PARAGUAY

OVERVIEW:
The Republic of Paraguay is a landlocked nation in South America. It lies on both banks of the Paraguay River, bordering Argentina to the south and southwest, Brazil to the northeast, and Bolivia to the northwest. The name of the country means “water that goes to the ocean,” derived from the Guarani words pará (“ocean”), gua (“to/from”), and y (“water”). The expression in Guarani often refers solely to Asunción, but in Spanish refers to the entire country.
Paraguay is a country of fascinating contrasts. It’s rustic and sophisticated. It’s extremely poor and obscenely wealthy. It boasts exotic natural reserves and massive man-made dams. It is a place where horses and carts pull up by Mercedes Benz cars, artisans’ workshops near glitzy shopping centers and Jesuit ruins in rural villages near Encarnación are just a few kilometers from sophisticated colonial towns like Asunción.
Steamy subtropical rainforests with metallic butterflies contrast with the dry and wild frontier of Northern Paraguay & the Chaco. Here, many Mennonites have created their haven, living alongside some of the country’s many indigenous groups, while the European influence is particularly strong in the laid-back towns like Filadelfia and the more chaotic capital.

BACKGROUND:
Paraguay achieved its independence from Spain in 1811.  In the disastrous War of the Triple Alliance (1865-70) – between Paraguay and Argentina, Brazil, and Uruguay – Paraguay lost two-thirds of all adult males and much of its territory.

The country stagnated economically for the next half century. Following the Chaco War of 1932-35 with Bolivia, Paraguay gained a large part of the Chaco lowland region. The 35-year military dictatorship of Alfredo Stroessner ended in 1989, and, despite a marked increase in political infighting in recent years, Paraguay has held relatively free and regular presidential elections since then.

ECONOMY:
Paraguay has a predominantly agricultural economy, with a struggling commercial sector. There is a large subsistence sector, including sizable urban unemployment and underemployment, and a large underground re-export sector.
The country has vast hydroelectric resources, including the world’s second-largest hydroelectric generation facility built and operated jointly with Brazil (Itaipu Dam), but it lacks significant mineral or petroleum resources.
The government welcomes foreign investment in principle and accords national treatment to foreign investors. The economy is dependent on exports of soybeans, cotton, grains, cattle, timber, and sugar; electricity generation, and to a decreasing degree on re-exporting to Brazil and Argentina products made elsewhere.
It is, therefore, vulnerable to the vagaries of weather and to the fortunes of the Argentine and Brazilian economies. Given the importance of the informal sector, accurate economic measures are difficult to obtain.

AGRICULTURE & COMMERCE:
Agricultural activities, most of which are for export, represent about 16% of GDP and employ about one-quarter of the work force.
More than 250,000 families depend on subsistence farming activities and maintain marginal ties to the larger productive sector of the economy. In addition to the commercial sector with retail, banking, and professional services, there is significant activity involving the import of goods from Asia and the United States for re-export to neighboring countries.
The underground economy, which is not included in the national accounts, may be almost twice the size of the formal economy in size, although greater enforcement efforts by the tax administration and customs are having an impact on the informal sector.

DEFENSE:
The constitution designates the President as Commander in Chief of the armed forces. Military service is compulsory, and all 18-year-old males–and 17-year-olds in the year of their 18th birthday–are eligible to serve for 1 year on active duty.
However, the 1992 constitution allows for conscientious objection. Of the three services, the army has the majority of personnel, resources, and influence. With about 7,000 personnel, it is organized into three corps, with six infantry divisions and three cavalry divisions. The military has two primary functions: national defense (including internal order) and engaging in civic action programmes as directed by the President.
The navy consists of approximately 2,000 personnel and in addition to its fleet, has an aviation section, a prefecture (river police), and a contingent of marines (naval infantry). The air force, the smallest of the services, has approximately 1,200 personnel.

FOREIGN RELATIONS:
Paraguay is a member of the United Nations and several of its specialized agencies. It also belongs to the Organization of American States, the Latin American Integration Association (ALADI), the Rio Group, INTERPOL, and MERCOSUR (the Southern Cone Common Market). Paraguay is closely aligned with its MERCOSUR partners on many political, economic, and social issues.
It is the only country in South America that recognizes Taiwan and not the People’s Republic of China.

PRESIDENT:  Fernando Lugo
Paraguayan President Fernando Lugo, 59, a former Roman Catholic bishop, has been diagnosed with cancer.
Just last month he underwent emergency treatment in a Brazilian hospital. The moderate leftist, who took office two years ago, was diagnosed in August with non-Hodgkin’s lymphoma, a cancer that originates in the lymphatic system.
Lugo’s presidency has been clouded by several paternity scandals. He has been under pressure this year from violence blamed on a small armed group operating in remote northern areas of the poor, soy-exporting country.

FACTS:
** Full name: Republic of Paraguay
** Population: 6,375,830 (July 2010 est.)
** Capital: Asuncion
** Size in area: 406,750 km²
** Languages: Spanish (language of business and government), Guarani (spoken and understood by 90% of the population).
** Labour: 2,150,000 (33%)
** Overall Growth: 2.51
** Religion: Roman Catholic 90%, Mennonite, and other Protestant
** Cell Phones: 1,770,300
** Landlines: 273,200
** Internet: 120,000