Background Notes: Republic of Paraguay

Contributed By RealAdventures

Nationality: Noun and adjective--Paraguayan(s).
Population: 4.8 million.
Annual population growth rate: 2.7%.
Ethnic groups: Mixed Spanish and Indian descent (mestizo) 95%.
Religions: Roman Catholic 90%; Mennonite and other Protestant denominations.
Languages: Spanish, Guarani.
Education: Years compulsory--6. Attendance--86.6%. Literacy--90.7%.
Health: Infant mortality rate--38/1,000. Life expectancy--68 years male; 75 years female.
Work force (1995, 1.7 million): Agriculture--45%. Industry and commerce--31%. Services--19%. Government--4%.

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 miles) 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 Guaran’ Indian descent. Little trace is left of the original Guaran’ 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 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; afterwards, 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. 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 the 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. 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. Wasmosy worked to consolidate Paraguay's democratic transition, reform the economy and the state, and improve respect for human rights. His major accomplishments were 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 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 former running mate, Raul Cubas Grau, became the Colorado Party's candidate and was elected in May in elections deemed by international observers to be free and fair. Cubas included among his priorities reducing the growing budget deficit and fighting corruption and narcotics trafficking. However, his brief presidency was dominated by conflict over the status of Oviedo, who had significant influence over the Cubas government. One of Cubas' first acts after taking office in August was to commute Oviedo's sentence and release him from confinement. In December 1998, Paraguay's Supreme Court declared these actions unconstitutional. After delaying for two months, Cubas openly defied the Supreme Court in February 1999, refusing to return Oviedo to jail. In this tense atmosphere, the murder of Vice President and longtime Oviedo rival Luis Mar’a Argana on March 23, 1999, led the Chamber of Deputies to impeach Cubas the next day. The March 26 murder of eight student anti-government demonstrators, widely believed to have been carried out by Oviedo supporters, made it clear that the Senate would vote to remove Cubas on March 29, and Cubas resigned on March 28. Despite fears that the military would not allow the change of government, Senate President Luis Gonzalez Macchi, a Cubas opponent, was peacefully sworn in as president the same day. Oviedo fled the same day to Argentina, where he was granted political asylum. Cubas left for Brazil the next day and has since received asylum.

Gonzalez Macchi presides over Paraguay's first coalition government in several decades, as his government includes members of the Liberal and Encuentro Nacional parties as well as the anti-Oviedo factions of the Colorado party. Gonzalez has made addressing Paraguay's economic stagnation a priority, and the legislative support his government enjoys suggests that he may receive greater cooperation from the Congress than Cubas did. The government and its legislative allies have announced an ambitious economic and institutional reform program that has yet to be implemented.

President--Lu’s GONZALEZ Macchi
Minister of Foreign Affairs--Miguel Abdon SAGUIER
Ambassador to the U.S.--Vacant; ChargŽ d'Affaires a.i. is Elianne CIBILS
Ambassador to the OAS--Diego ABENTE
Ambassador to the U.N.--vacant, ChargŽ d'Affaires a.i. is Genaro PAPPALARDO

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 Kansas City, Kansas.

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 next presidential elections are scheduled for 2003. An election to replace the late Vice President Argana is scheduled for February of 2000. 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 nationwide. Paraguay's highest court is the Supreme Court. The Senate and the president select its nine members on the basis of recommendations from a constitutionally created Magistrates Council. Each of Paraguay's 17 departments is headed by a popularly elected governor.

GDP: $10 billion.
Annual growth rate: -0.5%.
Per capita GDP: $1,600.
Natural resources: Hydroelectric sites, forests.
Agriculture (27% 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, wood products.
Trade (1998): Exports--$3.4 billion*: meat and meat products, lumber, vegetable oil, yerba mate, cotton, soybeans. Major markets--Brazil, Argentina, EU. Imports--$3.7 billion*: machinery, fuels and lubricants, electronics, consumer goods. Major suppliers--Brazil, EU, U.S. (20%*), Japan, Argentina.
Official exchange rate (July 22, 1999): 3,320 guaranies=U.S.$1.
(*Source Government of Paraguay)

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, INTELSAT, INTERPOL, and MERCOSUR (the 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. The U.S. looks to Paraguay, which has substantial rain forest and riverine resources, to engage in hemispheric efforts to ensure sustainable development. As a member of MERCOSUR, 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 international organizations.

The U.S. strongly supports consolidation of Paraguay's democracy and continued economic reform, the cornerstones of cooperation among countries in the hemisphere. The U.S. 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.

Although U.S. imports from Paraguay are only about $40 million per year, U.S. exports to Paraguay approach $1 billion per year, according to U.S. Customs data. (Not all of the U.S. exports are reflected in Paraguayan government 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. In November 1998, U.S. and Paraguayan officials signed a memorandum of understanding on steps to improve protection of intellectual property rights in Paraguay.

U.S. Assistance

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 has provided more than $5 million in assistance in fiscal years 1997 and 1998 and anticipates providing a similar level in fiscal year 1999.

The U.S. Department of State and the Drug Enforcement Administration provide 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 provides technical assistance and training to help modernize, professionalize, and democratize the military. The Peace Corps has about 180 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.

Deputy Chief of Mission--Stephen McFarland
Political Officer--David Lindwall
Economic/Commercial Officer--Richard C. Boly
Consul--Julie Grant
Administrative Officer--Frank Ledahawsky
USAID Representative--Wayne Tate
Public Affairs Officer--James Dickmeyer
Defense Attache--Ltc. Charles A. Rowcliffe
Office of Defense Cooperation--Col. Martin Reyes

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:

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