U.S. Department of State
Background Notes: Paraguay, March 1998
Released by the Bureau of Inter-American Affairs.
Official Name: Republic of Paraguay
Nationality: Noun and adjective--Paraguayan(s).
Population: 4.8 million.
Annual growth rate: 2.7%.
Ethnic groups: Mixed Spanish and Indian descent (mestizo) 95%.
Religions: Roman Catholic 90%; Mennonite and other Protestant
Languages: Spanish, Guarani.
Education: Years compulsory--6. Attendance--86.6%. Literacy--90.7%.
Health: Infant mortality rate--38/1,000. Life expectancy--68 yrs. male;
75 yrs. female.
Work force (1995, 1.7 million): Agriculture--45%. Industry and commerce-
-31%. Services--19%. Government--4%.
Area: 406,752 sq. km. (157,047 sq. mi.); about the size of California.
Cities: Capital--Asuncion (pop. 502,000). Other cities--Caaguazu,
Coronel Oviedo, Pedro Juan Caballero, 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.
Type: Constitutional republic.
Independence: May 1811.
Constitution: June 1992.
Branches: Executive--president. Legislative--Senate and Chamber of
Deputies. Judicial--Supreme Court of Justice.
Administrative subdivisions: 17 departments.
Political parties: Colorado (National Republican Association), Authentic
Radical Liberal, National Encounter, Christian Democratic, Febrerista
Revolutionary, Popular Democratic, and numerous smaller parties not
represented in Congress.
Suffrage: 18 years of age; universal and compulsory up to age 75.
Economy (1997 est.)
GDP: $10 billion.
Annual growth rate: 2.0%.
Per capita GDP: $2,100.
Natural resources: Hydroelectric sites, forests.
Agriculture (26% of GDP): Products--cotton, sugarcane, soybeans. Arable
land--9 million hectares, of which 30% is cultivated.
Manufacturing (15% of GDP): Types--sugar, cement, textiles, beverage,
and wood products.
Trade (1996): Exports--$1 billion: meat and meat products, lumber,
vegetable oil, yerba mate, cotton, soybeans. Major markets--Brazil,
Argentina, EU, U.S. (6%). Imports--$2.2 billion: machinery, fuels and
lubricants, electronics, consumer goods. Major suppliers--Brazil, EU,
U.S. (18% *), Japan, Argentina.
Official exchange rate (March 1998): 2,500 guaranies=U.S.$1.
(* Source: Government of Paraguay)
Paraguay's population is distributed unevenly throughout the country.
The vast majority of the people live in the eastern region, 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 to less
than 2% of the population.
Ethnically, culturally, and socially, Paraguay has one of the most
homogeneous populations 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 official languages. Germans, Japanese, Koreans, ethnic
Chinese, Arabs, Brazilians, and Argentines are among those who have
settled in Paraguay.
Pre-Columbian civilization in the fertile, wooded region that is now
Paraguay consisted of numerous semi-nomadic, Guarani-speaking tribes of
Indians, who were recognized for their fierce warrior traditions. They
practiced a mythical polytheistic religion, which later blended with
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. Paraguay declared its independence by
overthrowing the local Spanish authorities in May 1811.
The country's formative years saw three strong leaders who established
the tradition of personal rule that lasted until 1989: Jose Gaspar
Rodriguez de Francia, Carlos Antonio Lopez, and his son, Francisco
Solano Lopez. The younger Lopez waged a war against Argentina, Uruguay,
and Brazil (War of the Triple Alliance, 1864-70) in which Paraguay lost
half its population; Brazilian troops subsequently occupied the country
until 1874. A succession of presidents governed Paraguay under the
banner of the Colorado Party from 1880 until 1904, when the liberal
party seized control, ruling with only a brief interruption until 1940.
In the 1930s and 1940s, Paraguayan politics were defined by the Chaco
War against Bolivia, a civil war, dictatorships, and periods of extreme
political instability. General Alfredo Stroessner took power in May
1954. Elected to complete the unexpired term of his predecessor, he was
re-elected president seven times, ruling almost continuously under the
state-of-siege provision of the constitution with support from the
military and Colorado Party.
During Stroessner's 34-year reign, political freedoms were severely
limited and opponents of the regime were systematically harassed and
persecuted in the name of national security and anti-communism. Though a
1967 constitution gave dubious legitimacy to Stroessner's control,
Paraguay became progressively isolated from the world community.
On February 3, 1989, Stroessner was overthrown in a military coup headed
by General Andres Rodriguez. Presidential and congressional elections
were held on May 1, 1989. Rodriguez, as the Colorado Party candidate,
easily won the presidency, and the Colorado Party dominated the
Congress. In 1991 municipal elections, however, opposition candidates
won several major urban centers, including Asuncion. As president,
Rodriguez instituted political, legal, and economic reforms and
initiated a rapprochement with the international community. The June
1992 constitution established a democratic system of government and
dramatically improved protection of fundamental rights.
On May 9, 1993, Colorado Party presidential candidate Juan Carlos
Wasmosy was elected as Paraguay's first civilian president in almost 40
years in what international observers deemed fair and free elections. A
majority-opposition Congress also was elected, which quickly
demonstrated its independence from the executive by rescinding
legislation passed by the previous Colorado-dominated Congress. Wasmosy
has worked to consolidate Paraguay's democratic transition, reform the
economy and the state, and improve respect for human rights. His major
accomplishments to date have been exerting civilian control over the
armed forces and undertaking fundamental reform of the judicial and
electoral systems. With support from the United States, the Organization
of American States, and other countries in the region, the Paraguayan
people rejected an April 1996 attempt by then-Army Chief General Lino
Oviedo to oust President Wasmosy, taking an important step to strengthen
GOVERNMENT AND POLITICAL CONDITIONS
Paraguay's highly centralized government was fundamentally changed by
the 1992 constitution, which provides for a division of powers. The
president, popularly elected for a five-year term, appoints a cabinet.
The next presidential elections are scheduled for May 10, 1998. The
bicameral Congress consists of a 45-member Senate and an 80-member
Chamber of Deputies, elected concurrently with the president through a
proportional representation system. Deputies are elected by department
and Senators nationwide. Paraguay's highest court is the Supreme Court.
The Senate and the president select its members on the basis of
recommendations from a constitutionally created Magistrates Council.
Each of Paraguay's 17 departments is headed by a popularly elected
Principal Government Officials
President--Juan Carlos WASMOSY Monti
Minister of Foreign Affairs--Ruben Dario MELGAREJO Lanzoni
Ambassador to the U.S.--Jorge PRIETO Conti
Ambassador to the OAS--Carlos Victor MONTANARO
Ambassador to the UN--Hugo SAGUIER
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.
Paraguay has a predominantly agricultural economy, with a thriving
commercial sector. There is a large subsistence sector (including
sizable urban underemployment) and a larger underground re-export
sector. The country has vast hydroelectric potential (including the
world's largest hydroelectric generation facility at the Itaipu Dam),
but lacks significant mineral or petroleum resources. The government
welcomes and provides national treatment to foreign investors and
The economy is dependent on exports of soybeans, cotton, cattle, and
timber; on electricity generation; and on the lucrative business of re-
exporting products made elsewhere. It is therefore vulnerable to the
vagaries of weather and to the fortunes of the Argentine and Brazilian
According to Paraguayan Government statistics, Paraguay's GDP of $10
billion in 1997 represented real growth of 2.0% over 1996. However,
given the importance of the informal sector, accurate economic measures
are difficult to ascertain.
Paraguay generally maintains a small balance-of-payments surplus.
Official foreign exchange reserves decreased to $900 million and foreign
official debt remained about $1.3 billion. On a per capita basis, GDP
declined by 1.0% at the end of 1997. Inflation continued to drop,
standing at 6.2%.
Agriculture and Commerce
Agricultural activities represents about 20% of GDP, most of which is
for export. More than 200,000 families depend on subsistence farming
activities and maintain marginal ties to the larger, productive sector
of the economy.
The commercial sector is primarily engaged in the import of goods from
Asia and the United States for re-export to neighboring countries. In
general, Paraguayans prefer imported goods, and local industry relies on
imported capital goods. The underground economy, which is not included
in the national accounts, is estimated to generate transactions
amounting to $3 billion to $7 billion per year. The bulk of underground
activity centers on the unregistered sale of imported goods--including
computers, sound equipment, cameras, liquor, and cigarettes--to
Argentina and Brazil.
Since 1989, the government has deregulated the economy, previously
tightly controlled by President Stroessner's authoritarian regime. The
Rodriguez and Wasmosy Administrations eliminated foreign exchange
controls and implemented a free-floating exchange rate system; reformed
the tax structure and established tax incentives to attract investment;
reduced tariff levels; launched a stock exchange market; and began a
process of financial reform.
The Wasmosy Government has pledged to strengthen market-based economic
reforms initiated since 1989. To do this, the government pledged to:
keep government expenditures in line with revenues; combat inflation;
eliminate restrictions on capital flows; reform and deregulate the
financial sector; keep customs duties low and uniform; encourage
production and exports; privatize state-owned enterprises; and fight
In order to rationalize resources, President Wasmosy has vowed to
privatize state enterprises which produce goods and services, but
privatization has stalled due to opposition from many parts of the
society long accustomed to a large public sector. The total public
sector budget represents close to one-third of GDP. Of the $3.75 billion
1997 government budget, 40% was assigned to the central government, with
the remaining 60% targeted for the decentralized agencies and state-
The constitution designates the president as commander in chief of the
armed forces. Military service is compulsory, and all 17-year-old males
are liable for one year of active duty. Although the 1992 constitution
allows for conscientious objection, no enabling legislation has yet been
approved. Of the three services, the army has the majority of personnel,
resources, and influence. With about 12,000 personnel, it is organized
into three corps, with six infantry divisions and three cavalry
divisions. The army has two primary functions: to maintain the national
defense (including internal order) and to manage some civic action
projects in the countryside. The navy consists of about 2,000 personnel
divided into three service branches. The air force, newest and smallest
of the services, has about 1,500 personnel.
Paraguay is a member of the United Nations and several of its
specialized agencies, the Organization of American States, the Latin
American Integration Association (ALADI), the Rio Group, INTELSAT,
INTERPOL, and most recently, MERCOSUR (Southern Cone Common Market). Its
foreign policy has followed closely the Rio Group's lead on many issues
of wide-ranging political importance.
U.S. Interests in Paraguay
The United States and Paraguay have an extensive relationship at the
government, business, and personal level. Paraguay is a partner in
hemispheric initiatives to improve counternarcotics cooperation, combat
money laundering and other illicit cross-border activities, and
adequately protect intellectual property rights. With substantial rain
forest and riverine resources, the U.S. looks to Paraguay to engage in
hemispheric efforts to ensure sustainable development. As a member of
the Southern Cone Common Market (MERCOSUR in Spanish), Paraguay supports
the move toward a Free Trade Area of the Americas early in the next
century. The U.S. and Paraguay also cooperate in a variety of
The U.S. strongly supports consolidation of Paraguay's democracy and
continued economic reform, cornerstones of cooperation among countries
in the hemisphere. The U.S. played an important role in helping resolve
the April 1996 crisis that threatened Paraguay's seven-year-old
U.S. exports to Paraguay approach $1 billion per year, according to U.S.
Customs data. More than a dozen U.S. multinational firms have
subsidiaries in Paraguay. These include firms in the computer,
manufacturing, agro-industrial, and banking and other service
industries. Some 75 U.S. businesses have agents or representatives in
Paraguay, and over 3,000 U.S. citizens reside there.
The U.S. Government has assisted Paraguayan development since 1937. The
U.S. Agency for International Development (USAID) currently supports a
variety of programs to strengthen Paraguay's democratic institutions,
particularly in the legislative and judicial branches, local government,
and elections, as well as to protect the environment and stabilize
population growth. USAID anticipates an assistance program of over $5
million per year for FY 1997-1999.
The U.S. Department of State and the Drug Enforcement Administration are
providing technical assistance, equipment, and training to strengthen
counternarcotics enforcement and to assist in the development and
implementation of money laundering legislation. The U.S. Department of
Defense is providing technical assistance and training to help
modernize, professionalize, and democratize the military. The Peace
Corps has about 170 volunteers working throughout Paraguay on projects
ranging from agriculture and natural resources to education, rural
health, and urban youth development. The U.S. Information Service (USIS)
is also active in Paraguay, providing information on the United States
to the press and public, as well as helping to arrange educational and
citizen exchanges to promote democracy.
Principal U.S. Officials
Ambassador--Maura A. Harty
Deputy Chief of Mission--Stephen McFarland
Political Officer--Alexander H. Margulies
Economic/Commercial Officer--Francisco J. Fernandez
Consul--Charles S. Smith
Administrative Officer--Amy Pitts
USAID Representative--Barbara Kennedy
Public Affairs Officer--James Dickmeyer
Defense Attache--Ltc. Charles A. Rowcliffe
Office of Defense Cooperation--Col. David Wilderman
The U.S. Embassy in Paraguay is located at 1776 Avenida Mariscal Lopez,
Asuncion (tel. (595) (21) 213-715, fax (595) (21) 213-728). The
embassy's Home Page address on the World Wide Web is:
OTHER CONTACT INFORMATION:
U.S. Department of Commerce
International Trade Administration
Office of Latin America and the Caribbean
14th & Constitution Ave., NW
Washington, DC 20230
Tel: (202) 482-0477, 800-USA-TRADE
Fax: (202) 482-0464
Paraguayan-American Chamber of Commerce
Edif. El Faro Internacional, Piso 4
Tel: (595) 21-442-136, Fax: (595) 21-442-135
(Branch office in Ciudad del Este)
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program provides
Travel Warnings and Consular Information Sheets. Travel Warnings are
issued when the State Department recommends that Americans avoid travel
to a certain country. Consular Information Sheets exist for all
countries and include information on immigration practices, currency
regulations, health conditions, areas of instability, crime and
security, political disturbances, and the addresses of the U.S. posts in
Public Announcements are issued as a means to disseminate information
quickly about terrorist threats and other relatively short-term
conditions overseas which pose significant risks to the security of
American travelers. Free copies of this information are available by
calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-
on-demand system: 202-647-3000. Travel Warnings and Consular Information
Sheets also are available on the Consular Affairs Internet home page:
and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the
modem number: (301-946-4400 (it will accommodate up to 33,600 bps), set
terminal communications program to N-8-1 (no parity, 8 bits, 1 stop
bit); and terminal emulation to VT100. The login is travel and the
password is info (Note: Lower case is required). The CABB also carries
international security information from the Overseas Security Advisory
Council and Department's Bureau of Diplomatic Security. Consular Affairs
Trips for Travelers publication series, which contain information on
obtaining passports and planning a safe trip abroad, can be purchased
from the Superintendent of Documents, U.S. Government Printing Office,
P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax
Emergency information concerning Americans traveling abroad may be
obtained from the Office of Overseas Citizens Services at (202) 647-
5225. For after-hours emergencies, Sundays and holidays, call 202-647-
Passport Services information can be obtained by calling the 24-hour, 7-
day a week automated system ($.35 per minute) or live operators 8 a.m.
to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-
225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate
of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).
Travelers can check the latest health information with the U.S. Centers
for Disease Control and Prevention in Atlanta, Georgia. A hotline at
(404) 332-4559 gives the most recent health advisories, immunization
recommendations or requirements, and advice on food and drinking water
safety for regions and countries. A booklet entitled Health Information
for International Travel (HHS publication number CDC-95-8280) is
available from the U.S. Government Printing Office, Washington, DC
20402, tel. (202) 512-1800.
Information on travel conditions, visa requirements, currency and
customs regulations, legal holidays, and other items of interest to
travelers also may be obtained before your departure from a country's
embassy and/or consulates in the U.S. (for this country, see "Principal
Government Officials" listing in this publication).
U.S. citizens who are long-term visitors or traveling in dangerous areas
are encouraged to register at the U.S. embassy upon arrival in a country
(see "Principal U.S. Embassy Officials" listing in this publication).
Registering with the embassy may help you to replace lost identity
documents or help family members contact you in case of an emergency.
Further Electronic Information:
Department of State Foreign Affairs Network. Available on the Internet,
DOSFAN provides timely, global access to official U.S. foreign policy
information. Updated daily, DOSFAN includes Background Notes; Dispatch,
the official magazine of U.S. foreign policy; daily press briefings;
Country Commercial Guides; directories of key officers of foreign
service posts; etc. DOSFAN's World Wide Web site is at
U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by
the U.S. Department of State, USFAC archives information on the
Department of State Foreign Affairs Network, and includes an array of
official foreign policy information from 1990 to the present. Contact
the Superintendent of Documents, U.S. Government Printing Office, P.O.
Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or
fax (202) 512-2250.
National Trade Data Bank (NTDB). Operated by the U.S. Department of
Commerce, the NTDB contains a wealth of trade-related information,
including Country Commercial Guides. It is available on the Internet
(www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-
1986 for more information.
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