About Paraguay

At a glance

Geography
Although landlocked, Paraguay is bordered and criss-crossed by navigable rivers.

The Río Paraguay divides the country into strikingly different eastern and western regions. These two main regions are the Paraneña region, a mixture of plateaus, rolling hills, and valleys, and the Chaco region, an immense piedmont plain.

Politics
Paraguay's Colorado Party was the world's longest-ruling party in power.

The Colorados governed for more than 60 years. In April 2008, the election of ordained bishop Fernando Lugo, head of a center-left coalition called the Patriotic Alliance for Change, put an end to long rule of the Colorado Party.

Economy
The economy of Paraguay is marked by the dominance of the farming, commercial and service sectors.

Industry, however, is less well developed, and mostly based on the processing of agricultural goods.

The commercial sector is supported by shopping tourism proceeding from Brazil and Argentina, as several imported products are cheaper than in these neighboring countries.

Facts

Full name: Republic of Paraguay
Population: 6.1 million
Capital: Asuncion
Area: 406,752 sq km (157,048 sq miles)
Major languages: Spanish, Guarani
Major religion: Christianity
Life expectancy: 70 years (men), 74 years (women)
Monetary unit: 1 guarani = 100 centimos
Main exports: Soyabeans, cotton, meat, edible oils, timber
GNI per capita: US $1,280
Internet domain: .py
International dialling code: +595

History

In the disastrous War of the Triple Alliance (1865-70) - between Paraguay and Argentina, Brazil, and Uruguay - Paraguay lost two-thirds of all adult males and much of its territory.

It stagnated economically for the next half century.

In the Chaco War of 1932-35, Paraguay won large, economically important areas from Bolivia.

The 35-year military dictatorship of Alfredo Stroessner ended in 1989, and, despite a marked increase in political infighting in recent years, Paraguay has held relatively free and regular presidential elections since then.

Political Structure

Politics of Paraguay takes place in a framework of a presidential representative democratic republic, whereby the President of Paraguay is both head of state and head of government, and of a multi-party system.

Executive power is exercised by the government. Legislative power is vested in both the government and the two chambers of the National Congress. The Judiciary is independent of the executive and the legislature.

Economy

Landlocked Paraguay has a market economy marked by a large informal sector.

This sector features both reexport of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. Because of the importance of the informal sector, accurate economic measures are difficult to obtain.

A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis.

On a per capita basis, real income has stagnated at 1980 levels. Most observers attribute Paraguay's poor economic performance to political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure. The economy rebounded between 2003 and 2007, posting modest growth each year. Growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion.

Foreign Trade

Paraguay's foreign trade is typical for an agricultural country, but the re-export trade on the black market is the country's largest foreign exchange earner.

Over a third of Paraguay's reported commodity export returns come from oil seeds (34%), while another 9.1% comes from cotton. Other exports include meat (8.3%), leather (6.0%), wood and plywood (5.5%), and vegetable oil (4.8%).