Paraguay's Map

People
Nationality: Noun and adjective--Paraguayan(s).
Population (2004 est.): 6,191,368.
Annual population growth rate: 2.3% (projected 1999-2015, UNDP).
Ethnic groups: Mixed Spanish and Indian descent (mestizo) 95%.
Religions: Roman Catholic 90%; Mennonite and other Protestant denominations.
Languages: Spanish(language of business and government), Guarani (spoken and understood by 90% of the population).
Education: Years compulsory--9. Attendance--92%. Literacy--94%. (UNICEF)
Health: Infant mortality rate--27/1,000. Life expectancy--72 years male; 77 years female.
Work force (2002, 2.5 million): Agriculture--45%; industry and commerce--31%; services--19%; government--4%.

Government
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, 1 capital city.
Political parties: National Republican Association/Colorado Party (ANR), Authentic Radical Liberal Party (PLRA), Beloved Fatherland (PQ), National Union of Ethical Citizens (UNACE), National Encounter Party (PEN), The Country in Solidarity Party (PPS), and numerous small parties not represented in Congress.
Suffrage: 18 years of age; universal and compulsory by law up to age 75.

Economy (2003 Central Bank data.)
GDP: $5.87 billion.
Annual growth rate: 2.6% (2003).
Per capita GDP: $1,019.
Natural resources: Hydroelectric sites, forests.
Agriculture (21.1% of GDP): Products--soybeans, cotton, beef, cereals, sugarcane.
Arable land: 9 million hectares, of which 30% is in production.
Manufacturing (13.5% of GDP): Types--sugar, cement, textiles, beverages, wood products.
Trade (2003): Exports--$1.24 billion: soybeans, cotton, meat and meat products, wood, animal hides, and vegetable oil. Major markets--Brazil (34.2%), Uruguay (19.6%). Imports--$1.86 billion: fuels and lubricants, machinery, electric materials, transportation and accessories, industrial chemicals, fertilizers, plastics and manufactures, paper and manufactures. Major suppliers--Brazil (32.5%), Argentina (21.6%).

PEOPLE
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. Brazilians, Argentines, Germans, Arabs, Koreans, Chinese, and Japanese are among those who have settled in Paraguay with Brazilians representing the largest number.

HISTORY
Pre-Columbian civilization in the fertile, wooded region that is now Paraguay consisted of numerous seminomadic, Guarani-speaking tribes, who were recognized for their fierce warrior traditions. They practiced a mythical polytheistic religion, which later blended with Christianity. 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; afterward, Brazilian troops 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. Gen. 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 the Colorado Party. During Stroessner's 35-year reign, political freedoms were severely limited, and opponents of the regime were systematically harassed and persecuted in the name of national security and anticommunism. 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 Gen. Andres Rodriguez. Rodriguez, as the Colorado Party candidate, easily won the presidency in elections held that May, 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. In May 1993, Colorado Party 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. The newly elected majority-opposition Congress quickly demonstrated its independence from the executive by rescinding legislation passed by the previous Colorado-dominated Congress. 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 Gen. Lino Oviedo to oust President Wasmosy, taking an important step to strengthen democracy.

Oviedo became the Colorado candidate for president in the 1998 election, but when the Supreme Court upheld in April his conviction on charges related to the 1996 coup attempt, he was not allowed to run and remained in confinement. His running mate, Raul Cubas Grau, became the Colorado Party's candidate and was elected in May. The assassination of Vice-President Luis Maria Argana and the killing of eight student anti-government demonstrators, allegedly carried out by Oviedo supporters, led to Cubas’ resignation in March 1999. The President of the Senate, Luis Gonzalez Macchi, assumed the presidency and completed Cubas’ term. Gonzalez Macchi offered cabinet positions in his government to senior representatives of all three political parties in an attempt to create a coalition government that proved short-lived. Gonzalez Macchi’s government suffered many allegations of corruption, and Gonzalez himself was found not guilty in a Senate impeachment trial involving corruption and mismanagement charges in February 2003.

In April 2003, Colorado candidate Nicanor Duarte Frutos was elected president. He was inaugurated on August 15. Duarte’s administration has focused upon attacking corruption and improving the quality of management, in the wake of the Gonzalez administration, widely considered the most corrupt in the post-Stroessner era. Duarte has been successful at working constructively with an opposition-controlled Congress, and in his first year of office, six Supreme Court justices suspected of corruption were removed from office, and major tax reforms were enacted. Macroeconomic performance has improved significantly under the Duarte administration, with inflation falling significantly, and the government clearing its arrears with international creditors. Unemployment remains stubbornly high and the living standard of most households has not improved. The administration has placed a strong emphasis on participating in international institutions and has used diplomacy to promote the opening of international markets to Paraguayan products. In June 2004, Oviedo returned to Paraguay from exile in Brazil and was imprisoned for his 1996 coup-plotting conviction.

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 5-year term, appoints a cabinet. The bicameral Congress consists of an 80-member Chamber of Deputies and a 45-member Senate, elected concurrently with the president through a proportional representation system. Deputies are elected by department and senators are elected nationwide. Paraguay's highest judicial body is the Supreme Court. A popularly elected governor heads each of Paraguay’s 17 departments.

Principal Government Officials
President--Nicanor Duarte Frutos
Vice-President--Luis Castiglioni Soria
Minister of Foreign Affairs--Leila Rachid de Cowles
Ambassador to the U.S.--James Spalding Hellmers
Ambassador to the OAS--Enrique Chase Plate
Ambassador To The UN--Eladio Loizaga Caballero

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, and Los Angeles.

ECONOMY
Paraguay has a predominantly agricultural economy, with a struggling commercial sector. There is a large subsistence sector, including sizable urban unemployment and underemployment, and a large underground re-export sector. The country has vast hydroelectric resources, including the world's largest hydroelectric generation facility built and operated jointly with Brazil (Itaip? Dam), but it lacks significant mineral or petroleum resources. The government welcomes foreign investment in principle and accords national treatment to foreign investors, but widespread corruption is a deterrent. The economy is dependent on exports of soybeans, cotton, grains, cattle, timber, and sugar; electricity generation, and to a decreasing degree on re-exporting to Brazil and Argentina products made elsewhere. It is, therefore, vulnerable to the vagaries of weather and to the fortunes of the Argentine and Brazilian economies.

According to Paraguayan Central Bank (BCP) data, Paraguay's real GDP in 2003 of $8.5 billion in 1982 dollars represented an increase of 2.6% from 2002 ($8.3 billion), after steady decreases during the previous several years. The GDP per capita rose slightly, to $1,019 in current US dollar terms, but has fallen by nearly a third over the past ten years. Given the importance of the informal sector, accurate economic measures are difficult to obtain. Paraguay presently maintains a small balance-of-payments surplus. In 2003, official foreign exchange reserves rose to $983 million, and foreign official debt rose slightly to $2.28 billion. Inflation in 2003 dropped to 9.3%.

Agriculture and Commerce
Agricultural activities, most of which are for export, represent about 21.1% of GDP. 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. The recorded activities of this sector have declined significantly in recent years, placing a strain on government finances, which depend heavily on taxes on this trade. 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, may equal the formal economy in size. 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.

DEFENSE
The constitution designates the president as commander in chief of the armed forces. Military service is compulsory, and all 18-year-old males--and 17 year olds in the year of their 18th birthday--are eligible to serve for one year on active duty. However, the 1992 constitution allows for conscientious objection. Of the three services, the army has the majority of personnel, resources, and influence. With about 7,000 personnel, it is organized into three corps, with six infantry divisions and three cavalry divisions. The military has two primary functions: national defense (including internal order) and engaging in civic action programs as directed by the president. The navy consists of approximately 2,000 personnel and in addition to its fleet, has an aviation section, a prefecture (river police), and a contingent of marines (naval infantry). The air force, the newest and smallest of the services, has approximately 1,200 personnel.