Paraguay

—Paraguayan, adj., n.

/par"euh gwuy', -gway'/; Sp. /pah'rddah gwuy"/, n.

1. a republic in central South America between Bolivia, Brazil, and Argentina. 5,651,634; 157,047 sq. mi. (406,750 sq. km). Cap.: Asunción.

2. a river in central South America, flowing S from W Brazil through Paraguay to the Paraná. 1500 mi. (2400 km) long.

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Paraguay

Introduction Paraguay -
Background: In the disastrous War of the Triple Alliance (1865-70), 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, large, economically important areas were won from Bolivia. The 35- year military dictatorship of Alfredo STROESSNER was overthrown in 1989, and, despite a marked increase in political infighting in recent years, relatively free and regular presidential elections have been held since then. Geography Paraguay
Location: Central South America, northeast of Argentina
Geographic coordinates: 23 00 S, 58 00 W
Map references: South America
Area: total: 406,750 sq km water: 9,450 sq km land: 397,300 sq km
Area - comparative: slightly smaller than California
Land boundaries: total: 3,920 km border countries: Argentina 1,880 km, Bolivia 750 km, Brazil 1,290 km
Coastline: 0 km (landlocked)
Maritime claims: none (landlocked)
Climate: subtropical to temperate; substantial rainfall in the eastern portions, becoming semiarid in the far west
Terrain: grassy plains and wooded hills east of Rio Paraguay; Gran Chaco region west of Rio Paraguay mostly low, marshy plain near the river, and dry forest and thorny scrub elsewhere
Elevation extremes: lowest point: junction of Rio Paraguay and Rio Parana 46 m highest point: Cerro Pero (Cerro Tres Kandu) 842 m
Natural resources: hydropower, timber, iron ore, manganese, limestone
Land use: arable land: 5.54% permanent crops: 0.21% other: 94.25% (1998 est.)
Irrigated land: 670 sq km (1998 est.)
Natural hazards: local flooding in southeast (early September to June); poorly drained plains may become boggy (early October to June) Environment - current issues: deforestation; water pollution; inadequate means for waste disposal present health risks for many urban residents; loss of wetlands Environment - international party to: Biodiversity, Climate
agreements: Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Wetlands signed, but not ratified: Nuclear Test Ban
Geography - note: landlocked; lies between Argentina, Bolivia, and Brazil; population concentrated in southern part of country People Paraguay -
Population: 5,884,491 (July 2002 est.)
Age structure: 0-14 years: 38.7% (male 1,156,366; female 1,119,558) 15-64 years: 56.6% (male 1,671,721; female 1,658,683) 65 years and over: 4.7% (male 128,137; female 150,026) (2002 est.)
Population growth rate: 2.57% (2002 est.)
Birth rate: 30.5 births/1,000 population (2002 est.)
Death rate: 4.69 deaths/1,000 population (2002 est.)
Net migration rate: -0.09 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.05 male(s)/female under 15 years: 1.03 male(s)/female 15-64 years: 1.01 male(s)/female 65 years and over: 0.85 male(s)/ female total population: 1.01 male(s)/ female (2002 est.)
Infant mortality rate: 28.75 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 74.16 years female: 76.77 years (2002 est.) male: 71.67 years
Total fertility rate: 4.07 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: 0.11% (1999 est.) HIV/AIDS - people living with HIV/ 3,000 (1999 est.)
AIDS:
HIV/AIDS - deaths: 220 (1999 est.)
Nationality: noun: Paraguayan(s) adjective: Paraguayan
Ethnic groups: mestizo (mixed Spanish and Amerindian) 95%
Religions: Roman Catholic 90%, Mennonite, and other Protestant
Languages: Spanish (official), Guarani (official)
Literacy: definition: age 15 and over can read and write total population: 92.1% male: 93.5% female: 90.6% (1995 est.) Government Paraguay -
Country name: conventional long form: Republic of Paraguay conventional short form: Paraguay local short form: Paraguay local long form: Republica del Paraguay
Government type: constitutional republic
Capital: Asuncion Administrative divisions: 17 departments (departamentos, singular - departamento) and 1 capital city*; Alto Paraguay, Alto Parana, Amambay, Asuncion*, Boqueron, Caaguazu, Caazapa, Canindeyu, Central, Concepcion, Cordillera, Guaira, Itapua, Misiones, Neembucu, Paraguari, Presidente Hayes, San Pedro
Independence: 14 May 1811 (from Spain)
National holiday: Independence Day, 14 May (1811)
Constitution: promulgated 20 June 1992
Legal system: based on Argentine codes, Roman law, and French codes; judicial review of legislative acts in Supreme Court of Justice
Suffrage: 18 years of age; universal and compulsory up to age 75
Executive branch: chief of state: President Luis Angel GONZALEZ MACCHI (since 28 March 1999); Vice President Julio Cesar FRANCO (since NA August 2000); note - the president is both the chief of state and head of government head of government: President Luis Angel GONZALEZ MACCHI (since 28 March 1999); Vice President Julio Cesar FRANCO (since NA August 2000); note - the president is both the chief of state and head of government cabinet: Council of Ministers nominated by the president elections: president and vice president elected on the same ticket by popular vote for five-year terms; election last held 10 May 1998 (next to be held NA May 2003) note: President Luis Angel GONZALEZ MACCHI, formerly president of the Chamber of Senators, constitutionally succeeded President Raul CUBAS Grau, who resigned after being impeached soon after the assassination of Vice President Luis Maria ARGANA; the successor to ARGANA was decided in an election held in August 2000 election results: Raul CUBAS Grau elected president; percent of vote - 55.3%; resigned 28 March 1999
Legislative branch: bicameral Congress or Congreso consists of the Chamber of Senators or Camara de Senadores (45 seats; members are elected by popular vote to serve five-year terms) and the Chamber of Deputies or Camara de Diputados (80 seats; members are elected by popular vote to serve five-year terms) election results: Chamber of Senators - percent of vote by party - NA%; seats by party - Colorado Party 25, PLRA 13, PEN 7; Chamber of Deputies - percent of vote by party - NA%; seats by party - Colorado Party 45, PLRA 26, PEN 9 elections: Chamber of Senators - last held 10 May 1998 (next to be held NA May 2003); Chamber of Deputies - last held 10 May 1998 (next to be held NA May 2003)
Judicial branch: Supreme Court of Justice or Corte Suprema de Justicia (judges appointed on the proposal of the Counsel of Magistrates or Consejo de la Magistratura) Political parties and leaders: Authentic Radical Liberal Party or PLRA [Miguel Abdon SAGUIER]; Christian Democratic Party or PDC [Luis Miguel ANDRADA Nogues]; Febrerista Revolutionary Party or PRF [Oscar ACUNA TORRES]; National Encounter Party or PEN [Mario PAZ CASTAING]; National Republican Association - Colorado Party [Nicanor DUARTE FRUTOS] Political pressure groups and Ahorristas Estafados or AE; National
leaders: Workers Central or CNT; Paraguayan Workers Confederation or CPT; Roman Catholic Church; Unitary Workers Central or CUT International organization CCC, ECLAC, FAO, G-77, IADB, IAEA,
participation: IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, ISO (correspondent), ITU, LAES, LAIA, Mercosur, MONUC, NAM (observer), OAS, OPANAL, OPCW, PCA, RG, UN, UNAMSIL, UNCTAD, UNESCO, UNIDO, UNMEE, UPU, WCL, WHO, WIPO, WMO, WToO, WTrO Diplomatic representation in the US: chief of mission: Ambassador Leila Teresa RACHID COWLES chancery: 2400 Massachusetts Avenue NW, Washington, DC 20008 consulate(s) general: Kansas City, Los Angeles, Miami, New Orleans, New York FAX: [1] [phone] telephone: [1] [phone] through 6962 Diplomatic representation from the chief of mission: Ambassador David
US: N. GREENLEE embassy: 1776 Avenida Mariscal Lopez, Casilla Postal 402, Asuncion mailing address: Unit 4711, APO AA 34036-0001 telephone: [595] (21) 213-715 FAX: [595] (21) 213-728
Flag description: three equal, horizontal bands of red (top), white, and blue with an emblem centered in the white band; unusual flag in that the emblem is different on each side; the obverse (hoist side at the left) bears the national coat of arms (a yellow five-pointed star within a green wreath capped by the words REPUBLICA DEL PARAGUAY, all within two circles); the reverse (hoist side at the right) bears the seal of the treasury (a yellow lion below a red Cap of Liberty and the words Paz y Justicia (Peace and Justice) capped by the words REPUBLICA DEL PARAGUAY, all within two circles) Economy Paraguay
Economy - overview: Paraguay has a market economy marked by a large informal sector. The informal 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 derives their living from agricultural activity, often on a subsistence basis. The formal economy grew by an average of about 3% annually in 1995-97, but GDP declined slightly in 1998, 1999, and 2000. On a per capita basis, real income has stagnated at 1980 levels. Most observers attribute Paraguay's poor economic performance to political uncertainty, corruption, lack of progress on structural reform, substantial internal and external debt, and deficient infrastructure.
GDP: purchasing power parity - $26.2 billion (2001 est.)
GDP - real growth rate: 0% (2001 est.)
GDP - per capita: purchasing power parity - $4,600 (2001 est.) GDP - composition by sector: agriculture: 29% industry: 26% services: 45% (2000 est.) Population below poverty line: 36% (2001 est.) Household income or consumption by lowest 10%: 0.5%
percentage share: highest 10%: 43.8% (1998) Distribution of family income - Gini 57.7 (1998)
index: Inflation rate (consumer prices): 7.2% (2001 est.)
Labor force: 2 million (2000 est.) Labor force - by occupation: agriculture 45%
Unemployment rate: 17.8% (2001 est.)
Budget: revenues: $1.3 billion expenditures: $2 billion, including capital expenditures of $700 million (1999 est.)
Industries: sugar, cement, textiles, beverages, wood products Industrial production growth rate: 0% (2000 est.) Electricity - production: 53.056 billion kWh (2000) Electricity - production by source: fossil fuel: 0.04% hydro: 99.85% other: 0.11% (2000) nuclear: 0% Electricity - consumption: 1.95 billion kWh (2000)
Electricity - exports: 47.392 billion kWh (2000)
Electricity - imports: 0 kWh (2000)
Agriculture - products: cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (tapioca), fruits, vegetables; beef, pork, eggs, milk; timber
Exports: $2.2 billion (f.o.b., 2001 est.)
Exports - commodities: electricity, soybeans, feed, cotton, meat, edible oils
Exports - partners: Brazil 39%, Uruguay 14%, Argentina 11% (2000)
Imports: $2.7 billion (f.o.b., 2001 est.)
Imports - commodities: road vehicles, consumer goods, tobacco, petroleum products, electrical machinery
Imports - partners: Argentina 25.4%, Brazil 24.5%, Uruguay 3.8% (2000)
Debt - external: $2.9 billion (2001 est.) Economic aid - recipient: $NA
Currency: guarani (PYG)
Currency code: PYG
Exchange rates: guarani per US dollar - 4,783.0 (January 2002), 4,107.7 (2001), 3,486.4 (2000), 3,119.1 (1999), 2,726.5 (1998), 2,177.9 (1997); note - since early 1998, the exchange rate has operated as a managed float; prior to that, the exchange rate was determined freely in the market
Fiscal year: calendar year Communications Paraguay - Telephones - main lines in use: 290,475 (2001) Telephones - mobile cellular: 510,000 (2001)
Telephone system: general assessment: meager telephone service; principal switching center is Asuncion domestic: fair microwave radio relay network international: satellite earth station - 1 Intelsat (Atlantic Ocean) Radio broadcast stations: AM 46, FM 27, shortwave 6 (three inactive) (1998)
Radios: 925,000 (1997) Television broadcast stations: 4 (2001)
Televisions: 990,000 (2001)
Internet country code: .py Internet Service Providers (ISPs): 4 (2000)
Internet users: 20,000 (2000) Transportation Paraguay -
Railways: total: 971 km standard gauge: 441 km 1.435-m gauge note: there are 470 km of various gauges that are privately owned narrow gauge: 60 km 1.000-m gauge
Highways: total: 25,901 km paved: 3,067 km unpaved: 22,834 km (2001)
Waterways: 3,100 km
Ports and harbors: Asuncion, Villeta, San Antonio, Encarnacion
Merchant marine: total: 21 ships (1,000 GRT or over) totaling 34,623 GRT/36,821 DWT ships by type: cargo 14, chemical tanker 1, petroleum tanker 3, roll on/roll off 3 note: includes some foreign-owned ships registered here as a flag of convenience: Argentina 2, Japan 1 (2002 est.)
Airports: 899 (2001) Airports - with paved runways: total: 11 over 3,047 m: 3 1,524 to 2,437 m: 4 914 to 1,523 m: 4 (2001) Airports - with unpaved runways: total: 888 1,524 to 2,437 m: 28 914 to 1,523 m: 332 under 914 m: 528 (2001) Military Paraguay -
Military branches: Army, Navy (includes Naval Air and Marines), Air Force Military manpower - military age: 17 years of age (2002 est.) Military manpower - availability: males age 15-49: 1,427,160 (2002 est.) Military manpower - fit for military males age 15-49: 1,028,935 (2002
service: est.) Military manpower - reaching military males: 58,359 (2002 est.)
age annually: Military expenditures - dollar $125 million (FY98)
figure: Military expenditures - percent of 1.4% (FY98)
GDP: Transnational Issues Paraguay - Disputes - international: none
Illicit drugs: major illicit producer of cannabis, most or all of which is consumed in South America; transshipment country for Andean cocaine headed for Brazil, other Southern Cone markets, Europe, and US

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officially Republic of Paraguay

Country, south-central South America.

Area: 157,048 sq mi (406,752 sq km). Population (2002 est.): 5,744,000. Capital: Asunción. Most of the people are mestizos (mixed Spanish and Guaraní Indian); there are much smaller groups of Indians and other groups of African, European, and Asian ancestry. Languages: Spanish and Guaraní (both official). Religion: Roman Catholicism (great majority). Currency: guaraní. Paraguay is a landlocked country of plains and swampland. The Paraguay River, flowing from north to south, divides the country into two geographic regions: the eastern region, which is an extension of the Brazilian Plateau; and the western region, which forms the northern part of the Gran Chaco plains. Paraguay has a developing market economy that is based largely on agriculture, trade, and light industries. It is a republic with two legislative houses; its head of state and government is the president. Seminomadic tribes speaking Guaraní were in the area long before it was settled by Spain in the 16th–17th century. Paraguay was part of the Viceroyalty of Río de la Plata until it became independent in 1811. It suffered from dictatorial governments in the 19th century and was devasted by the War of the Triple Alliance (1864, 1865–70), which it fought against Brazil, Argentina, and Uruguay. The Chaco War (1932–35), with Bolivia over territorial rights in Gran Chaco, was settled primarily in Paraguay's favour by the peace treaty of 1938. Military governments, including that of Alfredo Stroessner, predominated from the mid-20th century until a civilian president, Juan Carlos Wasmosy, was elected in 1993. The country suffered from a financial crisis beginning in the late 1990s.

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▪ 2009

Area:

406,752 sq km (157,048 sq mi)

Population

(2008 est.): 6,238,000

Capital:

Asunción

Head of state and government:

Presidents Nicanor Duarte Frutos and, from August 15, Fernando Lugo

      Former Roman Catholic bishop Fernando Lugo (Lugo, Fernando ) won a stunning victory in Paraguay's presidential election on April 20, 2008, putting an end to the Colorado Party's 61-year hold on power. Lugo defeated Blanca Ovelar, the first woman presidential candidate in Paraguayan history, by a popular vote margin of 41% to 31%. The outgoing president, Nicanor Duarte Frutos, tried to resign in late June to take a seat in the Senate, a maneuver that would guarantee him legal immunity from any subsequent investigations; after some turmoil, however, the Senate ruled that the move was unconstitutional. Lugo, who promised to redistribute land and attack entrenched patronage and corruption, was inaugurated on August 15 for a five-year term.

      Lugo faced massive challenges in a country in which Colorado Party functionaries still occupied nearly all posts in the judicial and administrative systems—and in which 1% of the population controlled more than three-fourths of the arable land, while 42% of the population lived in poverty. Between Lugo's election and his inauguration, peasant groups staged dozens of land invasions, particularly of soybean farms. The groups targeted soybean producers because of concerns over their use of toxic pesticides. By promising land relief, Lugo persuaded most peasant leaders to halt the invasions. Lugo's administration said it would redistribute some 8 million ha (20 million ac) allegedly seized by former dictator Alfredo Stroessner and handed out (1954–89) to his cronies.

      In February Paraguay experienced its first outbreak of yellow fever in 34 years. The outbreak claimed at least nine lives and led to riots and massive movement across the country by people seeking vaccinations, which were not available. With the help of neighbouring countries, France, and the United Nations, Paraguay eventually imported more than three million doses of vaccine. The failure of Duarte's administration to be prepared for the outbreak became a major electoral issue.

      In September an appeals court overturned the manslaughter convictions of Juan Pío Paiva and his son, Daniel Paiva, the owners of the Ycuá Bolaños shopping mall in Asunción where an August 2004 fire claimed at least 374 lives. Doors ordered locked to prevent looting had prevented many victims from escaping the shopping mall. A lower court had convicted the owners in February. In August an appeals court also cleared former general and presidential candidate Lino Oviedo of charges that he had planned the 1999 assassination of the country's vice president, Luis María Argaña.

Robert Ortega

▪ 2008

Area:

406,752 sq km (157,048 sq mi)

Population

(2007 est.): 6,127,000

Capital:

Asunción

Head of state and government:

President Nicanor Duarte Frutos

      Political maneuvering in advance of the April 2008 presidential elections dominated Paraguay's attention during 2007, even as the country was hit by a series of corruption scandals, violent incidents, and health and environmental crises. In December 2006 Fernando Lugo, the popular Roman Catholic bishop of San Pedro, resigned to run for the presidency. Paraguay's constitution prohibited members of the clergy from holding office. Lugo, a fierce critic of the government, was seen as posing a serious challenge to the corruption-riddled Colorado Party, which had retained power in Paraguay since 1947.

      Pres. Nicanor Duarte Frutos, after unsuccessfully seeking a constitutional amendment permitting him to run for a second term, began grooming his education minister, Blanca Ovelar, as his successor. She and other Colorado candidates trailed far behind Lugo in public-opinion polls, however. Although Duarte took office on an anticorruption platform, allegations of bribery, embezzlement, and other corrupt practices by various high-level government figures dogged his administration—including a case involving Education Ministry officials (serving under Ovelar), who were accused of having embezzled nearly $6 million in 2002–06 from a school meals program.

      In July 2007 the six leading opposition parties announced that they had forged an alliance (the Concertación) behind Lugo to wrest power from the Colorados. The presidential race fractured in September, however, when Paraguay's Supreme Court freed from prison former general Lino Oviedo after he had served less than 4 years of his 10-year sentence for an attempted coup in 1996. Oviedo, whose supporters also had mounted a fizzled coup attempt in 2000, immediately launched legal actions to overturn barriers that kept him, as a convicted felon, from running for the presidency. The former commander of the army retained a strong power base in the countryside, especially in eastern Paraguay. The second and third largest opposition parties, both allied with Oviedo, withdrew from the Concertación after he was freed.

      In April, in one of a rash of kidnappings, an armed group took hostage a Japanese businessman, his secretary, and two Paraguayans who came upon the kidnapping in progress. The secretary was released nine days later; Hirokazu Ota (the business manager of South Korean Rev. Sun Myung Moon's church in Paraguay) and two other hostages were freed on April 20 after payment of a reported ransom of $140,000. Police shot dead six of the alleged kidnappers in a raid in rural eastern Paraguay in early May.

      Also in May, an appeals court overturned the 2006 conviction of former president Luis González Macchi for concealing a $1 million Swiss bank account. He was freed after having served five months of his eight-year sentence.

Robert Ortega

▪ 2007

Area:

406,752 sq km (157,048 sq mi)

Population

(2006 est.): 5,993,000

Capital:

Asunción

Head of state and government:

President Nicanor Duarte Frutos

      On Aug. 16, 2006, former Paraguayan dictator Alfredo Stroessner (Stroessner Matiauda, Alfredo ) died in exile in Brazil at the age of 93. Stroessner had seized power in a 1954 military coup and ruled with an iron hand until his ouster in 1989. (See Obituaries.) In Asunción angry opposition leaders marched out of the legislature when members of the Colorado Party called for a minute of silence in memory of Stroessner, their former leader. Amid raucous public debate, Pres. Nicanor Duarte declined to grant Stroessner a state funeral. The government said it would seek to confiscate Stroessner's personal fortune, believed to be at least $500 million. Less noted was the death in January of Napoleon Ortigoza, 73, who in 1962 had been falsely accused of murder and of plotting a coup against Stroessner. Ortigoza, a former army captain, was tortured and kept in solitary confinement for 18 of his 25 years as a political prisoner during the Stroessner regime. One of the world's longest-held political prisoners, Ortigoza became a human rights cause célèbre in the 1980s.

      In August President Duarte called for a constitutional amendment to allow him to run for a second term in 2008. The opposition-controlled Congress promptly blocked his three major economic initiatives, including a new income tax, and demanded he drop the plan. After Duarte's party dominated municipal elections in November, he reopened discussions with the opposition over an amendment.

      On September 18 an appeals court overturned the conviction of former president Luis González Macchi, voiding his six-year sentence and declaring that there was insufficient evidence to link him to the 2000 embezzlement of $16 million from two failed private banks. On December 4, however, he was convicted of concealing a $1 million Swiss bank account and was sentenced to eight years in prison. Appointed president in 1999, González Macchi served until 2003. On December 1, 15 people were convicted and sentenced to up to 25 years in prison for the 2004 kidnapping and murder of Cecilia Cubas, the daughter of former president Raúl Cubas Grau. All the defendants were members of an extremist group, Free Fatherland, with ties to Colombia's insurgent group FARC (Revolutionary Armed Forces of Colombia).

      Conflicts continued between large government-backed landowners and groups of landless peasants seeking land reform. The groups accused U.S. troops—in Paraguay for joint training—of taking part in counterinsurgency actions against them. The U.S. denied the allegations. In October Paraguay declined to grant diplomatic immunity to U.S. troops and said that it would not renew a military cooperation pact. The U.S. announced that its troops would leave by year's end but offered in December to renew military cooperation on Paraguay's terms.

Robert Ortega

▪ 2006

Area:

406,752 sq km (157,048 sq mi)

Population

(2005 est.): 5,905,000

Capital:

Asunción

Head of state and government:

President Nicanor Duarte Frutos

      In 2005 former Paraguayan army chief Gen. Lino Oviedo was back in the news. Imprisoned since June 2004 for having led a 1996 military rebellion, Oviedo was acquitted in January of charges that he had conspired in 1999 to destabilize then president Luis González Macchi's government. It was the second court victory for Oviedo since he began serving a 10-year prison sentence after having returned voluntarily from exile in Brazil. In October 2004 he had also been acquitted of having masterminded a military plot in 2000. Oviedo, who retained a popular following in Paraguay, still held out hopes of becoming president and had expressed a wish to participate in the upcoming 2008 elections. It was unclear, however, if he would be able to overcome his current sentence and other charges pending.

      Paraguay continued to reel from waves of lawlessness during the year. On February 16 the country's highest-profile kidnapping case ended tragically when the body of Cecilia Cubas, daughter of former president Raúl Cubas, was found buried behind an abandoned house in suburban Asunción. The 32-year-old Cubas had been abducted by gunmen five months earlier. Officials in Paraguay asserted that evidence linked an extremist group known as Free Fatherland to the crime and that the group had received training and advice regarding the kidnapping from Colombia's guerrilla insurgency FARC (the Revolutionary Armed Forces of Colombia). Pres. Nicanor Duarte soon afterward ordered the deployment of military troops to reinforce police in some rural departments. He also unveiled a security plan that would amend the constitution to institutionalize the military's role in “public security” tasks. The Roman Catholic Church, however, condemned what it described as “creeping authoritarianism” in the country and singled out Duarte's repression of social protests by landless peasant groups, considered by the government as vulnerable to left-wing subversion.

      In July a rumour spread that 500 U.S. Marines had landed in the northern Chaco desert as part of a plan to establish a secret military base that would eventually quarter 16,000 troops near Bolivia's gas deposits. In reality, the Paraguayan Senate had authorized the arrival of some 400 American soldiers in small groups over 18 months to run courses in counterinsurgency and antidrug operations. Several joint military exercises were planned as well. In August the Senate also approved the expropriation in the Chaco of 52,000 ha (about 128,000 ac) of land owned by a firm affiliated with controversial Sun Myung Moon's Unification Church. The move burnished the reformist image of President Duarte, who had argued for the expropriation to bolster government efforts toward land reform.

Paul C. Sondrol

▪ 2005

Area:

406,752 sq km (157,048 sq mi)

Population

(2004 est.): 5,773,000

Capital:

Asunción

Head of state and government:

President Nicanor Duarte Frutos

      Pres. Nicanor Duarte Frutos's reputation as a reformer intent on cleaning up cronyism, corruption, and contraband in Paraguay was seriously put to the test in 2004. In early February Duarte's plans to purge and modernize Paraguay's national police force were stymied as state prosecutors charged that top police officers who were investigating the robbery of $500,000 from the state-owned National Development Bank had plotted to steal part of the recovered booty. In March Duarte's campaign to reform the judiciary by retiring six of the nine Supreme Court justices ended in a disappointing throwback to the old backroom practice of political-party quotas and a division of high-court seats. The ruling Colorado Party took two seats, as did the main opposition party, the Authentic Radical Liberal Party, while a fifth seat went to Patria Querida. The latter seat was initially intended for the National Union of Ethical Citizens, the Colorado splinter group that followed cashiered and exiled Gen. Lino Oviedo.

      General Oviedo had been charged with having masterminded the 1999 assassination of Vice Pres. Luis María Argaña and had been convicted on charges surrounding an attempted coup in 1996. Oviedo returned in June from exile in Brazil to contest the charges and reenter politics and was greeted by a tumultuous welcome from party supporters. The government promptly clapped Oviedo in prison to serve out his 10-year sentence for the 1996 coup attempt.

      On August 1 a fire that raged through an Asunción supermarket crowded with weekend shoppers killed more than 300 people and injured hundreds, many of them children. Interior Ministry officials investigating the disaster said that many victims had been unable to escape the intense smoke and flames because the exits were locked, possibly to avoid robberies and prevent theft, a claim that the supermarket's owner denied. Investigators concluded that the fire started in a chimney in the food court. They focused on a possible short circuit and accidental fire, although the possibility of arson was not ruled out.

      The year ended with former president Juan Carlos Wasmosy's charging that the U.S. embassy in Asunción was eavesdropping on the presidential residence, which was located across the street.

Paul C. Sondrol

▪ 2004

Area:

406,752 sq km (157,048 sq mi)

Population

(2003 est.): 5,642,000

Capital:

Asunción

Head of state and government:

Presidents Luis Ángel González Macchi and, from August 15, Nicanor Duarte Frutos

      Paraguay's Senate began formal impeachment proceedings against Pres. Luis Ángel González in January 2003 as the ruling Colorado Party nominated its candidate for the April 27 presidential election. The president was accused of five counts of corruption, including the embezzlement of $16 million from the central bank. After six extraordinary sessions and much negotiation, González, who had survived impeachment proceedings in 2002, once again eluded indictment when in February the Senate fell 5 votes short of the 30 needed to dismiss him.

      Colorado Party leader Nicanor Duarte won the election with over 37% of the vote, followed by former vice president Julio Cesar Franco of the Authentic Radical Liberal Party (23%) and businessman Pedro Fadul, representing a new party, Patria Querida (22%). When Duarte took office on August 15, he faced many challenges, including a Congress controlled by the opposition; the Colorado Party had won 37 of the 80 seats in the Chamber of Deputies and 16 of the 45 Senate seats.

      Duarte inherited a country in the throes of financial and social meltdown. Several private and state banks were seized by the central bank owing to mismanagement and fraud, and the government faced growing pressures from protesting peasant farmers who demanded land and credit.

      Paraguay was unable to pay some of its debt-servicing obligations and salaries of state employees as a result of bankrupt accounts. Corruption and tax evasion were rampant and contributed to the lack of funds. The World Bank reported that 64% of Paraguayans lived below the poverty level, a 15% increase over 2002. Unemployment was expected to reach between 18% and 20% and inflation about 15%.

      President Duarte launched his campaign against corruption by attempting to reform the judiciary, specifically drafting a bill to retire up to six of the nine Supreme Court justices. Other efforts were under way to reform and streamline the state, but Duarte insisted that there would be no privatization or effort to implement other neoliberal reforms that “deny and subjugate human dignity.” Former president González's legal problems continued; in September he was indicted on fraud charges.

Frank O. Mora

▪ 2003

Area:

406,752 sq km (157,048 sq mi)

Population

(2002 est.): 5,774,000

Capital:

Asunción

Head of state and government:

President Luis Ángel González Macchi

      The year 2002 in Paraguay ended much where it had begun, mired in a cycle of economic recession, social protest, corruption, and political paralysis. Nearly bankrupt, the Paraguayan government began the year hoping to raise $400 million from the privatization of several state enterprises, specifically the state water and sanitation company and the Paraguayan Communications Corp. (COPACO), the public telecommunications firm. In March the government fell behind on debt repayments and found itself unable to pay public-sector wages. The International Monetary Fund (IMF) pressed the government of Pres. Luis Ángel González Macchi to accelerate the sale of COPACO; however, González's unpopularity and dispute with a divided Congress delayed much of the government's state reform program until June. During the first six months of the year, the government faced recurring protests from peasant and labour groups demanding an end to free-market policies, namely privatization. In June, after police clashed with hundreds of protesters, the president suspended the privatization of COPACO indefinitely.

      In March, Lino Oviedo, a former general living in asylum in Brazil who was suspected of having masterminded an attempted coup in 1996 and of having arranged the murder of Vice Pres. Luis María Argaña in 1999, announced that the National Union of Ethical Citizens (UNACE)—a faction he controlled within Paraguay's ruling Colorado Party—was breaking away. Subsequently, Oviedo formed a political alliance with a faction within the opposition Authentic Radical Liberal Party, headed by Vice Pres. Julio César Franco. The alliance, known as the National Patriotic Front, sought to impeach the president while supporting peasant and labour organizations in their effort to pressure the government to scrap an unpopular fiscal-adjustment package that the IMF had called for in return for a $200 million rescue loan.

      In July González decreed a state of emergency after nationwide protests against his economic policies led to riots and violent confrontations with police that resulted in the shooting of four people. In September and October the government resorted to violent suppression of demonstrations allegedly organized and financed by the Oviedo-Franco alliance. More than 250 protesters were taken into custody during a three-day demonstration in September. A general feeling of despair and frustration was exacerbated when Transparency International, a global organization that monitors corruption, rated Paraguay as the nation perceived to be the most corrupt in Latin America and the third worst in the world. Contributing to a climate of political uncertainty, Franco, in accordance with the constitution, resigned his post on October 16, six months before the deadline to qualify for the April 2003 presidential election.

      By the end of the year, Paraguay's economy had contracted by nearly 3%. Buffeted by neighbouring Argentina's worst-ever economic crisis and Brazil's slumping currency, Paraguay's currency depreciated by nearly 35%.

Frank O. Mora

▪ 2002

Area:

406,752 sq km (157,048 sq mi)

Population

(2001 est.): 5,636,000

Capital:

Asunción

Head of state and government:

President Luis Ángel González Macchi

      During 2001 Paraguay faced a series of political and socioeconomic challenges—largely dealing with corruption scandals and ineffective economic policies—that threatened to overwhelm the country's weak democracy and fragile economic system. A general feeling of uncertainty and despair contributed to rumours of presidential resignation, coups, and social violence. In March, after the collapse of the National Unity government, unconfirmed rumours spread that Pres. Luis Ángel González Macchi had resigned in the face of demands from several labour groups and opposition parties that he “step down because of incompetence.” Vice Pres. Julio César Franco and Miguel Abdon Saguier of the opposition Authentic Radical Liberal Party organized several protests and lobbied the legislature to have the president impeached and removed from office.

      González was further weakened by a series of corruption scandals involving his family, including an allegation that the president's siblings were involved in the illegal diversion of offshore accounts of nearly $16 million in assets from two failed banks. Also, it was disclosed in March that the president's official car had been illegally imported after apparently having been stolen in Brazil.

      The political crisis was exacerbated by a continued decline in economic and social conditions. Approximately a dozen strikes and roadblocks were staged during the year, most of them by landless peasants, teachers, labour unions, bus drivers, and owners of small businesses. The one thing that all of them had in common was a demand for a coherent and just economic policy and the resignation of González. Paraguay's economy grew by less than 1% during the year, while unemployment was expected to increase from 18% in 2000 to about 25% in 2001.

      The domestic, political, and economic crisis overwhelmed the attention of the government and did not allow for many foreign-policy initiatives. Paraguay hosted the summit of the Southern Cone Common Market (Mercosur) members in Asunción June 21–22. During the summit Paraguay expressed concern about the consequences of exchange-rate adjustments in Argentina, demanding that a compensation mechanism be created to alleviate the negative effects on Paraguayan exports. Finally, after the September 11 terrorist attacks in the U.S., Paraguay was one of only two countries in Latin America to consider offering troops in the U.S.-led effort to stamp out international terrorism.

Frank O. Mora

▪ 2001

Area:

406,752 sq km (157,048 sq mi)

Population

(2000 est.): 5,496,000

Capital:

Asunción

Head of state and government:

President Luis Ángel González Macchi

      In Paraguay the year 2000 began and ended with the country mired in a cycle of political and socioeconomic crises. On February 5 the opposition Authentic Radical Liberal Party (PLRA) opted to leave the national unity governing coalition of Pres. Luis González Macchi. The objective of the coalition was to restore stability and strengthen democracy after the 1999 assassination of Vice Pres. Luis María Argaña. As a result of the PLRA's withdrawal, several cabinet members resigned and the president lost a majority in Congress and the ability to pass much-needed legislation.

      Owing to growing political uncertainty and a deteriorating socioeconomic situation, González faced several dangerous challenges that further weakened his government and Paraguayan democracy. On May 18 rebels attempted to overthrow the government. The mutineers were said to have been loyalists of retired general Lino Oviedo, a fugitive wanted in connection with the Argaña assassination. González declared a state of emergency that lasted some 30 days. More than 70 rebels were arrested, including police officers, legislators, and journalists.

      The hunt for Oviedo continued until June 11, when Brazilian federal police arrested him in Foz do Iguaçu, Braz. Despite Oviedo's detention, González remained unpopular, with an approval rating of only 11%. Paraguay entered another period of crisis as labour strikes and demonstrations against the government's privatization programs led to violence and a growing distrust of the political elite's ability to govern. In the meantime, Paraguayans prepared to vote in the August vice presidential elections; in an exceedingly close race, PLRA candidate Julio César Franco defeated Colorado Party candidate Felix Argaña—the son of the late vice president—by less than 1%. The PLRA's victory brought an end to the Colorado's 53-year absolute hold on power.

      The election restored a degree of legitimacy to the government; however, Paraguay's deteriorating economic situation continued to be a source of deep concern. The year's inflation rate increased to 18%. Unemployment also rose to 18%, and the country's poverty level stood at about 65% of the population. By October, Paraguay's economic situation seemed more uncertain after the removal of Federico Zayas, the well-known and internationally respected minister of economy.

Frank O. Mora

▪ 2000

Area:

406,752 sq km (157,048 sq mi)

Population

(1999 est.): 5,359,000

Capital:

Asunción

Head of state and government:

Presidents Raúl Cubas Grau and, from March 29, Luis Ángel González Macchi

      As Paraguay prepared to celebrate its 10th anniversary of democratic rule in February 1999, the country was in the midst of a constitutional crisis that pitted Pres. Raúl Cubas Grau and his political mentor, retired general Lino Oviedo, against the Supreme Court, Vice Pres. Luis María Argaña, and a significant majority of both chambers of Congress. On February 5 the Supreme Court issued an ultimatum that President Cubas return Oviedo to prison to serve out a 10-year jail term for an attempted coup in 1996. The president defied the court's ruling. As a result, the Congress voted in favour of pursuing impeachment proceedings against Cubas.

      The ruling National Republican Association was badly split between the Cubas-Oviedo faction and a group led by Vice President Argaña, who sought to undermine the president so that he could assume office. On March 23 Argaña was assassinated by a group allegedly linked to Oviedo. The streets of Asunción were taken by striking workers, students, and peasants who demanded Cubas's resignation and the detention of Oviedo. Congress immediately began impeachment proceedings. Oviedo followers subsequently opened fire on the street demonstrators, claiming at least four lives and injuring dozens. By March 29 Cubas had resigned, and both he and Oviedo fled the country. In the absence of Cubas and Argaña, the president of the legislature, Luis Ángel González Macchi, was inaugurated president of Paraguay.

      Political crisis and paralysis and currency devaluation in Brazil had a deleterious effect on the Paraguayan economy. Gross domestic product declined by nearly 4%, and unemployment was estimated to have reached 16%, its highest level in more than 10 years. Moreover, public-sector reforms, such as privatization, remained frozen owing to the political situation and the regional economic crisis.

      Paraguay's domestic political crises also hurt the country's relations with Argentina, Brazil, and Uruguay. Asunción demanded that regional governments extradite leaders of the Cubas government who were to be tried in Paraguay for the Argaña assassination and corruption, and it later disparaged those governments for not doing so. In December Oviedo voluntarily returned home from Argentina, where the new president, Fernando de la Rúa, had indicated he would reverse his predecessor's decision and comply with Paraguay's extradition request.

Frank O. Mora

▪ 1999

      Area: 406,752 sq km (157,048 sq mi)

      Population (1998 est.): 5,223,000

      Capital: Asunción

      Head of state and government: Presidents Juan Carlos Wasmosy and, from August 15, Raúl Cubas Grau

      The 1998 presidential elections demonstrated the fragility of democracy in Paraguay and the divisions within the governing Colorado Party. In March the Supreme Military Tribunal imposed a 10-year sentence on former general Lino Oviedo, winner of the 1997 Colorado presidential primary, for having led an attempted coup in 1996. Though preelection polls indicated a very close contest, Oviedo's running mate, Raúl Cubas Grau, named Colorado candidate by the Supreme Court, won the May election with the slogan "Cubas in government, Oviedo in power."

      In June the congressional opposition passed a bill limiting the president's powers of amnesty; prisoners would have to serve at least half their sentences, and restrictions on their civil and political rights would not be affected by amnesty. This would keep Oviedo locked up until 2003 and prevent his running for president until 2008. In August, however, three days after his inauguration, Cubas reduced Oviedo's sentence to three months (which he had already served). The Supreme Court questioned the constitutionality of the reduction, and impeachment procedures against Cubas were initiated in the legislature, where a new cross-party alliance, the National Democratic Front (FDN), including anti-Oviedo Colorados, was formed. The outcome was a stalemate, with the FDN not strong enough to force impeachment but able to block legislation. Congress asked the Supreme Court to review the decision to free Oviedo, and on December 2 the judges annulled Prime Minister Cubas's decree and ordered the general back to prison.

      Against this background Paraguay's economic problems multiplied. The Asian financial crisis and its impact on Brazil led to a decline in the exchange rate and a drop in central bank reserves. In the third banking crisis since 1995, the central bank closed eight domestic financial institutions. Growth of gross domestic product was expected to drop to 1.6% from 2.5% in 1997. Inflation was projected to leap from 6.2% in 1997 to 19%.

CHARLIE NURSE

▪ 1998

      Area: 406,752 sq km (157,048 sq mi)

      Population (1997 est.): 5,089,000

      Capital: Asunción

      Head of state and government: President Juan Carlos Wasmosy

      The year 1997 was dominated by the Colorado Party's primary elections to choose a candidate for the 1998 presidential elections and by the banking crisis that struck Paraguay in June. The primaries led to intensified rivalry between Pres. Carlos Wasmosy and Luis María Argaña, defeated by Wasmosy for the nomination in 1992 and now party president. The primaries, held in September, were won by Lino Oviedo, a retired general, who polled 36.8%, against 35% for Argaña and 22.5% for Wasmosy's candidate, former finance minister Carlos Facetti.

      This result left Wasmosy as a lame-duck president, opposed by most of his party and, since 1993, without a majority in the legislature. The vote was seen as a victory for those who favoured a return to more authoritarian government and opposed the tentative market reforms of the past decade. Meanwhile, Oviedo, defiant of Wasmosy, found his candidacy for the presidency under challenge in court, and in October he went into hiding from the government, which charged him with sedition.

      Early in the year extensive withdrawals by depositors at three banks caused a liquidity crisis and forced the central bank to close the three institutions. After the closing the central bank announced that nine more financial institutions were "under observation." Unofficial estimates put the cost to the Treasury of honouring deposits at the failed banks at $350 million, but legislation introduced in August increased the guaranteed payment to each depositor from $2,300 to $11,500. This would, according to the central bank, require a $1 billion contingency fund, or about 60% of the annual budget.

      The crisis affected the economy severely. Asunción supermarkets reported a 10-13% drop in sales, and Paraguay's annual economic growth was expected to decline from the 4% predicted to 2.5%, the same rate as in 1996. Consumer price inflation was predicted to fall from 8.1% in 1996 to 6%, and the trade deficit was expected to rise from $1.4 billion to $1.7 billion.

CHARLIE NURSE

▪ 1997

      Paraguay is a landlocked republic of central South America. Area: 406,752 sq km (157,048 sq mi). Pop. (1996 est.): 4,964,000. Cap.: Asunción. Monetary unit: guaraní, with (Oct. 11, 1996) a free rate of 2,075 guaranies to U.S. $1 (3,269 guaranies = £1 sterling). President in 1996, Juan Carlos Wasmosy.

      Democracy in Paraguay, established after the overthrow of Gen. Alfredo Stroessner in 1989, faced its biggest challenge when in April 1996 Pres. Juan Carlos Wasmosy dismissed the army commander, Gen. Lino César Oviedo, for breaking the constitutional ban on political activity by officers currently serving in the military. Oviedo, a candidate for presidential nomination by the ruling Colorado Party in 1998, had called for the postponement of internal party elections. With Oviedo refusing to accept dismissal and amid speculation of a coup, Wasmosy offered to appoint him minister of defense. Under pressure from demonstrators and the opposition majority in Congress, Wasmosy then changed his mind. In June Oviedo was arrested on charges of insurrection. In a newspaper interview from his cell, he claimed that Wasmosy's business interests were profiting from the award of public contracts and that the coup threat in April was an invention of the government.

      Oviedo's defeat provided little relief for Wasmosy, as the Colorado Party winner was Luis María Argaña, a minister under Stroessner who favoured a return to the economic policies of the dictatorship. Argaña's victory forced Wasmosy to rely on him for support and put him in a strong position to win the 1998 nomination.

      Earnings from cotton, Paraguay's most important agricultural export, were reduced by low prices and disease. Total exports were projected at $2.2 billion, compared with $2 billion in 1995, while imports were expected to rise from $3.3 billion to $3.6 billion. (CHARLIE NURSE)

▪ 1996

      Paraguay is a landlocked republic of central South America. Area: 406,752 sq km (157,048 sq mi). Pop. (1995 est.): 4,828,000. Cap.: Asunción. Monetary unit: guaraní, with (Oct. 6, 1995) a free rate of 1,963 guaranies to U.S. $1 (3,103 guaranies = £1 sterling). President in 1995, Juan Carlos Wasmosy.

      The transition to civilian rule after the 40-year dictatorship of Gen. Alfredo Stroessner continued to cause difficulties in 1995. In January a report by the National Human Rights Commission described Paraguay as a "controlled democracy," adding that many crimes committed under Stroessner had not been punished and that assassinations of peasant activists still occurred.

      In February Pres. Juan Carlos Wasmosy retired eight senior military officers, including two who had publicly questioned his authority, and reshuffled the High Command. The new promotions were seen as strengthening the position of Gen. Lino Oviedo, who had commanded the troops that overthrew Stroessner. Some observers suspected that Oviedo had ambitions for the presidency in 1999.

      In May the ruling Colorado Party and the opposition parties finally agreed on legislation to break the Colorado link with the armed forces by banning members of the military from joining political parties or participating in politics. Relations between the military and the national legislature, which was controlled by the opposition, continued to present problems. In July the inauguration of an army parade ground by Wasmosy was marked by scuffles as members of the Authentic Radical Liberal Party protested against its cost. In August a group of senior officers wrote to the newspapers demanding that the legislature honour Wasmosy's 1994 pledge to double army salaries in 1995-96.

      The Paraguayan economy was generally sheltered from the direct effects of the Mexican financial crisis. Inflation was about 17% (18.3% in 1994). There were record harvests for soybeans (up 17%), corn (maize; up 80%), and wheat (up 40%). The trade deficit was projected to remain at its 1994 level of $1 billion (exports $2 billion, imports $3 billion). (CHARLIE NURSE)

▪ 1995

      Paraguay is a landlocked republic of central South America. Area: 406,752 sq km (157,048 sq mi). Pop. (1994 est.): 4,732,000. Cap.: Asunción. Monetary unit: guaraní, with (Oct. 7, 1994) a free rate of 1,919 guaranies to U.S. $1 (3,053 guaranies = £1 sterling). President in 1994, Juan Carlos Wasmosy.

      August 1994 marked the first anniversary of Paraguay's return to civilian leadership. The adjustment to multiparty democracy proved difficult for the ruling Colorado Party and its leader, Pres. Juan Carlos Wasmosy. He faced a legislature dominated by opposition parties determined to break the Colorado Party's relationship with the military. On May 28 Congress approved a law that would have banned members of the armed forces from political party membership and activity. The government and military high command immediately initiated legal proceedings to have the law declared unconstitutional. This caused the opposition, led by Domingo Laíno of the Authentic Radical Liberal Party, to withdraw from its cooperation pact with the Colorados.

      Violent clashes between peasant farmers and police in February affected several regions of the country. Some 100 demonstrators blockading roads from the capital, Asunción, were injured when police opened fire with rubber bullets. The farmers were demanding government subsidies to compensate for losses due to low cotton prices. They gained widespread support from church organizations, labour unions, and opposition parties, but the government refused to relent. Ironically, international cotton prices rose by some 29% in 1994, but a 12% decline in Paraguay's cotton harvest prevented small farmers from reaping the benefits. An estimated 220,000 rural families depended on cotton for their livelihood. In order to stop deforestation through illegal exporting of wood products, mainly to Brazil, the government banned all exports of timber on December 14.

      Labour unions and peasant organizations staged a general strike on May 2 to demand pay increases of up to 40% and land reform and to protest against the government's plans to privatize public-sector companies. The government conceded that the purchasing power of wages had fallen by 42% in the five years to June 1994 but offered pay increases of only 35%. Inflation remained under reasonable control in 1994 but was expected to end the year at 22%, slightly above the 19.5% recorded in 1993. (JANET KRENGEL)

▪ 1994

      Paraguay is a landlocked republic of central South America. Area: 406,752 sq km (157,048 sq mi). Pop. (1993 est.): 4,613,000. Cap.: Asunción. Monetary unit: guaraní, with (Oct. 4, 1993) a free rate of 1,772 guaraníes to U.S. $1 (2,685 guaraníes = £1 sterling). Presidents in 1993, Gen. Andrés Rodríguez and, from August 15, Juan Carlos Wasmosy.

      In what were considered to be the first free multiparty elections in Paraguay's history, held on May 9, 1993, Colorado Party candidate Juan Carlos Wasmosy (see BIOGRAPHIES (Wasmosy, Juan Carlos )) won the presidency. He took approximately 40% of the vote, followed by Domingo Laíno of the Authentic Radical Liberal Party, Guillermo Caballero Vargas of the newly formed National Encounter and the favourite in preelection polls, and three other candidates. Wasmosy, who had taken the nomination of the Colorado Party from Luis María Argaña in a disputed election, thus extended the rule of the governing party and also became the first civilian president of Paraguay since 1954.

      Wasmosy's win reflected in part strong support from the outgoing president, Gen. Andrés Rodríguez, and the military. Shortly before the elections the government raised the minimum wage, and Rodríguez called on public-sector employees to vote for the Colorado Party candidate, amid suggestions by some that a win by the opposition would put their jobs in jeopardy. Teachers were used to mobilize the rural vote. A prominent military man, Gen. Lino Oviedo, made the widely publicized statement that the armed forces and the Colorado Party would rule Paraguay forever. Some fraud and irregularities were reported during the voting; among other problems, the military prevented emigrants living in Argentina and Brazil, who normally would support the opposition, from entering Paraguay to vote. Nonetheless, observers from the National Democratic Institute for International Affairs, including former U.S. president Jimmy Carter, and the Organization of American States judged the outcome to be fair.

      The new president favoured a free-market economy, advocating the privatization of businesses and the extension of free trade. It was thought, however, that Wasmosy might have difficulties with Congress since the Colorado Party had failed to win control of either house and all parties were troubled by factional fighting. (MICHAEL WOOLLER)

* * *

Introduction

Paraguay, flag of   landlocked country in south-central South America. Paraguay's recent history has been characterized by turbulence and authoritarian rule. It was involved in two of the three major wars on the continent—the War of the Triple Alliance (Triple Alliance, War of the) (1864/65–70), against Argentina, Brazil, and Uruguay, and the Chaco War (1932–35), against Bolivia. Moreover, a civil war in 1947 and the long dictatorship of Alfredo Stroessner (Stroessner, Alfredo) (1954–89) left a deep legacy of fear and self-censorship among Paraguayans, who only began to overcome these impediments in the early 21st century. Since 1989 the democratization process has been rocky, and Paraguay has experienced bouts of instability in its military, the assassination of a vice president in 1999, and the indictment of former presidents Juan Carlos Wasmosy (1993–98) and Luis González Macchi (1999–2003) on corruption charges. In 2008 Paraguay's Colorado Party, the longest continuously ruling political party in the world, lost power for the first time since 1947. The national capital is Asunción.

      Paraguay has a more homogeneous population than most other countries in South America; most Paraguayans are of European and Guaraní ancestry. The Guaraní culture is strongly represented through folk art and festivals, and Guaraní was designated an official language of Paraguay in the country's 1992 constitution. Paraguayans are intensely nationalistic and are proud to converse in Guaraní, which acts as a strong marker of their identity. The language is much more widely spoken in Paraguay than is Spanish.

      Rivers play an extremely important role in the economic life of Paraguay. Indeed, the name of the country is said to derive from the Guaraní word meaning “river that gives birth to the sea.” Rivers provide access to the Atlantic Ocean and as sites for the hydroelectric power plants that have made Paraguay one of the world's largest exporters of hydropower. The country is also a major world producer of soybeans, and Paraguayans in parts of the fertile eastern border region have achieved relatively high standards of living based on modern diversified agricultural production. The growth of cooperative farms throughout Paraguay has increased the quality of life for many farmers who previously had depended on small-scale farms dedicated to the cultivation of a single crop. Nevertheless, the issue of land reform has remained unresolved since the 1880s and has given rise to extreme levels of inequality since the 1990s.

Land (Paraguay)

 Paraguay is bounded by Bolivia to the northwest and north, Brazil to the northeast and east, and Argentina to the southeast, south, and west. Asunción is located on the east bank of the Paraguay River, opposite the mouth of its primary western tributary, the Pilcomayo River. The Paraguay River, which runs from north to south, divides Paraguay into two distinct geographic regions—the Región Oriental (Eastern Region) and the Región Occidental (Western Region), also called the Chaco Boreal.

Relief

      The Eastern Region, with an area of about 61,700 square miles (160,000 square km), is an extension of the Brazilian Plateau and varies in elevation from about 165 feet (50 metres) above sea level in the southwest to a few hills that rise to 2,500 feet (760 metres) in the east. The Amambaí (Amambay) Mountains (Amambaí Mountains) run approximately north to south along part of the border with Brazil and then run eastward as the Mbaracayú Mountains. From the northeast, other ranges extend southward toward Encarnación, diminishing to hills in the south. The highest peak is Mount San Rafael at 2,789 feet (850 metres), in the Cordillera de San Rafael in southeastern Paraguay. To the west lies the broad valley of the Paraguay River. The area from Encarnación northward to the Brazilian border, comprising one-third of eastern Paraguay, is called the Paraná Plateau. The western part of the Eastern Region and the Paraná valley north and east of Encarnación are the areas most favourable to human settlement. The Chaco Boreal, which covers more than 95,000 square miles (246,000 square km), about two-thirds of the country, forms the northeastern part of the Gran Chaco, a flat and largely featureless tropical region that extends into Bolivia and Argentina.

Drainage

      Four-fifths of the country's perimeter is traced by the Paraguay, Apa, Paraná, and Pilcomayo rivers. To the east of the Cordillera de San Rafael lies the Paraná (Paraná River) (Alto [Upper] Paraná) River valley. To the west lies the broad valley of the Paraguay River. The Paraná forms both the eastern and southern borders of the country. Multiple tributaries of the Paraguay and Paraná cross the eastern and central regions. The mountain ranges of Amambay and Mbaracayú form the watershed between the Paraguay and the Paraná rivers. Important eastern tributaries of the Paraguay River include, from north to south, the Apa, Aquidabán, Ypané, Jejuí Guazú, and Tebicuary. Except for the Acaray and Ytambey rivers, the streams that flow into the Paraná have little economic significance. The Paraná joins the Paraguay River at the country's southwestern corner. The only important tributary flowing from the west is the sluggish Pilcomayo (Pilcomayo River), which joins the Paraguay near Asunción. Rising to the northwest in Bolivia, the Pilcomayo forms the southern border of the Chaco Boreal and is navigable in its lower reaches by small boats. Other Chaco rivers, including the Verde and Monte Lindo, are slow, sluggish, intermittent streams that drain into swamps or disappear during dry periods.

      Paraguay has only two lakes of consequence. The largest, Lake Ypoá, about 40 miles (65 km) south of Asunción, merges into Lake Verá; it is drained by channels of the Tebicuary and feeds the marshes of the Ñeembucú plain. Lake Ypacaraí, about 30 miles (50 km) east of Asunción, is the site of a favourite summer resort at San Bernardino.

Soils

      A large part of eastern Paraguay is covered by a residual soil mantle so deep that bedrock is rarely exposed. This soil is generally red and sandy and is low in nitrogen and other basic plant foods. About two-fifths of eastern Paraguay, in a belt running from the Brazilian border south to the Tebicuary and including the Asunción area, is covered by soils underlain by sandstone. Soils from basaltic lava, which generally are the most fertile, cover the Paraná Plateau. Transported soils cover a band along the Paraguay River, extending from the Apa River to the southern border and covering the Ñeembucú plain. Soils of the Gran Chaco are largely alluvial mud, clay, and sand that have been transported from the Bolivian highlands.

Climate

      The climate is subtropical in most of the Eastern Region, which mainly lies south of the Tropic of Capricorn, and tropical in most of the Chaco Boreal extending to its north. Masses of humid air blanket the country in the summers, and the winters are subject to cold southern winds. Summer temperatures, between October and March, generally range from 75 to 100 °F (24 to 38 °C). Winter temperatures usually range from 60 to 75 °F (16 to 24 °C), although extremes in the 30s and 100s °F (about −1 and 40 °C) are not uncommon. Frost occurs frequently in the Eastern Region.

      The annual average rainfall in eastern Paraguay varies from 65 inches (1,650 mm) in the southeast to about 55 inches (1,400 mm) along the Paraguay River. It diminishes gradually westward across the Chaco Boreal, averaging about 30 inches (760 mm). The heaviest rainfall is from October to April. The entire country is subject to periodic floods and droughts, both of which cause severe agricultural losses.

Plant and animal life

      Forest resources of the Chaco include many species of hardwoods that yield tannin, of which the red quebracho is the most important. Perhaps the most famous is the samuú, on account of its bottle-shaped trunk. More than 500 species of hardwoods have been identified, among which are the urunday, peterebi, curupay, lapacho, and many kinds of palms. The supply of cedars has been exploited extensively for furniture, boxes, and general use. Large stands of plants or trees of the holly family (Ilex paraguariensis) grow throughout the country, and the leaves are harvested and dried to produce maté, a tealike beverage. Numerous palms, such as the caranday, are commercially useful. The very hard palo santo (“holy wood”) yields a valuable oil. Much of the Chaco is covered by cacti and a thorny scrub growth similar to the caatinga of Brazil's northeast. Medicinal plants, which formerly were the basis of an extensive native pharmacopoeia, abound in Paraguay and include marijuana, the illegal cultivation of which increased dramatically beginning in the 1990s, mainly for export to Brazil. Since the early 21st century, there also has been growth in the production and export of medicinal teas and stevioside, which is extracted from the Stevia rebaudiana plant and used as a low-calorie natural sweetener.

      Wildlife includes marsh deer, monkeys, armadillos, anteaters, otters, wild boars, tapirs, jaguars, ocelots, bats, and the coypu, a South American aquatic rodent. In the Chaco there is a small reserve of Chacoan peccaries, thought by scientists to be long extinct until the early 1970s, when living representatives of the species were discovered. Some types of caimans (particularly the yacaré), parrots, and macaws are threatened because of illegal trade. There is also extensive trading in armadillo, snake, and iguana skins for export. The birdlife is spectacular and includes parakeets, rheas, ibises, herons, toucans, eagles, falcons, and doves. The tarantula spider is common in Paraguay, and certain types (genus Theraphosa) eat small avian prey. Insect life is extensive and includes locusts, mosquitoes, and cockroaches. Paraguay's rivers abound with fish, including the piranha.

People (Paraguay)

Ethnic groups

      Paraguay has one of the most homogeneous populations of any South American country. The vast majority of inhabitants are almost all mestizo (of mixed European and Indian ancestry). They pride themselves on their Guaraní descent, although the admixture of European strains is prominent. About 300,000 Brazilians, many of them farmers, immigrated to the Eastern Region in the 1970s because land in Paraguay was cheaper than in Brazil. Other immigrants have come from western Europe, particularly Germany, Italy, and Spain, and from Japan, Korea, China (Hong Kong), and Taiwan. There are about 30,000 German-speaking Mennonites (Mennonite) in Paraguay, about half of whom live in colonies in the Chaco.

      Indians (South American Indian) make up about 2 percent of Paraguay's population. Ethnically distinct groups include the Pai-Tavyterá, Mbyá, Aché, and Chiripá in the east and the Toba, Maskoy, Lengua, Nivaklé, Tapieté, Ayoreo, and Chamacoco in the Chaco. Other smaller Indian groups reside throughout Paraguay. Some are threatened with extinction through forced assimilation and the takeover of their traditional lands by Brazilian loggers and landless peasants. The welfare of the country's indigenous peoples is the official responsibility of the Paraguayan Indian Institute. Many Indians also receive support from missionary groups.

Languages

      As established in the 1992 constitution, Spanish and Guaraní are the official languages of Paraguay. Guaraní is spoken by nearly nine-tenths of the population, but it has only been used as a language of instruction in schools since 1996. Spanish is used almost exclusively in government and business. At least half of the population is bilingual. The constitution also recognizes other Indian languages as part of the country's heritage.

Religion

      About nine-tenths of the population professes adherence to Roman Catholicism. There is also a sizable minority of evangelical Protestants. The constitution recognizes no official religion and emphasizes the state's independence from the Roman Catholic Church.

Settlement patterns

      Paraguay has one of the lowest population densities in the world. Only a very small percentage of the population lives west of the Paraguay River in the Chaco; the principal areas of rural settlement are in the Eastern Region, where Paraguayans and Brazilians have settled in large numbers since the 1970s, particularly in the regions of Alto Paraná, Itapúa, and Canindiyú. The Mennonite colonies in the Chaco were first established about 120 miles west (190 km) of Puerto La Victoria (Puerto Casado) in the 1920s and '30s. Japanese immigrants, especially after the 1930s, established thriving agricultural colonies southeast of Asunción and near Encarnación. Korean immigration to Paraguay began in the 1960s, and small Korean communities exist in the country's larger cities.

      The largest city is the capital, Asunción, whose metropolitan area includes the cities of San Lorenzo, Luque, and Fernando de la Mora. Ciudad del Este (formerly Puerto Presidente Stroessner), Hernandarias, and Puerto Presidente Franco, all in the extreme eastern part of the country, have grown rapidly since the 1970s. Other important urban centres are Concepción, Encarnación, Pedro Juan Caballero, Coronel Oviedo, Caaguazú, Santa Rita, and Villarrica.

Demographic trends

      Between 1970 and the mid-2000s the population of Paraguay increased from 2.4 million to more than 6 million as a result of a decreasing death rate and a continued high birth rate. Though the birth rate has fallen since the end of the 1990s, it is still slightly higher than the world average. This explosive growth has resulted in a relatively young population. About two-fifths of Paraguayans are under the age of 15.

      Paraguay is less urbanized than most Latin American countries, however, the proportion of the population living in urban areas rose slowly throughout the 1990s, reaching more than half by the early 21st century. emigration has been high since the mid-20th century, when a significant number of Paraguayans began seeking employment in neighbouring countries, especially in Argentina. Since 2000 many young adults have emigrated to Europe (principally Spain) and the United States as well.

Economy

      Until the mid-1970s, public-sector investment in Paraguay was low by Latin American standards and was concerned mainly with improving roads, telecommunications, and air transport. This situation changed with the establishment of several state companies, most notably Itaipú Binacional, set up in 1973 to build a huge hydroelectric dam on the Paraná, and steel, cement, and alcohol-distillation plants. Impressive economic growth, particularly in the 1970s, was not matched by government efforts to distribute its benefits equitably. Most Paraguayans, especially in rural areas, remained poor. The police and armed forces absorbed a large portion of the budget.

 During the late 20th century, public-sector employment grew rapidly, making up about one-tenth of the labour force. Until 1982, when the construction of the Itaipú Dam was completed, Paraguay was able to offset its trade deficit with international loans. For the rest of the decade, however, the country was faced with a growing fiscal deficit, high debt repayments on commercial borrowing, and dwindling international reserves.

      The government of Gen. Andrés Rodríguez (1989–93) implemented a number of economic reforms designed to introduce a market-based economy. They included the abolition of a multiple exchange rate, the reduction in subsidies to state companies, and the elimination of export taxes. His successor, Juan Carlos Wasmosy (1993–98), began a mild program of privatization. Economic mismanagement during the early 2000s led to a near default on external debt repayment obligations, which was narrowly averted by strict adherence to an International Monetary Fund stabilization program. By the early 21st century, the economy was experiencing rapid growth in the export of soybeans and meat products.

Agriculture, forestry, and fishing

      Agriculture is one of the most important economic activities in Paraguay, employing slightly more than one-third of the workforce. It accounts for about one-fifth of the gross domestic product and the vast majority of exports. Important cash crops include soybeans, corn (maize), wheat, rapeseed, sesame, sugarcane, rice, peanuts (groundnuts), and cassava (manioc). Many farmers practice direct sowing, a mechanized system intended to preserve land nutrients and avoid erosion; much of the grain in Paraguay is grown by this method. The country is self-sufficient in many foodstuffs but is still highly dependent on the vagaries of climate and world commodity prices for its main agricultural products.

      Although about one-fifth of Paraguay's total land area is suitable for intensive cultivation, only a small amount of this is utilized steadily, and virtually all of it is in the Eastern Region. Most farm units are occupied by owners, but there are large numbers of tenant farmers and squatters. Paraguay has a highly skewed system of land tenure, which is largely a legacy of land sales following the War of the Triple Alliance (Triple Alliance, War of the) (1864/65–70). During the late 20th century, more than three-fourths of the land was owned by 1 percent of landholders. The Rural Welfare Institute has helped several thousand farmers acquire land, but the farmers' access to land titles has been problematic. The number of landless families remains high, and conflicts between large government-backed landowners, especially Brazilian soybean farmers, and groups of landless peasants seeking land reform continued into the 21st century. Some pigs, sheep, chickens, and horses are raised, but cattle are the most important livestock. Cattle raising, a traditional activity, is particularly prevalent in the Chaco and in the southern regions of Misiones and Ñeembucú. Mennonite communities in Paraguay have formed successful farm cooperatives, which provide about half of the country's dairy products. Meat, dairy products, and hides are consumed domestically and exported.

      Timber products have long been an important export for Paraguay. More than half of the country was forested in the 1940s, particularly the north and east, but by the end of the 1980s the proportion had dropped to nearly one-fourth. Rapid deforestation began in the 1970s, largely as a result of the extension of the agricultural frontier in the eastern border region. Widespread environmental damage ensued, as reforestation has been minimal. Official estimates of the rate of deforestation suggest that Paraguay is in danger of losing virtually all its forests by the middle of the 21st century. In 2004 the Paraguayan government passed the Zero Deforestation Law, which prohibits the conversion of forested area in Paraguay's Eastern Region. Strong enforcement of the law has helped to lower the deforestation rate dramatically. Nevertheless, illegal logging in national parks has remained a threat.

      Fish are plentiful in the rivers, and surubí (a species of catfish), pacu (a large river fish), and dorado (which resemble salmon) are popular domestically. There is no large-scale commercial fishing industry, however.

Resources and power

Mining and quarrying

      Paraguay has relatively few proven mineral resources, and most mineral deposits are found east of the Paraguay River. Manganese is located near Emboscada; malachite and azurite (copper ores) near Caapucú, Encarnación, and San Miguel; feldspar and mica near Concepción; and talc and piroflita (hard, iron-bearing flagstone) near Caapucú and San Miguel. Ochre is found in the Cordillera region, and gypsum and limestone are found near the Paraguay River; there is some peat near Pilar. Copper, bauxite, iron, and uranium ores have been reported, and beginning in the early 2000s, concessions were granted to companies for gold and diamond prospecting. Extensive drilling in the Paraguayan Chaco has failed to find any commercially viable hydrocarbons. Despite the varied mineral resources, mining and quarrying are among the least-developed economic activities. Because of the limited quantities of proven mineral reserves, there is quarrying of only limestone, gypsum, and clays, which are used mostly for construction.

Energy

      Paraguay's most important natural resource is its hydroelectric potential. Most electricity in Paraguay came from wood- and oil-burning thermoelectric plants in Asunción until the Acaray hydroelectric power plant began operating in 1968. When the plant's capacity was expanded, Paraguay's total production increased more than 15-fold from 1970 to 1990. Nearly all of this increase came from hydroelectric sources. Distribution of electricity is controlled by the National Power Company, which was created in 1949.

 A dramatic and far-reaching economic event in Paraguay's history was the construction, in partnership with Brazil, of the hydroelectric project at Itaipú Dam on the Paraná, about 10 miles (16 km) north of the Friendship Bridge at Ciudad del Este. Itaipú Dam is one of the largest dams in the world and has one of the world's highest planned generating capacities. Work was completed in 1982 on the main gravity dam, 643 feet (196 metres) high and 4,045 feet (1,233 metres) long, spanning the Paraná. The reservoir created by the dam covers about 870 square miles (2,250 square km) of Paraguayan and Brazilian territory. The last of its many turbines was completed in 2007. At the beginning of the 21st century, many Paraguayans began to question the terms of the 1973 Treaty of Itaipú, because they believed Brazil was not paying enough for the energy it was using. Under the treaty, it had been agreed that Paraguay would own one-half of the electricity that was generated but that it would sell its excess power exclusively to Brazil at predetermined rates for 50 years.

      The Yacyretá hydroelectric project, a joint Paraguayan-Argentine effort in the Yacyretá-Apipé islands zone of the Paraná, was established by a 1973 treaty. Its construction was hindered by delays, however, and the plant operated below capacity for many years because of lack of financing to complete the ancillary works. In 2004 Paraguay and Argentina reached an agreement to complete the necessary work so that the reservoir on the Paraná River, which was first filled in 1994, would reach its optimum depth and boost the dam's electricity-generation capacity. (This came about partly because Argentina had been experiencing energy shortages.) Because domestic demand absorbs only a small percentage of the combined output of Itaipú and Yacyretá, Paraguay has become one of the world's largest exporters of electricity.

Manufacturing

      Although the industrial sector registered high growth rates in the late 1970s and early '80s, Paraguay is one of the least industrialized countries in South America. Manufacturing is generally small-scale and directed toward processing agricultural products. These include refined soybean oil, flour, sugar, tinned meat, textiles, leather products, alcohol, beer, and cigarettes. The construction and cement industry boomed in the late 1970s and early '80s because of the Itaipú Dam and other hydroelectric projects. A small steel mill, inaugurated in 1986, and a factory that has produced ethyl alcohol (ethanol) from sugarcane since 1980 were sold in the 1990s under a privatization program instituted by the government.

Finance

      The main state banks are the Central Bank of Paraguay, which handles all monetary functions, and the National Development Bank, which grants credits to agricultural enterprises and manufacturers. There are also branches of Latin American, European, and U.S. commercial banks. Foreign currency is freely available at banks and exchange houses. In 1992 the government approved laws encouraging foreign investment and the development of a stock market. Dollarization of the economy was pronounced following a series of bank collapses from 1995 to 2002, but depreciation of the U.S. dollar and improved macroeconomic management led to more than two-fifths of deposits in the banking system being held in domestic currency in the early 21st century. The guaraní, Paraguay's national currency, has been relatively stable by Latin American standards.

Trade

      Until the 1970s the economy was largely dependent on the export of tannin, meat products, yerba maté, tobacco, and cotton. Whereas these products have declined, the cultivation of soybeans, which are grown in the Eastern Region, has increased significantly. By 2006, Paraguay was one of the top exporters of soybeans in the world. Soybeans and the country's other principal exports—meat products, wheat, corn (maize), and sawn timber—are marketed primarily in Uruguay, Brazil, Argentina, The Netherlands, Italy, Germany, and Switzerland. Paraguay imports machinery, petroleum and petroleum products, chemicals, and automobile and bus parts, principally from Brazil, Argentina, China, the United States, and Japan. The country's trade statistics have been severely underestimated because of widespread smuggling of consumer goods to Brazil and Argentina; however, from the late 1990s the Brazilian government's introduction of stricter control of purchases made in Paraguay led to a drop in the smuggling trade. Paraguay is a member of Mercosur, a regional economic organization formed by the Treaty of Asunción in 1991.

Services

      The service sector accounts for about two-fifths of the country's gross domestic product and employs about one-fifth of the country's documented workforce. Tourism plays an important role in the economy, and Paraguay's many historic churches and towns serve as points of interest. Several missions established by the Jesuits in the 17th and 18th centuries remain; two of these, La Santísima Trinidad de Paraná and Jesús de Tavarangue, were designated UNESCO World Heritage (World Heritage site) sites in 1993. The Chaco region is home to many national parks and biological reserves. On Paraguay's eastern border, Iguazú Falls and the Itaipú Dam are frequently visited sites, as is Ciudad del Este, one of South America's largest shopping centres, where visitors come from mainly Brazil and Argentina to buy duty-free goods.

Labour and taxation

      Paraguay has one of the most inequitable income distributions of any country. Unemployment remains high; more than one-fifth of the workforce is unemployed or underemployed. Women make up about one-third of the labour force and work mainly in factories and domestic service. Under Gen. Alfredo Stroessner (Stroessner, Alfredo) (1954–89), labour unions were strictly controlled, which helped to keep wage increases low. For most of his rule, the country had one large, government-recognized trade union, the Confederation of Paraguayan Workers (Confederación Paraguaya de Trabajadores; CPT). After Stroessner's fall, a number of independent union groupings emerged, most notably the Unified Workers Central (Central Unitaria de Trabajadores; CUT). About one-seventh of workers are members of Paraguay's more than 1,500 labour unions.

      Paraguayan residents and nonresidents alike are subject to individual income tax depending on their income levels. Paraguay has a limited business tax and a slight value-added tax. Since 1991, taxes in Paraguay have been lower than those in other South American countries to compensate citizens for the earlier misuse of tax funds by the government. In general, tax evasion has been widespread in Paraguay. In the early 21st century the rate of taxation on businesses was reduced in a move to ensure companies' compliance.

Transportation

      During the mid-20th century, most international freight was transported along the Paraguay and Paraná rivers, which link Asunción and other Paraguayan ports to the Atlantic Ocean via Argentina. From the 1970s freight was increasingly taken by road, particularly to the Brazilian ports of Santos and Paranaguá; however, since 2000 there has been a resurgence of the use of river barges, especially in transporting soybeans for export, because of rising fuel costs.

Roads

 Paraguay has a sizable road network equipped with adequate bridges, but a considerable portion remains unpaved. The country's major highway network forms a triangle connecting Asunción, Encarnación, and Ciudad del Este, where the Friendship Bridge spans the Paraná and carries the highway into Brazil. This paved road continues to the port of Paranaguá, a free trade zone. Another bridge links Encarnación to Posadas, Arg., while a suspension bridge, part of the Pan-American Highway, links Asunción and Clorinda, Arg. A bridge links Asunción to the Trans-Chaco Highway, which runs northwest to the Bolivian border.

Railways

      The railway system is made up of the Ferrocarril (Railway) Presidente Carlos Antonio López. It used to run from Asunción southeastward to Encarnación, where it connected with a train ferry to Posadas; however, only a small section continues to operate—from the outskirts of Asunción to Areguá, beside Lake Ypacaraí—and it is used exclusively for tourism.

Water transport

      Asunción is the country's largest port and has modern facilities. The port of Villeta, about 12 miles (20 km) south of Asunción, is also important. Paraguay's merchant marine, the state-owned Flota Mercante del Estado, was created in 1945 and operated cargo vessels on the Paraguay and Paraná rivers. In the 1990s it was split into several entities and privatized.

Air services

      The state-owned airline, Líneas Aéreas Paraguayas, was privatized in 1994; now owned principally by Brazilian Transportes Aéreo Marilia, it was renamed TAM Mercosur. National Transport Airlines serves interior cities. An international airport is located 9 miles (15 km) from Asunción. In 1996 another international airport opened near Ciudad del Este, on the border with Brazil.

Telecommunications

      Paraguay has one of the lowest ratios of fixed-line telephone and Internet usage per person in South America. Partly in response to this, cellular phone use has risen dramatically, with about one-half of Paraguayans having cellular phone service.

Government and society

Constitutional framework

 The 1992 constitution is the basic charter of Paraguay. It was drawn up by a Constituent Assembly, which was elected in December 1991, and it replaced the constitution of 1967. The constitution states that Paraguay is a representative and pluralist democracy and that government is exercised by the separate powers of the legislature, executive, and judiciary bodies.

      The legislative body is the Congress, composed of the Chamber of Deputies and the Senate. All its members are elected by popular vote for five-year terms on the same date that the presidential elections are held.

      The president is elected by a simple majority of votes for a five-year term and must be a Paraguayan by birth and at least 35 years old. There is no runoff election if the leading candidate fails to obtain an absolute majority. Stroessner amended the 1967 constitution in 1977 to allow his reelection indefinitely as president, but the 1992 constitution specifically rules this out. The president is the commander in chief of the armed forces and is authorized to appoint and remove commanders of the army and police. The 1992 constitution created the post of vice president. A council of ministers is appointed by the president.

      The constitution guarantees the right to strike, specific rights for indigenous peoples, and basic civic liberties, including freedom of expression, of association, and of religion. The death penalty (capital punishment) was abolished in 1992. Exceptions to the constitution can be made by the president or the Congress only in cases of international armed conflict or serious internal unrest.

Local government

      Paraguay is divided into departamentos (departments). Each department is further divided into distritos (districts). Until 1991 the central government appointed departmental governors and local mayors, but in May of that year direct municipal elections were held for the first time. The 1992 constitution, in another innovation, provided for elections for a governor and a departmental board for each department, also to be held every five years.

Justice

      The judicial system is headed by the Supreme Court. The 1992 constitution increased the number of justices from five to nine; they are chosen by the Senate and the president and are appointed for a term of five years. Judges who are confirmed for two terms following the terms of appointment cannot be removed from their post until they reach the mandatory retirement age established for Supreme Court justices. The Supreme Court appoints judges of lower courts and magistrates. There is also an attorney general appointed by the president. The judiciary body has budgetary autonomy. Supreme Court rulings have generally been inconsistent and politically influenced.

Political process

      Voting is compulsory for all Paraguayans age 18 to 75. Elections are governed by an electoral code, which can be changed by Congress. Resident aliens are allowed to vote in municipal elections. Until 1990 the party that won a simple majority was awarded two-thirds of the seats of both chambers; this was replaced by a system of proportional representation.

      From the late 19th century, Paraguay's two traditional political parties were the Liberal Party (last in power in 1940) and the National Republican Association (Asociación Nacional Republicana; ANR), popularly known as the Colorado Party. From 1947 until 1962 the Colorado Party was the only legal party in Paraguay, and it remained in power continuously until 2008. Under Gen. Alfredo Stroessner's rule (1954–89), all political parties were closely controlled, including the dissident factions of his Colorado Party. The police kept dossiers on citizens, particularly political opponents, and political repression was widespread. Senior generals played a major part in government.

      Political freedom improved significantly under Presidents Andrés Rodríguez (1989–93) and Juan Carlos Wasmosy (1993–98), and the internal factions of the Colorado Party were openly tolerated. In 2008 Fernando Lugo was elected president as the candidate of the Patriotic Alliance for Change (Alianza Patriótica para el Cambio; APC), a centre-left coalition that included the Authentic Radical Liberal Party (Partido Liberal Radical Auténtico; PLRA), an offshoot of the traditional Liberal Party, as well as a number of groups representing the interests of Indians, peasants, and leftist unions. Among the country's other political parties are the Paraguayan Communist Party (Partido Comunista Paraguayo; PCP), the Beloved Fatherland Party (Partido Patria Querida; PPQ), and the National Union of Ethical Citizens (Partido Unión Nacional de Ciudadanos Éticos; PUNACE). Parties dedicated to the substitution of force for democracy may not be organized. No party may receive aid or instructions from foreign organizations or states or establish structures that directly or indirectly embrace violence as a political methodology.

      The family usually determines an individual's allegiance to political parties; a change of political affiliation is often considered an act of betrayal. Party membership means less the adherence to a political ideology than the unswerving support of the party's candidates. Especially in the rural areas, such loyalty is often the route to employment.

Security

      Paraguay's military consists of an army, navy, and air force. The 1992 constitution reduced military service (which is compulsory for males age 18 and older) from 18 to 12 months; conscientious objectors may opt for an alternative to service. During the Stroessner years, all military officials were obliged to become members of the Colorado Party. The 1992 constitution banned all military personnel in active service from belonging to political parties or engaging in any political activity.

Health and welfare

      Measles, tuberculosis, acute respiratory infections, dysentery, hookworm, and hepatitis are prevalent in Paraguay. Chagas disease (Chagas' disease) and leishmaniasis are endemic, and there have been sporadic outbreaks of the mosquito-borne dengue fever and yellow fever. Although infant mortality rates have declined significantly since the 1960s, they are still higher than those of other South American countries. Malnutrition and limited public health services, especially poor implementation of immunization programs, have led to thousands of preventable deaths, particularly in rural areas, where the health of residents is generally worse than that of their urban counterparts. By 2000, about four-fifths of Paraguayans had access to safe drinking water (water supply) (up from about three-fifths in 1992), yet in general the government has spent little on health care. About four-fifths of Paraguayans do not have health insurance. The state-run Institute of Social Provision (IPS) is funded by contributions from government, employers, and employees. It offers pensions, medical care, and subsidies during illness but reaches only a small percentage of the salaried workers.

Education

      Basic education is free and, where possible, compulsory for children between ages 7 and 13. Although the official enrollment figures are high, the dropout rate is also high. More than nine-tenths of the population is literate, though functional literacy is probably lower. The two oldest universities—the public National University of Asunción (1890) and the private Our Lady of the Assumption Catholic University (1960)—are located in Asunción, with branches in other towns. These universities also have specialty schools for engineering, medicine, agriculture, business, and veterinary science. Beginning in the 1990s, the number of private universities has increased. At least half of all university graduates are female. Government spending on education increased after a 1992 constitutional requirement portioned one-fifth of the government's budget for that purpose. Nevertheless, the number of schools is still insufficient, especially in rural areas, and teaching resources are inadequate throughout the country.

Cultural life

Cultural milieu

      The main characteristic of Paraguayan culture is its fusion of both the Guaraní and Spanish traditions. Folklore, the arts, and literature reflect this dual origin. The country's outstanding handicraft is the production of ñandutí (nanduti) lace, which is thought to represent a combination of 16th-century needle lacemaking techniques from Europe with Guaraní traditions.

Daily life and social customs

      Social life tends to revolve around the family. Godparents are particularly important; if parents become unable to provide for their children, godparents are expected to assume responsibility for them.

      Paraguayan cuisine reflects traditional Guaraní cooking styles. Beef dishes and freshwater river fish are popular. Other typical foods are soups, often with meat, and various breads, especially chipa, which is flavoured with cheese and egg. Corn (maize) is a staple ingredient in many dishes, including sopa paraguaya, a pie made from corn, eggs, and milk; avatí mbaipy, a corn soup; and mbaipy he-é, a dessert made from corn, milk, and molasses. Beer and caña, a cane sugar spirit, are popular drinks. Yerba maté, the local herbal tea, is consumed year-round—chilled in summer, hot in winter. A common pastime is drinking tereré (a bitter tea made from the same type of leaves that are used to brew yerba maté) from a shared gourd or from a hollowed cow's horn, or guampa, which often is beautifully carved.

      Outside Asunción the pace of life is slow. Religious celebrations throughout the country are well attended; for example, thousands of Paraguayans visit Caacupé on December 8 to participate in the city's annual celebration of the festival of the Virgin of Miracles. The Feast of Saint John (San Juan Ara), on June 24, is celebrated with traditional games, one of which includes walking on hot coals. The country's Afro-Paraguayan community at Kamba Kua celebrates an annual music and dance festival. Throughout the country, on August 1 it is a tradition to imbibe carrulim, a Guaraní drink made of caña, ruda (a root plant that produces yellow flowers and is used mostly as a medicine), and lemon. These three ingredients, according to Guaraní beliefs, bring happiness, drive away evil, and protect a person's health. Many Paraguayans believe that the month of August brings misfortune and bad luck to those who do not drink the concoction. Herb vendors and kiosks sell carrulim in specially prepared bottles in towns and villages each August 1.

The arts

      Paraguay has a distinctive musical tradition, especially of songs and ballads. Paraguayan songs, which tend to be languid and sentimental, were made popular by artists such as Los Paraguayos and Luis Alberto del Paraná in the 1950s. Typical music for dancing includes polkas (polka), courtship dances of Bohemian folk origin, and the galopa, a variant of which is the bottle dance, so called because the dancers balance bottles on their heads. José Asunción Flores (1904–72) was the country's most outstanding composer and harpist. He invented the guaranía, a musical style that features haunting and melancholic melodies that encapsulate the Paraguayan identity. Feliz Pérez Cardozo and Emiliano R. Fernández are also noted for their musical compositions.

      The number of books published in Paraguay increased significantly in the 1980s and particularly after the coup in 1989. Paraguay's most famous author is Augusto Roa Bastos (Roa Bastos, Augusto), whose novel Yo, el supremo (“I, the Supreme”; 1974), based on the life of the 19th-century dictator José Gaspar de Francia (Francia, José Gaspar Rodríguez de), won wide acclaim.

Cultural institutions

      Paraguay's principal cultural institutions are located in Asunción. There are learned societies concerned with Paraguayan and Guaraní history and culture, as well as various other societies and research institutes. The Normal School of Music, the Conservatory of Music, the National Academy of Fine Arts, and the Asunción Symphony Orchestra are major arts institutions. Paraguay has museums of ethnography, natural history, and military history, as well as art galleries with collections of the work of Paraguayan artists such as Carlos Colombino and Ricardo Migliorisi.

      Library services are centred in Asunción. The largest collections are in the National Library and Archive (1869) and in the private Our Lady of the Assumption Catholic University.

Sports and recreation

      Paraguayans are fond of sports. While football (soccer) is the most popular sport, fishing, tennis, basketball, and golf are also common. The annual Transchaco Rally, a three-day motor rally covering thousands of miles of dirt roads of the sparsely populated Paraguayan Chaco, is held in September. Paraguay made its Olympic debut at the 1968 Games in Mexico City.

Media and publishing

       censorship was widely practiced during the Stroessner years but was relaxed considerably under the Rodríguez regime. Virtually all newspapers and periodicals are published in Spanish. The Asunción daily newspapers include ABC Color (shut down during the Stroessner regime from 1984 to 1989, it resumed publication in 1989), El Popular, La Nación, and Ultima Hora.

      The National Telecommunications Administration oversees radio and television broadcasting. Radio Nacional is the government network, but there are many privately operated stations. Commercial television networks transmit from Asunción, Encarnación, and Ciudad del Este.

James E. Painter R. Andrew Nickson

History

Early history

      The Guaraní occupied the region between the Paraguay (Paraguay River) and Paraná (Paraná River) rivers long before the arrival of Europeans (about 2000–1000 BC). They were a Tupian-speaking people, and in most respects their customs resembled those of the other Indians in the tropical forests. The women cultivated corn (maize), cassava (manioc), and sweet potatoes, and the men hunted and fished. They were warlike, seminomadic people who lived in large thatched dwellings grouped in villages; each village was surrounded by a defensive palisade. In the 15th century raiders from the Gran Chaco region made frequent attacks upon Guaraní tribes. Crossing the Paraguay River, the Guaraní retaliated and subdued their enemies, carrying the conflict into the margins of the Inca empire. They were, therefore, the natural allies of early European explorers who were seeking short routes to the mineral wealth of Peru. Alejo García, making his way from the Brazilian coast in 1524, and Sebastian Cabot (Cabot, Sebastian), sailing up the Paraná in 1526, were the earliest of these explorers to reach the area.

Colonial (colonialism, Western) period

      The first colonial settlements were established by Domingo Martínez de Irala in the period 1536–56. The first Spanish colonists, unsuccessful in their search for gold, settled peacefully among the Guaraní in the region of Asunción, the present capital of Paraguay. These first settlers established their notorious “harems” of Guaraní women; their ethnically mixed descendants gradually grew into the rural population of modern Paraguay, which still considers itself to be Guaraní in custom and habit. With Asunción as his principal base, Irala laid the foundations of Paraguay and made it the centre of Spanish power in southeastern South America. Irala's colonization policy involved the delimitation of the boundary with Brazil through a line of forts against Portuguese expansion, the foundation of villages, the settlement of the Guaraní to provide food, labour, and soldiers, and extensive Guaraní-Spanish intermarriage. Rapidly, a national and fairly homogeneous amalgam of Indian and Spanish cultures came into being.

      For more than 150 years from early in the 17th century, Jesuit communal missions in the Paraná and Uruguay basins of southeastern Paraguay governed the lives of 150,000 Indians in 30 reducciones (reducción), or settlements. These were centres of religious conversion, agricultural and pastoral production, and manufacturing and trade; they served also as strategic outposts against Portuguese expansion from southern Brazil. Isolated from the heart of Paraguay, which centred on Asunción, the missions became an autonomous military, political, and economic “state within a state,” increasingly exciting the envy of the Spanish landowners in the Asunción area. In the period 1721–35 the latter waged a struggle to overthrow the Jesuit monopoly of Indian trade and labour. Unaided, the settlements also had to defend themselves against slave raiders from São Paulo and, in 1754–57, a combined Spanish-Portuguese attack that was designed to enforce a territorial partition of the mission settlements. Defiance of such powerful groups paved the way for the expulsion of the Jesuits in 1767. The settlements were abandoned, the Indians were absorbed by either the landed estates or the jungle, the settlements fell into ruin, and economic activity ceased.

      In 1776 the new Viceroyalty of the Río de la Plata (Río de la Plata, Viceroyalty of the) was created, with its capital in Buenos Aires. This effectively made Asunción and all of Paraguay dependent on Buenos Aires, thus ending the region's colonial dominance.

Struggle for independence

      As the power of Buenos Aires grew, the leaders of Paraguay began to resent the decline in their province's significance, and, although they had early challenged Spanish authority, they refused to accept the declaration of Argentine independence in 1810 as applying to Paraguay. Nor could an Argentine army under Gen. Manuel Belgrano (Belgrano, Manuel) enforce Paraguayan acceptance, as Paraguayan militia repulsed Belgrano's forces in 1811. Later, however, when the Spanish governor sought assistance from the Portuguese in defending the colony from further attacks from Buenos Aires, he underestimated the nationalistic spirit of the Paraguayans. Under the leadership of the militia captains Pedro Juan Cabellero and Fulgencio Yegros, they promptly deposed the governor and declared their independence on May 14, 1811.

Elman R. Service Gilbert James Butland John Hoyt Williams

Establishment of the republic

The Francia regime

      A governing junta was soon established, led by Yegros but in reality dominated by a civilian lawyer, José Gaspar Rodríguez de Francia (Francia, José Gaspar Rodríguez de). Francia proposed the idea of a confederation of equals to Buenos Aires. The city was hoping for eventual domination but settled for a vague military alliance, which was signed in October 1811. This constituted de facto recognition of Paraguayan independence, and, when Buenos Aires attempted to use the alliance to acquire Paraguayan troops for its own interprovincial quarrels, the accord became void. Buenos Aires's response was to blockade Paraguay. In the face of regional fragmentation, Buenos Aires sent Nicolás de Herrera to Asunción to frighten, bluff, or bribe Paraguay into a union of unequals. Francia responded by convening a congress, which on Oct. 12, 1813, formally declared Paraguay an independent republic and rejected further treaties with Buenos Aires. A consulate of two men, Yegros and Francia, was established to rule the republic for a year.

      At the end of that year, a new congress met and proclaimed Francia supreme dictator of the republic for a period of five years; in 1816 a third congress made him perpetual dictator, and his will was the law in Paraguay for an additional 24 years. El Supremo, as he was known, prohibited any political activity, stripped the church of its holdings and power, confiscated the wealth of the small Spanish elite, abolished the municipal government of Asunción, and generally isolated Paraguay from its rather hostile neighbours. In 1820 El Supremo found out about a plot to depose him and restore the native elite to power. Hundreds of arrests were made, and in the following year at least 68 men of the traditional Paraguayan aristocracy (including Fulgencio Yegros) were executed. Their wealth in land and slaves became part of the national patrimony, and well before Francia's death (1840) the state came to own a vast proportion of the country. With the borders sealed, Paraguay became of necessity almost self-sufficient; only a small, carefully regulated commerce was permitted with Argentina and Brazil. Uninvited foreigners were often held for years under loose arrest in the interior.

The start of modernization

      When Francia died, he left behind a quietly prosperous country that had adjusted well to what amounted to state socialism, but he also left a country of rustics with no political experience and a strong tradition of dictatorial rule. In 1841 a second consulate emerged from the chaos in the figures of a civilian, Carlos Antonio López (López, Carlos Antonio), and a soldier, Mariano Roque Alonso. It was soon clear that López was the true ruler of Paraguay, and in 1844 a congress named him president. The same congress promulgated a constitution, notable for the great powers accorded the president and the absence of the word liberty from its text. López devoted much of his two decades in power to opening the country slowly to the wider world and to modernization. Doing so provoked international crises, and it was not until after the fall of the Argentine dictator Juan Manuel de Rosas (Rosas, Juan Manuel de) in 1852 that Argentina recognized Paraguayan sovereignty and eased its stranglehold on the rivers leading to the sea.

Paraguay's conflicts with its neighbours

      While López was attempting to modernize Paraguay, he also had to attend to border crises with Brazil and Argentina. These crises convinced him that Paraguayan modernization should proceed along military avenues. Thus, hundreds of foreign engineers, medical workers, scientists, machinists, and advisers were put to work on military projects. López was threatened by a major Brazilian naval expedition on the Paraná River in 1855; in 1858 a large flotilla of the U.S. Navy appeared to force a solution to a complex diplomatic issue, but British war vessels captured and held for a time the flagship of the small Paraguayan navy. In most of these contretemps, López was forced to give in, and the consequent humiliation lent greater urgency to his desire to strengthen Paraguay's defenses. By the time of his death, in September 1862, he had created a major regional military machine. López, a cautious man, warned his eldest son, Francisco Solano López (López, Francisco Solano), who was to succeed him, not to use the new military might capriciously but to settle disputes through diplomacy and negotiation.

War of the Triple Alliance (Triple Alliance, War of the)

      Francisco Solano López (López, Francisco Solano) in 1862 was the inexperienced, spoiled son of an iron-willed dictator. He overestimated the military strength of his country and felt that Paraguay should have a larger voice in the affairs of the region. Thus, when Uruguay, wracked by civil war, was threatened with intervention by Brazil, López took an increasingly bellicose position. When Brazil ignored his warnings and ultimatums and invaded Uruguay in August 1864 to support a pro-Brazilian faction in the civil war, López decided to use the strength of his military machine. In November he ordered the capture of a Brazilian war steamer and sent units of his army and navy north to invade the Mato Grosso Plateau, simultaneously preparing a larger army corps to strike south to destroy the Brazilian army in Uruguay. When Argentina denied his request for transit of a Paraguayan army, he declared war on Argentina as well, in March 1865. In May, as Paraguayan troops were approaching, a puppet Uruguayan government signed the Treaty of the Triple Alliance with Brazil and Argentina, committing all three to the war against Paraguay.

      The Paraguayan force heading southward was destroyed at Uruguaiana, in Brazil, and a strike into northeast Argentina resulted in heavy Paraguayan casualties and the virtual destruction of López's fleet in 1865. Much of the rest of the war was fought in southwestern Paraguay, near and around Humaitá. In May 1866 López threw the elite of his army into suicidal attacks against allied forces at Tuyutí, losing almost 20,000 of his best men. Other lost battles in 1866–68, as well as widespread epidemics of Asiatic cholera, devastated the population of the country. In 1869 and 1870 the tragedy was completed as López, pursued by large allied forces, retreated through the interior of his country with a shattered army and thousands of civilian refugees, dragging famine, disease, and death in his wake. Perhaps by this point unhinged, he ordered the executions of hundreds of people, including his own two brothers, two brothers-in-law, and scores of his officers. Finally, on March 1, 1870, his last camp was attacked at Cerro Corá by Brazilian cavalry, and López died in combat. His country by then lay in ruins, with more than half of its former population dead. A Brazilian occupation army remained, further draining the country, until 1876. This Paraguayan War, or War of the Triple Alliance, was one of the bloodiest in Latin American history.

Reconstruction

      Under a liberal constitution promulgated in 1870, Paraguay began a painful reconstruction. Only the mutual jealousies of Brazil and Argentina prevented the country from losing much of its territory. As a result, Brazil gained no lands that it had not actually occupied before the war, and Argentina's claims to most of the Chaco were reduced considerably when, in arbitration, U.S. Pres. Rutherford B. Hayes (Hayes, Rutherford B.) decided one key boundary issue in 1878 in favour of Paraguay. When the army of occupation was removed in 1876, it left a crowd of Paraguayan politicians noted for their corruption and ambition. In 1887 Paraguay's two major political parties, the Liberal Party and the National Republican Association (Asociación Nacional Republicana; ANR), generally known as the Colorado Party, were born. The Colorados were in power from 1887 until a liberal revolt unseated them in 1904, and the Liberal Party, in their turn, dominated the presidency for the next 30 years.

The Chaco War (Chaco War)

      Paraguay's reconstruction was complicated by a dispute with Bolivia concerning boundaries in the Chaco. The dispute was exacerbated when, in the 1880s, Bolivia lost its seacoast in the War of the Pacific (Pacific, War of the) with Chile and, seeing the Chaco as a possible outlet to the sea via the Paraná River, began to penetrate it with soldiers and colonists. By the 1920s, armed clashes began to take place as Paraguay moved into the region in greater force. As Paraguay was frantically trying to arm itself, a Bolivian force stormed a Paraguayan fort on June 15, 1932, and the war began. The Paraguayan president, Eusebio Ayala, gave a military carte blanche to Gen. José Félix Estigarribia, who gradually pushed the Bolivians back until they were almost entirely ejected from the Chaco. Through foreign mediation, a cease-fire was attained on June 12, 1935, and a peace treaty was signed three years later, awarding Paraguay three-fourths of the Chaco.

      In February 1936, Ayala and Estigarribia were imprisoned following a military coup known as the Febrerista revolt, conducted by radical officers. The inept new government soon fell, however, and Estigarribia was elected president in 1939.

      On Sept. 7, 1940, before he could actually implement a new constitution that gave him great authoritarian powers, Estigarribia was killed in an air crash. He was replaced by Gen. Higinio Morínigo, a harsh opportunist, who immediately persecuted the Liberals and rewarded the Colorados. A revolt of Liberals and other groups in 1947 caused a civil war that again devastated the country. Morínigo was deposed by the Colorados themselves in 1948. In the next six years, Paraguay had six weak presidents, and then, in 1954, Gen. Alfredo Stroessner (Stroessner, Alfredo), supported by both the Colorados and the army, seized power.

The Stroessner (Stroessner, Alfredo) regime

      The authoritarian Stroessner, with aid from the United States and later Brazil, managed to stabilize one of the world's least stable currencies, attract foreign investment, and embark on large public works projects. Paraguayan isolation was broken down. However, harsh rule was not relaxed after 1960. Though elections on all levels were permitted, the Colorado Party never lost, and Stroessner was duly reelected every five years with a huge plurality. The church alone continued to object to the repressive aspects of the regime, such as the inhumane treatment of the Indian minority and censorship. Relations with the United States deteriorated throughout the 1970s, and U.S. aid was much reduced. Partly because of this, the Stroessner government aligned itself closely with the authoritarian regime in Brazil, which offered aid and political support. The two countries cooperated in the building of the immense Itaipú (Itaipú Dam) hydroelectric plant on their shared border. As a result of this project, the national economy briefly improved, but it took a downturn in the early 1980s, causing some protests against the Stroessner regime.

      The government showed little tolerance for opposition to its policies; most of the main opposition leaders were kept forcibly in exile. Such repression focused international attention on Paraguay for human rights violations, further hampering the country's foreign relations and intensifying economic stagnation. The aging Stroessner, who had been elected in 1983 for a seventh term, also had to deal with dissension within his own Colorado Party that pitted the traditionalist, or “moderate,” wing of the party against the “militant” wing. The former sought to open the political and economic system somewhat, whereas the latter favoured continuation of the policies of the Stroessner regime and wanted Gustavo Stroessner to succeed his father whenever he stepped down from office. Factional discord rocked the Colorado Party, resulting in a partial purge of the traditionalists in 1988, and it appeared briefly that the militants were firmly in control. The traditionalists, however, were simply lining up their forces for the inevitable conflict. On Feb. 3, 1989, Stroessner was overthrown in a coup led by his erstwhile top military commander, Gen. Andrés Rodríguez, who announced that democracy had come to Paraguay.

Democratic freedoms

      Elections were held on May 1, 1989, and Rodríguez was elected president (by a 74 percent plurality). The opposition parties had not had much time to organize for the electoral contest, and control of Congress remained with the Colorado Party. The party also remained in control of the judiciary, and Rodríguez's cabinet included a number of military officers. Moreover, there was some concern over the fact that Rodríguez had never changed his active-duty military status. Nonetheless, a new constitution went into effect on June 20, 1992, and the president adopted certain democratic measures. He declared freedom of the press, legalized all political parties, repealed a number of repressive laws, ratified the human rights treaties of the United Nations and Organization of American States (American States, Organization of), and freed the country's remaining political prisoners.

      Despite the establishment of democratic liberties, the armed forces remained a key power in Paraguay. Army Chief Gen. Lino Oviedo soon emerged as a major figure. He engineered the selection of Juan Carlos Wasmosy as the candidate of the Colorado Party in the 1993 presidential elections; Wasmosy won the election and became Paraguay's first civilian president since 1954. But Oviedo and Wasmosy had a subsequent falling out, leading to a rebellion in April 1996, when only strong diplomatic pressure was able to avert a military coup. Oviedo retired from active service and reemerged as a Colorado Party front-runner in the 1998 presidential race, but Wasmosy retaliated by arresting Oviedo on charges arising from his 1996 coup attempt. Oviedo's vice presidential running mate, Raúl Cubas Grau, replaced Oviedo as the party candidate and won the presidency for the Colorado Party with a convincing majority.

      Three days after assuming office, in August 1998, President Cubas released Oviedo from jail and refused to return Oviedo to confinement even after the Supreme Court ruled his actions unconstitutional. A political impasse was broken following the assassination of Vice President Luís María Argaña, on March 23, 1999. Fearing military intervention, thousands of student demonstrators protested outside the National Congress building in Asunción, calling for the arrest of Oviedo, who was widely suspected of being involved in the assassination. Later that week, Oviedo supporters fired on the demonstrators, killing eight and wounding many. But this provocation failed to disperse the crowds. President Cubas resigned and was granted asylum in Brazil; meanwhile, Oviedo fled to Argentina.

      At the end of March, Luis González Macchi, former head of the Senate, was sworn in as president to head a new “government of national unity,” comprising members of all three major political parties. Under strong external pressure from the United States and the International Monetary Fund, the new government announced its commitment to reform civil service, to privatize industry, and to mandate greater civilian control over Paraguay's armed forces. But Colorado Party supporters of the assassinated vice president and former members of the Stroessner regime occupied key positions in the new government. They remained wedded to a corporativist style of politics that was opposed to fundamental reform.

Paraguay in the 21st century

      After a decade of stagnation, the Paraguayan economy revived, spurred by rapid growth in soybean production. Indeed, Paraguay was one of the world's largest exporters of soybeans at the beginning of the 21st century. However, despite faster economic growth, unemployment and crime rates remained high as the government failed to address the urgent need for land reform and industrialization. There was growing resentment at Paraguay's subordinate role within the region, including calls to leave Mercosur. Also of concern were the terms of the hydropower Itaipú Treaty with Brazil (1973), which many Paraguayans saw as inequitable. Gonzalez's term in office was scarred by corruption charges, and on April 27, 2003, Colorado Party candidate Nicanor Duarte Frutos won the presidential election, promising to fight corruption in his party and in his country. During his presidential term Duarte removed six judges from the Supreme Court who were suspected of corruption, introduced tax reforms, and pursued efficient macroeconomic policies. In June 2004 Oviedo returned from exile and was imprisoned for his 1996 convictions; he was paroled in 2007. In the historic 2008 presidential election, ex-bishop Fernando Lugo of the centre-left coalition Patriotic Alliance for Change (Alianza Patriótica para el Cambio; APC) defeated Blanca Ovelar of the Colorado Party, ending that party's 62 years of continuous rule.

John Hoyt Williams R. Andrew Nickson

Additional Reading

General works

The most comprehensive bibliographies are David Lewis Jones, Paraguay (1979); and R. Andrew Nickson (compiler), Paraguay (1987); and R. Andrew Nickson, Historical Dictionary of Paraguay, 2nd ed., rev., enlarged, and updated (1993). General surveys of Paraguayan history, economics, and politics include W.H. Koebel, Paraguay (1917), on early 20th-century Paraguay; Philip Raine, Paraguay (1956), on the eve of the Stroessner dictatorship; and Paul H. Lewis, Socialism, Liberalism, and Dictatorship in Paraguay (1982). Social conditions and culture are dealt with in Riordan Roett and Richard Scott Sacks, Paraguay: The Personalist Legacy (1991). Martin Dobrizhoffer, An Account of the Abipones, an Equestrian People of Paraguay, 3 vol. (1822, reprinted 3 vol. in 1, 1970; originally published in Latin, 3 vol., 1784), provides one of the earliest accounts of the indigenous peoples of Paraguay. George Pendle, Paraguay: A Riverside Nation, 3rd ed. (1967), is brief but informative. Gordon Meyer, The River and the People (1965), offers a perceptive insight into Paraguayan culture. Philip Caraman, The Lost Paradise, 1607–1768 (1975, reissued 1990), offers a popular account of the Jesuit experience in Paraguay.Joseph Pincus, The Economy of Paraguay (1968), is a good general survey of the economy. J.M.G. Kleinpenning, Man and Land in Paraguay (1987), discusses agriculture and land-tenure patterns through the Stroessner era.

History

A general historical treatment of Paraguay is Harris Gaylord Warren, Paraguay: An Informal History (1949, reprinted 1982), with a useful bibliography. Barbara Ganson, The Guaraní Under Spanish Rule in the Rio de la Plata (2003), offers a revisionist view. The Francia period is addressed in Richard Alan White, Paraguay's Autonomous Revolution, 1810–1840 (1978); and John Hoyt Williams, The Rise and Fall of the Paraguayan Republic, 1800–1870 (1979), which also discusses the López dictators. The role of foreign contracted workers during Carlos Antonio López's modernization program is covered in Josefina Plá, The British in Paraguay, 1850–1870 (1976). Thomas Whigham, The Politics of River Trade: Tradition and Development in the Upper Plata, 1780–1870 (1991), analyzes how Paraguayan politics affect river trade during three historical periods.The complex genesis of the War of the Triple Alliance is treated in Pelham Horton Box, The Origins of the Paraguayan War, 2 vol. (1929, reissued in 1 vol., 1967). Gilbert Phelps, Tragedy of Paraguay (1975), offers a chronicle of the war years. The immediate postwar era is detailed in Harris Gaylord Warren and Katherine E. Warren, Paraguay and the Triple Alliance: The Postwar Decade, 1869–1878 (1978), and Rebirth of the Paraguayan Republic: The First Colorado Era, 1878–1904 (1985). The long and turbulent interwar period is addressed by Paul H. Lewis, Political Parties and Generations in Paraguay's Liberal Era, 1869–1940 (1993). Coverage of the Chaco War can be found in David H. Zook, Jr., The Conduct of the Chaco War (1960); and the Chaco War peace negotiations are dealt with in Leslie B. Rout, Jr., Politics of the Chaco Peace Conference, 1935–39 (1970). Later treatments of Paraguayan history include Michael Grow, The Good Neighbor Policy and Authoritarianism in Paraguay: United States Economic Expansion and Great-Power Rivalry in Latin America During World War II (1981); and Paul H. Lewis, Paraguay Under Stroessner (1980). Peter Lambert and R. Andrew Nickson (eds.), The Transition to Democracy in Paraguay (1997), provides a survey of the economics and political challenges in the immediate post-Stroessner period.R. Andrew Nickson

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