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.(###)