understood by 90% of the population. About 75% of all Paraguayans speak Spanish. Guarani and Spanish are both official languages. A number of foreign groups, primarily Germans, Japanese, Koreans, Brazilians, and Argentines, have settled in Paraguay. About 1,500 nonofficial US citizens live there.

HISTORY

Pre-Columbian civilization in the fertile, wooded region that is now Paraguay consisted of numerous seminomadic, Guarani- speaking tribes of Indians, who were recognized for their fierce warrior traditions. They practiced a mythical polytheistic religion, which later proved amenable to blending with Christianity. The Spanish explorer, Juan de Salazar founded Asuncion on the Feast Day of the Assumption, August 15, 1537. The city eventually became the center of a Spanish colonial province encompassing most of southern South America. Paraguay eventually declared its independence by overthrowing the local Spanish authorities in May 1811. The country's formative years were dominated by three strong leaders: Jose Gaspar Rodriguez de Francia (1814-40), Carlos Antonio Lopez, (1841-62), and his son, Francisco Solano Lopez. The latter waged a war against Argentina, Uruguay, and Brazil (War of the Triple Alliance, 1864-70) in which Paraguay lost half its population, and Brazilian troops subsequently occupied it until 1874. From 1880 until 1904, a succession of presidents governed Paraguay under the banner of the Colorado Party. The Liberal Party seized control of the government in 1904 and ruled, with only a brief interruption, until 1940. Throughout the 1930s and 1940s, Paraguayan politics were characterized by the Chaco war, civil war, dictatorships, and periods of extreme political instability. Gen. Alfredo Stroessner assumed power in May 1954. He was elected to complete the unexpired term of his predecessor and was subsequently reelected president in 1958, 1963, 1968, 1973, 1978, 1983, and 1988. He ruled the country almost continuously under the state-of- siege provision of the constitution. When invoked, usually in political cases, state-of-siege measures effectively set aside habeas corpus and other legal guarantees. The Colorado Party, the military, and the government bureaucracy were the pillars of the Stroessner regime. The Liberal Party and the Revolutionary Febrerista Party, officially recognized in 1964, participated in the nationwide municipal elections in 1965. In 1966, another group of Liberals, known as the Radical Liberal Party, were permitted to participate, with other opposition parties, in the elections for delegates to a constituent constitutional convention. A new constitution was promulgated on August 25, 1967. On February 3, 1989, General Stroessner was overthrown in a military coup headed by Gen. Andres Rodriguez, who scheduled presidential and congressional elections for May 1. He was nominated as Colorado Party candidate and easily won. Seven other political parties ran candidates even though some of the parties were new to the democratic process and had little time to organize effective campaigns. The next general elections are scheduled for 1993.

GOVERNMENT

Paraguay's highly centralized government is based on the constitution promulgated in August 1967. The preponderance of power rests with the executive branch. The president, popularly elected for a 5-year term, is assisted by an appointed cabinet. The bicameral congress consists of a 36-member Senate and a 72-member Chamber of Deputies. Deputies and senators are elected concurrently with the president. Under Paraguayan electoral law, the party polling the largest number of votes in the congressional elections receives two-thirds of the seats in each chamber. The remaining seats are divided proportionately among the other contending parties. In the 3-month period when congress is not in session (from December 21 to the end of March), the president may issue decree- laws that must be submitted to the congress for approval when it reconvenes. A Council of State composed of representatives from various sectors of the society advises the president on the issuance of decree-laws. Paraguay's highest court is the Supreme Court of Justice. Its five judges are presidentially appointed. For administrative purposes, Paraguay is divided into 19 departments, each headed by a government delegate appointed by the president.
Principal Government Officials
President-Gen. Andres Rodriguez Ministers Foreign Affairs-Luis Maria Argana Interior-Gen. Orlando Machuca Vargas Finance-Enzo DeBernardi Education and Culture-Dionisio Gonzalez Torres Agriculture and Livestock-Hernando Bertoni Public Works and Communications-Porfirio Pereira Ruiz Diaz National Defense-Gen. Angel Juan Souto Hernandez Public Health and Social Welfare-Jaun Manuel Cano Melgarejo Justice and Labor-Alexis Frutos Vaezquen Industry and Commerce-Antonio Zuccolillo Minister Without Portfolio-Juan Ramon Chaves Ambassador to the United States and the Organization of American States (OAS)-Marcos Martinez Ambassador to the United Nations-Alfredo Canete Paraguay maintains an embassy in the United States at 2400 Massachusetts Avenue NW., Washington, DC. 20008 (tel. 202-483- 6960). Consulates are in Miami, New York, New Orleans, Chicago, Detroit, and Los Angeles.

POLITICAL CONDITIONS

Paraguay's two major traditional political parties, the Colorado and the Liberal Parties, have each ruled the country for prolonged periods. Fundamentally, little ideological difference exists between the two parties. Following his 1989 coup, Gen. Rodriguez immediately began implementing his promises of bringing democracy and a respect for human rights to Paraguay. Newspapers and radio stations closed by Stroessner were allowed to reopen and broadcast freely. Previously unrecognized and newly created political parties were given legal status. Dozens of independent labor unions were recognized. Candidates for congressional seats and the presidency were allowed to campaign freely. All of the major opposition parties decided to participate in the May 1 elections. The Colorado Party, as the highest vote getter, received two- thirds of the seats in each house of congress, 24 out of 36 seats in the Senate, and 48 out of 72 seats in the Chamber of Deputies. The PLRA received 19% of the ballots cast, thus obtaining 11 seats in the Senate and 21 in the chamber. The Febreristas obtained one seat in the Senate and 2 seats in the chamber while the Radical Liberal Party won a single seat in the chamber. All other parties were shut out.

ECONOMY

Paraguay is predominantly an agricultural country with no known significant mineral or petroleum resource. Agricultural commodities account for a major share of the country's exports. Particular obstacles to Paraguay's development include fluctuating prices for major export items, the long and expensive river or land routes that foreign trade must traverse, a small domestic market, and internal- and external-trade barriers. Despite these limitations, agricultural production has grown rapidly, especially cotton and soybeans for export. The economy has enjoyed relative price stability (inflation was held at 2%-3% in the 1960s), but the cost of living has begun to rise. During 1988, the inflation rate was 27.3% and the rate for 1989 was higher. Construction of the massive Itaipu hydroelectric project with Brazil greatly accelerated Paraguay's economic development. Work on the Yacyreta hydroelectric project with Argentina should further spur the economy and make Paraguay the world's largest exporter of hydroelectric energy. Per capita GDP declined in the early 1980s before rising to $978 in 1988. Paraguay's economy, while still heavily dependent on agricultural output, has grown steadily during the last several years and registered a solid 6.4% growth in 1988. Inflation accelerated in 1989, partially from some of the economic reforms undertaken by the Rodriguez government. The most dramatic reform taken in February was to eliminate the multiple exchange rate system and to adopt a floating, free market rate. With the elimination of this hidden subsidy to the parastatal corporations, the government has been forced to raise prices for gasoline, water, electricity, telephone service, and bus fares. Paraguay's external debt reached $2.4 billion by the end of 1988, equivalent to 56% of GDP. Debt service payments by the government during 1988 totaled $341 million, equivalent to 69% of recorded merchandise exports. Registered exports are expected to surge in 1989 as a result of record harvest of cotton and soybean and the elimination of the multiple exchange rate system that provoked exporters to smuggle their products out of Paraguay in previous years. Still, the debt service ratio (scheduled debt service to registered exports) in 1989 was about 50%. The Government of Paraguay negotiated in early 1989 a rescheduling of the $436 million it owed the Brazilian Government to stretch payments over 20 years with an 8-year grace period. It hopes to reschedule an additional $811 million of debt, of which $602 million was owed to other governments, mainly the Federal Republic of Germany and Japan, and $209 million was owed to foreign commercial banks. The balance of the government debt, $771 million, is owed to the World Bank, the IMF, and the Inter-American Development Bank. Paraguay also is interested in negotiating an IMF Standby program and a debt reduction or rescheduling agreement.

DEFENSE

The military comprises three branches: army, navy, and air force, with the army having the majority of personnel, resources, and influence. The army (about 15,000 personnel) is organized into three corps areas with six infantry divisions and three cavalry divisions. The navy's 4,000 personnel are divided among three service branches. The air force, the newest and smallest of the services, has approximately 2,000 personnel. Military service is compulsory.

FOREIGN RELATIONS

Paraguay is a member of the United Nations and several of its specialized agencies, the Organization of American States, and the Latin American Integration Association. Its foreign policy has been strongly pro-Western and anticommunist. Located between two larger powers, Argentina and Brazil, Paraguay strives to maintain a balanced and positive relationship with each.

US-PARAGUAY RELATIONS

The US Government, through the Agency for International Development (AID) and its predecessor agencies, has assisted Paraguayan development since 1946. Because of Paraguay's rapid economic development, the AID bilateral assistance program has been phased out. Modest funding for US training, however, has been retained. Peace Corps and US Information Service programs are active in Paraguay. Cooperation between Paraguay and the United States in international organizations traditionally has been good. Paraguay has made substantial progress in the three areas of most concern to the United States: democracy, human rights and narcotics. Consequently, US-Paraguay relations have improved considerably.
Principal US Officials
Ambassador-Timothy L. Towell Deputy Chief of Mission-Michael Ranneberger Economic/Commercial Officer-Jonathan Ferrar Political Officer-Rose M. Likins Consul-Clarence A. Hudson, Jr. Administrative Officer-Francine L. Bowman Development Liaison Officer (AID)-Peter R. Orr Public Affairs Officer-Alan A. Rogers Defense Attache-Lt. Col. Douglas McCary, USA The US Embassy in Paraguay is located at 1776 Avenida Mariscal Lopez, Asuncion. Tel.: (595)(21)213-715, (595)(21)213- 728.

TRAVEL NOTES

Clothing: Dress is similar to that worn in the US. Customs: US citizens do not require a visa for a 30-day stay, but they must possess a valid passport. No inoculations are required for entry. Health: Medical services in Asuncion generally are good, but no adequate health facilities are available in the interior. Telecommunications: Long-distance telephone service is available almost worldwide. Telegraph service is not always reliable. Asuncion is 1 hour ahead of eastern standard time. Transportation: Regular air service connects Asuncion to the US. In the capital, metered taxis are available at stands. Published by the United States Department of State -- Bureau of Public Affairs -- Office of Public Communication -- Washington, DC -- May 1990 -- Editor: Peter A. Knecht Department of State Publication 8098 -- Background Notes Series -- This material is in the public domain and may be reprinted without permission; citation of this source is appreciated. For sale by the Superintendent of Documents, US Government Printing Office, Washington, DC 20402.(###)