Wayzata World Factbook 1995/World Factbook - 1995 Edition - Wayzata Technology (1995).iso/mac/text/Build/orig BACKGR/BNOT0085.TXT

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National Trade Data Bank
ITEM ID     : ST BNOTES PARAGUAY
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - PARAGUAY

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | PARAGUAY

US DEPARTMENT OF STATE
BACKGROUND NOTES:  PARAGUAY

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.:  [phone].

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.