Republic of Paraguay
Area: 406,752 sq. km. (157,047 sq. mi.); about
the size of California.
Cities: Capital--Asuncion (pop. 539,000).
Other cities--Ciudad del Este,
Concepción, Encarnación, Pedro Juan Caballero,
Terrain: East of the Paraguay River--grassy
plains, wooded hills, tropical forests; west of
the Paraguay River (Chaco region)--low, flat,
Climate: Temperate east of the Paraguay River,
semiarid to the west.
Nationality: Noun and adjective--Paraguayan(s).
Population (2004 est.): 6,191,368.
Annual population growth rate: 2.3% (projected
Ethnic groups: Mixed Spanish and Indian descent
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.
Health: Infant mortality rate--27/1,000.
Life expectancy--72 years male; 77 years
Work force (2002, 2.5 million): Agriculture--45%;
industry and commerce--31%; services--19%;
Type: Constitutional Republic.
Independence: May 1811.
Constitution: June 1992.
Legislative--Senate and Chamber of Deputies.
Judicial--Supreme Court of Justice.
Administrative subdivisions: 17 departments, 1
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 (2004 Central Bank data)
GDP: $7.98 billion.
Annual growth rate (2004): 3.9%.
Per capita GDP: $1,173.
Natural resources: Hydroelectric sites, forests.
Agriculture (24.1% of GDP): Products--soybeans,
cotton, beef, cereals, sugarcane.
Arable land: 9 million hectares, of which 30% is
Manufacturing (14.5% of GDP): Types--sugar,
cement, textiles, beverages, wood products.
Trade (2004): Exports--$1.62 billion:
soybeans, soybean flour, cotton, meat, wood,
animal hides, vegetable oil, tobacco, and sugar.
Major markets--Uruguay (27.75%), Brazil
(19.22%). Imports--$2.65 billion: fuels
and lubricants, machinery, electric materials,
transportation and accessories, industrial
chemicals, fertilizers, plastics and
manufactures, paper and manufactures. Major
suppliers--Brazil (30.97%), Argentina
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.
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
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
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
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
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
Ambassador to the U.S.--James Spalding Hellmers
Ambassador to the OAS--Manuel Maria Caceres
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
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 (Itaipú 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
According to Paraguayan Central Bank (BCP)
data, Paraguay's real GDP in 2004 of $7.98
billion (in 1994 dollars) represented an
increase of 3.9% from 2003. Data with the new
base year was released in 2005. IMF data using
the prior base year of 1982 shows real GDP
growth of 2.9% in 2004. The per capita GDP rose
to $1,173 in current U.S. dollar terms in 2004,
but has fallen by more than a third since the
peak of $1,793 in 1996. Given the importance of
the informal sector, accurate economic measures
are difficult to obtain. Paraguay presently
maintains a balance-of-payments surplus. It runs
a deficit in the trade of goods, but a large
surplus in services, reflecting large exports of
electricity from Paraguay’s two large
hydroelectric dams shared with Brazil and
Argentina. In 2004, official foreign exchange
reserves rose to $1.17 billion, an increase of
$184.2 million over 2003, and an increase of
almost 50% from 2002 ($582.8 million). Foreign
official debt rose slightly to $2.35 billion.
Inflation in 2004 dropped to 2.8%, down from
9.3% in 2003 and the lowest rate since 1970.
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.
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.
Paraguay is a member of the United Nations and
several of its specialized agencies. It also
belongs to the Organization of American States,
the Latin American Integration Association (ALADI),
the Rio Group, INTERPOL, and MERCOSUR (the
Southern Cone Common Market). Paraguay is
closely aligned with its MERCOSUR partners on
many political, economic, and social issues.
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, trafficking in persons, and other
illicit cross-border activities, and adequately
protect intellectual property rights. The United
States looks to Paraguay, which has substantial
rainforest and riverine resources, to engage in
hemispheric efforts to ensure sustainable
development. Paraguay was deemed eligible in
both 2004 and 2005 to participate in the
Millennium Challenge Corporation’s (MCC)
Threshold Country Program (TCP), which helps
countries improve their governance, levels of
investment in their citizens, and economic
freedom, so they can qualify for the MCC’s
principal program. Paraguay submitted a formal
TCP proposal in 2005. The United States and
Paraguay also cooperate in a variety of
Paraguay has taken significant steps to
combat terrorism-financing activity in the
tri-border area it shares with Argentina and
Brazil. It participates in antiterrorism
programs and fora, including the Three Plus One
Security Dialogue, with its neighbors and the
The United States strongly supports
consolidation of Paraguay's democracy and
continued economic reform, the cornerstones of
cooperation among countries in the hemisphere.
The United States has played important roles in
defending Paraguay's democratic institutions, in
helping resolve the April 1996 crisis, and in
ensuring that the March 1999 change of
government took place without further bloodshed.
Bilateral trade with the United States has
increased over the last three years, after a
steady decline over several years due to a
long-term recession of the Paraguayan economy.
Although U.S. imports from Paraguay were only
$58.6 million in 2004, up from $53.3 million the
previous year, U.S. exports to Paraguay in 2004
were $622.9 million, up from $483.6 million in
2003, according to U.S. Customs data. (Not all
exports and imports are reflected in Paraguayan
government data.) More than a dozen U.S.
multinational firms have subsidiaries in
Paraguay. These include firms in the computer,
agro-industrial, telecom, banking, and other
service industries. Some 75 U.S. businesses have
agents or representatives in Paraguay, and more
than 3,000 U.S. citizens reside in the country.
The U.S. Government has assisted Paraguayan
development since 1942. The
U.S. Agency for International Development
(USAID) currently supports a variety of
programs to strengthen Paraguay's democratic
institutions in the areas of civil society,
local government and decentralization, national
reform of the state, rule-of-law, and
anti-corruption. Other important areas of
intervention are economic growth, the
environment and public health. The total amount
of the program is approximately $8 million in
fiscal year 2005.
The U.S. Department of State, the Drug
Enforcement Administration, the Department of
Justice and the Department of Treasury provide
technical assistance, equipment, and training to
strengthen counter narcotics enforcement, combat
trafficking in persons, promote respect for
intellectual property rights, and to assist in
the development and implementation of money
laundering legislation and counter terrorism
- On December 19, 2003, U.S. and
Paraguayan officials signed a new Memorandum
of Understanding to strengthen the legal
protection and enforcement of intellectual
property rights in Paraguay.
- Since 2003 the U.S. Government has a
Resident Enforcement Advisor and Resident
Justice Advisor in Paraguay working on money
laundering and terrorist financing and other
financial crimes, the fight against
organized crime and corruption, and the
administrative reorganization of the
financial institutions related to money and
- In 2005, the State Department’s Bureau
of International Narcotics and Law
Enforcement Affairs (INL) provided Paraguay
with $600,000 in assistance to support its
efforts to combat narcotics trafficking,
money laundering, and violations of
intellectual property rights.
- Starting in 2004, a Resident Public Debt
Advisor, a Resident Budget Advisor, and a
Resident Tax Advisor from the Department of
Treasury have been working with Paraguayan
counterparts to implement essential reforms.
The U.S. Department of Defense provides
technical assistance and training to help
modernize, professionalize, and democratize the
Peace Corps has about 160 volunteers working
throughout Paraguay on projects ranging from
agriculture and natural resources to education,
rural health, and urban youth development.
The Office of Public Diplomacy also is 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
Deputy Chief of Mission--Kevin M. Johnson
Political Officer--James P. Merz
Economic/Commercial Officer--Patrick R. O'Reilly
Management Officer--Graham Webster
USAID Director--Wayne Nilsestuen
Public Affairs Officer--Bruce Kleiner
Defense Attache--LTC Dennis Fiemeyer
Office of Defense Cooperation--COL Arie Bogaard
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