PARAGUAY

Republic of Paraguay
República del Paraguay

CAPITAL: Asunción

FLAG: The national flag, officially adopted in 1842, is a tricolor of red, white, and blue horizontal stripes. The national coat of arms appears in the center of the white stripe on the obverse, and the Treasury seal in the same position on the reverse.

ANTHEM: Himno Nacional, beginning "Paraguayos, república o muerte" ("Paraguayans, republic or death").

MONETARY UNIT: The guaraní (g) is a paper currency of 100 céntimos. There are notes of 1, 5, 10, 50, 100, 500, 1,000, 5,000, and 10,000 guaraníes. g1 = $0.00016 (or $1 = g6,158.47) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; San Blas Day, 3 February; National Defense Day, 1 March; Labor Day, 1 May; Independence Days, 14–15 May; Peace Day, 12 June; Founding of Asunción, 15 August; Constitution Day, 25 August; Victory Day (Battle of Boquerón), 29 September; Columbus Day, 12 October; All Saints' Day, 1 November; Our Lady of Caacupé, 8 December; Christmas, 25 December. Movable religious holidays are Holy Thursday, Good Friday, and Corpus Christi.

TIME: 8 am = noon GMT.

LOCATION, SIZE, AND EXTENT

One of South America's two landlocked countries, Paraguay has a total area of 406,750 sq km (157,047 sq mi). Comparatively, the area occupied by Paraguay is slightly smaller than the state of California. The western 246,925 sq km (95,338 sq mi) of the country constitute a dry, sparsely populated region known as the Chaco, while the remaining 159,827 sq km (61,709 sq mi) lie in the more verdant east. Paraguay extends 992 km (616 mi) sse–nnw and 491 km (305 mi) ene–wsw. Bounded on the ne and e by Brazil, on the se, s, and w by Argentina, and on the nw and n by Bolivia, Paraguay has a total boundary length of 3,920 km (2,436 mi).

Paraguay's capital city, Asunción, is located in the southwestern part of the country.

TOPOGRAPHY

The eastern part of Paraguay contains luxuriant hills, meadows, and forests. The western three-fifths is a waterless prairie covered with dry grass and sparsely dotted with shadeless trees. The southward-flowing Paraguay River, the nation's most important water-way, divides the two sections; this river, which for a long time was Paraguay's principal contact with the outside world, rises in south-western Brazil and extends for a total length of 2,549 km (1,584 mi). The Pilcomayo River, which rises in the mountains of southern Bolivia and extends about 1,600 km (1,000 mi), flows south-east, forming the southwestern border between Argentina and Paraguay, and joins the Paraguay near Asunción.

The eastern sector of Paraguay comprises the western part of the great Paraná Plateau, varying from 300 to 610 m (1,000 to 2,000 ft) in altitude. The Paraná River—called Upper (Alto) Paraná in Paraguay—flows southward from south-central Brazil through the center of the plateau, dropping in the Guairá Falls at the easternmost point in the Paraguay-Brazil frontier. Between the Guairá Falls and the confluence with the Paraguay River at the southwestern tip of the country, the Paraná passes through a deep canyon that forms the eastern and southern frontier with Argentina.

Just west of the plateau is an area of gently rounded hills descending to the low plains that stretch westward to the Paraguay River. These hills occur in two series, one extending northwest-ward to the Paraguay River just north of Concepción, and the other meeting the river at Asunción. The remaining territory east of the Paraguay River is composed of lowland plain, much of it subject to annual floods.

West of the Paraguay River is the Chaco, part of the larger Gran Chaco, which includes portions of Argentina, Bolivia, and Brazil. The Gran Chaco, a vast alluvial plain composed of unconsolidated sands and clays, is crossed by the Pilcomayo and Bermejo rivers, but over much of the area there are no surface streams. The water table, however, is only a few feet below the surface, and patches of alkali frequently appear during the long dry season. In many places the groundwater is salty.

CLIMATE

Two-thirds of Paraguay is within the temperate zone, one-third in the tropical zone. The climate varies from mild to subtropical. During the winter months (roughly May through August), the temperature range is 16–21°c (60–70°f); nights are occasionally colder. During the summer (October through March), the temperature range is 25–38°c (77–100°f), with extremes of 43°c (109°f) and above in the west. Paraguay is open to dry, cold polar winds from the south and to hot, humid north winds from southwestern Brazil; sudden sharp drops in temperatures are not uncommon. Rainfall averages about 152 cm (60 in) a year along the eastern frontier with Brazil, gradually diminishing toward the west to an average of 127 cm (50 in) along the Paraguay River and 76 cm (30 in) in the Chaco. Asunción has an annual average of about 130 cm (50 in), which is moderate for its latitude. There is no definite rainy season, although violent thunderstorms sometimes occur in the summer.

FLORA AND FAUNA

The vegetation, like the rainfall, is concentrated in the Paraná Plateau and diminishes toward the west. Tall broadleaf trees, some evergreen and some deciduous, cover eastern Paraguay, thinning out on the red sandy soils of the hilly perimeter. Scrub woodland and palm also dot the sandy plateau areas. Between the semideciduous forest and the Paraguay River, the vegetation is mostly the savanna type mixed with scattered palms. In contrast, the Chaco supports primarily deciduous scrub woodlands, luxuriant along the Paraguay River but becoming more and more xerophytic as the rainfall decreases toward the west.

The eastern forests abound in hardwoods, including indigenous varieties such as urunday, cedron, curupay, and lapacho. Softwoods are scarce. In the northern Chaco, along the Paraguay River, there are scattered stands of quebracho and many large, spreading trees, such as the ceiba. Medicinal herbs, shrubs, and trees abound, as well as some dyewoods. Yerba maté, a holly popularly used in tea, grows wild in the northeast.

Animals found in Paraguay include the jaguar (especially numerous in the Chaco), wild boar, capybara, deer, armadillo, anteater, fox, brown wolf, carpincho, and tapir. Paraguay abounds with crocodiles along its watercourses, and the boa constrictor thrives in the west. The carnivorous piranha is common.

As of 2002, there were at least 305 species of mammals, 233 species of birds, and over 7,800 species of plants throughout the country.

ENVIRONMENT

Agencies responsible for environmental protection include the National Environmental Health Service, the Ministry of Public Health, and the Ministry of Public Works and Communications.

Nearly all forests are privately owned and little was done to develop a national forest policy until the establishment in 1973 of the National Forest Service. Paraguay's forests are currently threatened by the expansion of agriculture. At most recent estimate, about a third of the nation's forest and woodland area has been lost. The absence of trees contributes to the loss of soil through erosion.

Water pollution is also a problem. Its sources include industrial pollutants and sewage. The nation has 94 cu km of renewable water resources with 78% of the annual withdrawal used to support farming and 7% used for industrial purposes. Only about 62% of the rural people have access to improved water sources. Some of Paraguay's cities have no facilities for waste collection.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 11 types of mammals, 27 species of birds, 2 types of reptiles, and 10 species of plants. Threatened species include the black-fronted piping guan, black caiman, spectacled caiman, and broad-nosed caiman. The glaucous macaw has become extinct.

POPULATION

The population of Paraguay in 2005 was estimated by the United Nations (UN) at 6,158,000, which placed it at number 100 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 32% of the population under 15 years of age. There were 102 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 1.7%, a rate the government viewed as too high. The projected population for the year 2025 was 8,565,000. The overall population density was 15 per sq km (39 per sq mi), but over 98% of the population is located in the eastern two-fifths of the country; the vast western Chaco region is virtually uninhabited.

The UN estimated that 54% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 3.25%. The capital city, Asunción, had a population of 1,639,000 in that year. Other leading cities and their estimated populations include Ciudad del Este, 239,000; Pedro Juan Encarnación, 72,300; Caballero, 66,400; Concepción, 62,000; and Pilar, 26,352.

MIGRATION

Emigration was a problem historically for Paraguay. During 1955–70, some 650,000 Paraguayans emigrated, mainly to Argentina, Uruguay, or Brazil. Much of the labor force of agricultural regions in Argentine border provinces is made up of Paraguayan nationals. The greatest exodus occurred after the 1947 civil war, but in the 1960s there were new waves of political emigration.

Immigration to Paraguay was limited to a few thousand Europeans during the 19th century. A major attempt by the Paraguayan government to encourage new settlers led to negotiations with Japan in 1959 for the immigration of 85,000 Japanese by 1990, but only about 8,000 arrived. An immigration agreement was signed with the Republic of Korea (ROK) in 1966. In 1985, the immigrant population totaled 199,500; the leading immigrant groups were Germans, Japanese, Koreans, Chinese, Brazilians, and Argentines. It was believed, however, that the actual number of Brazilians was 300,000–350,000. The number of migrants residing in Paraguay in 2000 was 203,000. The net migration rate in 2005 was an estimated -0.08 migrants per 1,000 population. Worker remittances in 2004 amounted to $506 million. The government views the migration levels as satisfactory.

ETHNIC GROUPS

About 95% of the population is mestizo, principally a mixture of Spanish and Guaraní Amerindian. The others are pure Amerindian (1–3%), black, or of European or Asian immigrant stock. The Guaraní Amerindians, belonging to the Tupi-Guaraní linguistic group, had spread throughout a large area of South America east of the Andes before the Spaniards arrived. Within Paraguay, extensive intermarriage between the races resulted in almost complete assimilation.

LANGUAGES

Paraguay is a bilingual nation. Spanish, the dominant language, is taught in the schools and is spoken by slightly more than half of the people. However, the great majority of Paraguayans speak Guaraní, an Amerindian language that evolved from the southern dialect of the Tupi-Guaraní group. It is also the language of widely esteemed literature, drama, and popular music. Both Spanish and Guaraní are official languages.

RELIGIONS

Roman Catholicism is the dominant religion, accounting for about 90% of the total population. The remaining 10% consisted of mainline Protestant, evangelical Christian, Jewish, Mormon, Muslim, and Baha'i groups. There are also substantial Mennonite communities, whose practitioners originally came to the country in several waves between 1880 and 1950 in order to avoid religious persecution.

The constitution provides for freedom of conscience and recognizes no official religion. Religious groups must register through the Ministry of Education and Culture. Certain Catholic holidays are recognized as national holidays.

TRANSPORTATION

Inadequate transportation facilities have been a major impediment to Paraguay's development. For a long time, some 3,100 km (1,925 mi) of domestic waterways provided the chief means of transportation, with most vessels owned by Argentine interests. Hampered by the high costs and slow service of Argentine riverboats transporting cargo to and from Buenos Aires, the Paraguayan government put its own fleet of riverboats in operation. This remedy, however, did not solve the underlying problems of Paraguayan transport. Drought conditions frequently affect navigation, and while the Paraguay is open to river traffic as far as Concepción (about 290 km/180 mi north of Asunción), passage is sometimes hazardous to vessels of even medium draft. The inland waterways and the Río de la Plata handle more than half of Paraguay's foreign trade with Argentina, Brazil, Chile, Europe, Japan, and the United States.

Asunción, the chief port, and Concepción can accommodate oceangoing vessels. In 2005, Paraguay had 21 merchant vessels of 1,000 GRT or more, totaling 31,667 GRT. In addition, Paraguay has been given free port privileges at Santos and Paranaguá, Brazil. More than 90% of Paraguay's foreign trade passes to Asunción through ports in Argentina and Uruguay.

Road construction is another critical focus of development. In 2001, highways totaled an estimated 29,901 km (18,580 mi). Of these roads, however, only 3,067 km (1,906 mi) were paved. Two major road projects of the 1960s were the Friendship Bridge on the Brazilian border in the Iguaçu Falls area, inaugurated in 1961, and the 770-km (480-mi) all-weather Trans-Chaco Road, which extends from Asunción to Bolivia. The Friendship Bridge permits highway travel from Asunción to the Brazilian Atlantic port of Paranaguá. A bridge over the Paraguay River, linking the western and eastern parts of the country, was inaugurated in 1978. All-weather roads connecting Asunción with Buenos Aires and Puerto Presidente Stroessner with Paranaguá have also been completed. In 2003, there were 81,837 passenger cars and 80,400 commercial vehicles in use.

In 1961, the 441-km (274-mi) British-owned Paraguayan Central Railroad was sold to Paraguay for $560,000. It was subsequently renamed Ferrocarril Presidente Carlos Antonio López Railroad. There is a direct line between Asunción and Buenos Aires. Altogether as of 2004 there were some 441 km (274 mi) of standard gauge trackage, excluding narrow gauge industrial lines in the Chaco.

In 2004, there were an estimated 878 airports and airfields, only 12 of which had paved runways as of 2005. S. Pettirossi is the principal airport at Asunción. Paraguayan Air Lines (Líneas Aéreas Paraguayas—LAP) provides both domestic and international service. Three carriers provide domestic service. In 2003, about 313,000 passengers were carried on scheduled domestic and international airline flights.

HISTORY

The original inhabitants of present-day Paraguay were Guaraní Amerindians of the Tupi-Guaraní language family. As many as 150,000 Amerindians may have been living in Paraguay at the time of the earliest European contacts. The first European known to have explored Paraguay was the Italian Sebastian Cabot, sailing from 1526 to 1530 in the service of Spain. The first permanent Spanish settlement, Nuestra Señora de la Asunción (Our Lady of the Assumption, present-day Asunción), was founded at the confluence of the Paraguay and Pilcomayo rivers on Assumption Day, 15 August 1537.

Paraguay's next two centuries were dominated by Jesuit missionaries, whose efforts to protect the Amerindians from Portuguese slave traders and Spanish colonists resulted in one of the most remarkable social experiments in the New World. Shortly after the founding of Asunción, missionary efforts began. The priests organized Guaraní families in mission villages (reducciones ) designed as self-sufficient communes. Amerindians were taught trades, improved methods of cultivation, and the fine arts, as well as religion. Above all, they were protected from exploitation by the Spanish colonists. As the settlements prospered and grew in number to around 30 (with over 100,000 Amerindians), the jealousy of the colonists sparked a campaign to discredit the Jesuits. Eventually, the king of Spain became convinced that the order was trying to set up a private kingdom in the New World, and in 1767, he expelled the Jesuits from the New World. Once they had left, the reducciones disappeared. As for the Spanish colony at Asunción, it dominated the area of the Río de la Plata throughout this period. However, in 1776, when Buenos Aires became the capital of the new viceroyalty of La Plata, Asunción was reduced to an outpost.

In achieving independence, Paraguay first had to fight the forces of Argentina. Buenos Aires called on Paraguay in 1810 to follow its lead in a virtual declaration of independence. Paraguay declared independence from Spain but rejected the leadership of Buenos Aires. An Argentine expedition was decisively defeated, and Paraguay completed its move toward independence by deposing the last of its royal governors in 1811.

Since then, Paraguay has been dominated by dictatorships or near-dictatorships. The first and most famous of the dictators was José Gaspar Rodríguez de Francia (known as "El Supremo"), originally a member of the five-man junta elected in 1811 to govern the newly independent nation. He was granted full dictatorial powers for three years in 1814 and thereafter had the term extended for life. Francia attempted to cut Paraguay off from all contact with the outside world. Commerce was suspended, foreigners were expelled, relations with the papacy were broken off, and an anticlerical campaign was begun. All criticism was stifled, and a widespread spy network was developed. However, at the same time, Francia was honest and tireless in his devotion to his personal concept of the country's welfare. Francia governed until his death in 1840. Today, he is regarded as Paraguay's "founding father."

The next dictator was Carlos Antonio López. López loosened the ties of dictatorship only slightly, but reversed Francia's paranoid isolationism. He reestablished communications with the outside world and normalized relations with the papacy. López encouraged road and railway building, improved education some-what, and became the largest landowner and the richest man in Paraguay. He made his son Francisco Solano López commander-in-chief of the army, thereby ensuring the younger López's succession to power in 1862, when the elder López died.

During his dictatorship, Francisco Solano López provoked quarrels with Argentina, Brazil, and Uruguay, who allied and attacked Paraguay. The War of the Triple Alliance (1865–70), sometimes called the Paraguayan War, was the bloodiest in Latin American history. López, who fancied himself a Latin Napoleon, drafted virtually every male in Paraguay over the age of 12, with no upper age limit, and insisted that his troops never surrender. The war was a disaster for Paraguay, which lost two-thirds of all its adult males, including López himself. Paraguay's population fell from about 600,000 to about 250,000. The war also cost Paraguay 142,000 sq km (55,000 sq mi) of territory, its economic well-being, and its pride.

For the next 50 years, Paraguay stagnated economically. The male population was replaced by an influx of immigrants from Italy, Spain, Germany, and Argentina. Politically, there was a succession of leaders, alternating between the Colorado and Liberal parties. Then, a long-smoldering feud with Bolivia broke into open warfare (1932–35) after oil was discovered in the Chaco, a desolate area known as the "green hell." Although outnumbered three-to-one, the Paraguayans had higher morale, were brilliantly led, and were better adapted to the climate of the region. Moreover, they regarded the conflict as a national undertaking to avenge the defeat of 1870. Paraguayans conquered three-fourths of the disputed territory, most of which they retained following the peace settlement of 1938.

Although President Eusebio Ayala emerged victorious from the Chaco War, he did not last long. The war produced a set of heroes, all of whom had great ambitions. One such man, Col. Rafael Franco, took power in February 1936. In 1939, after two more coups, Gen. José Felix Estigarribía, commander-in-chief during the Chaco War, was elected president. Estigarribía was killed in an airplane crash only a year later, and Gen. Higinio Morínigo, the minister of war, was appointed president by the cabinet. Through World War II, Morínigo received large amounts of aid from the United States, even though he allowed widespread Axis activity in the country. Meanwhile, he dealt harshly with domestic critics.

Morínigo retired in 1948, but was unable to find a successor. After a one-year period of instability, Federico Chávez seized control, and ruled from 1949 until 1954. In May 1954, Gen. Alfredo Stroessner, commander-in-chief of the armed forces, used his cavalry to seize power. He had himself elected president as the candidate of the Colorado Party, and then was reelected in another single-slate election in 1958, although he did permit the Liberal Party to hold its first convention in many years. With help from the United States, he brought financial stability to an economy racked by runaway inflation, but he used terrorist methods in silencing all opposition. Exiles who invaded Paraguay simultaneously from Argentina and Brazil in December 1959 were easily routed. Six other small invasions during 1960 were also repulsed. Stroessner won a third presidential term in February 1963, despite the constitutional stipulation that a president could be reelected only once. In August 1967, a constitutional convention approved a new governing document that not only provided for a bicameral legislature but also established the legal means for Stroessner to run for reelection. Stroessner did so in 1968, 1973, 1978, 1983, and 1988, all with only token opposition permitted. On 17 September 1980, the exiled former dictator of Nicaragua, Anastasio Somoza Debayle, who had been granted asylum by the Stroessner government, was assassinated in Asunción, and Paraguay broke off relations with Nicaragua.

During the 1980s, Stroessner relaxed his hold on Paraguay. The state of siege, which had been renewed every three months since 1959 (with a partial suspension from February 1978 to September 1980), was allowed to lapse in April 1987. Opponents of the regime gave credit for the ending of the state of siege to the United States, which had kept pressure on the Stroessner administration. However, allegations of widespread human rights abuses continued to be made. In April 1987, Domingo Laíno, an opposition leader exiled in December 1982 who had tried unsuccessfully to enter the country on five earlier occasions, was allowed to return to Paraguay. Part of this liberalization may have been in response to mounting criticism from the Roman Catholic Church, whose position moved closer to that of the various dissident groups.

On 3 February 1989 Stroessner's 35-year dictatorship came to an end at the hand of Gen. Andrés Rodríguez, second in command of the Paraguayan military. Immediately after the coup, Rodríguez announced that elections would be held in May. With only three months to prepare, little opposition beyond Domingo Laíno was mounted, and Rodríguez won easily with 75.8% of the vote. There followed an immediate easing of restrictions on free speech and organization. Labor unions were recognized and opposition parties allowed to operate freely. Rodríguez promised and delivered elections in 1993. In those elections, Colorado candidate Juan Carlos Wasmosy was elected to the presidency, the first time a civilian had become president through popular election since 1954. Paraguay had experienced an unprecedented transfer of political power through a constitution from one elected government to another. Wasmosy began to push for economic liberalization, including the sale of state-owned enterprises, but it was unclear whether the military was willing to support such measures.

In April 1996, General Lino Cesar Oviedo staged a brief rebellion when asked by Wasmosy to resign his post as army commander, but a coup was averted and Oviedo was eventually acquitted of charges of armed insurrection. Oviedo, now a civilian, has become the leader of an opposing faction of Wasmosy's Colorado Party. Other than Oviedo's short-lived rebellion, however, no serious threats to Wasmosy's economic and political reforms have been offered. In fact, the more democratic environment was tested and proven in 1993 by the first general labor strike in 35 years. Although the government responded with some force to this first strike, subsequent strikes have been met with a much gentler governmental hand. Unfortunately, the economy itself has been slow to respond to the new reforms. In the 1990s, Paraguay experienced 0% economic growth.

In the 1998 presidential elections, Raúl Cubas of the Colorado Party became president with 55.3% of the vote, but a year later he had to resign after the assassination of Vice President Luis Argaña. Cubas was closely associated with General Oviedo and the latter was linked to the political assassination. Upon Cubas' resignation, the president of the Senate, Luis González Macchi, was sworn in as president. Cubas sought exile in Brazil and Oviedo sought refugee in Argentina. González was correctly considered as a caretaker until new elections were held in 2003.

On 27 April 2003, Colorado Party candidate Oscar Duarte won the presidential election with 37.1% of the vote. Duarte promised to fight corruption in his party and the country. He sought to distance himself from former Colorado Party leaders and sought to portray himself as a modernizer and democratizing leader that would open Paraguay to the world economy. Yet, his tenure had been rather modest in accomplishments. Duarte's party commanded support from 37 of the 80 members of the Chamber of Deputies and from 16 of the 45 members of the Senate. Thus, in order to advance his legislative initiative, he had to seek support from minority parties. Because he promised to fight corruption and promote transparency, it was difficult to bargain with corruption-prone parties. Moreover, because he failed to command majority control of congress, many of his anticorruption initiatives failed to materialize. The economy grew due primarily to a strong growth in Brazil, Paraguay's most important trade partner. Yet, government reform did not follow suit. The country remained somewhat isolated from the world and failed to seize trade opportunities. Poverty remained high and despite the good intentions, Duarte's tenure did not deliver on many of the promises made during the campaign. Yet Duarte helped consolidate democratic order and brought about stability which was threatened under the Cubas government.

GOVERNMENT

Under the constitution of 25 August 1967, Paraguay was a republic, with substantial powers conferred on the executive. The Constituent Assembly revised the constitution on 20 June 1992, but kept most of the structure from the previous document, while limiting many of the powers Stroessner used during his administration. The judicial system was also slated for overhaul.

The president is directly elected for a five-year term. The president is commander-in-chief of the military forces and conducts foreign relations. He appoints the 11-member cabinet, most administrators, and justices of the Supreme Court. He is advised by the Council of State, consisting of the cabinet ministers, the president of the National University, the archbishop of Asunción, the president of the Central Bank, and representatives of other sectors and the military.

The 1967 constitution provided for a bicameral legislature, consisting of the 45-member Senate and the 80-member Chamber of Deputies. Representatives must be at least 25 years of age and are elected for five-year terms. Voting is by secret ballot and is compulsory for all citizens ages 18–60. Women were first allowed to vote in 1963.

POLITICAL PARTIES

Since the end of the War of the Triple Alliance, two parties have dominated politics—the National Republican Association (Asociación Nacional Republicana), generally known as the Colorado Party, and the Liberal Party. Both parties have exemplified the uncompromising nature of Paraguayan politics and used their position to stifle the opposition. Consequently, changes of administration have been effected principally by armed revolt.

The Colorado Party governed from its founding in 1887 until 1904, and again after 1947. Conservative and nationalistic, the Colorados split during the 1950s into two factions: the "officialist" Colorados supported the Stroessner dictatorship, while the People's Colorado Movement (Movimiento Popular Colorado—MOPOCO) styled itself a supporter of "representative democracy." Most of the MOPOCO leadership chose exile in 1959. In the 1980s the Colorados became even more divided. Three groups emerged: a "militant" pro-Stroessner faction; "traditionalists," pushing for Stroessner to step down; and a reformist "ethical" faction, which is interested in cleaning up government corruption.

The 1989 coup was engineered by a leader of the "traditionalist" faction. Wasmosy, the first freely elected civilian president who took office in 1993, was more reformist in his approach. Raúl Cubas was elected party president in 1998. He ran against his fellow party member Wasmosy and was supported by Gen. Lino Oviedo, who had attempted a military coup against Wasmosy in 1995. After the assassination of Colorado Party vice president Luis Argaña in 1999, Cubas had to resign. Senate president Luis González, also from the Colorado Party, became president. González faced accusations of corruption but an effort to impeach him failed in 2002. Even with the hefty parliamentary majority—45 out of 80 seats in the Chamber and 24 out of 45 seats in the Senate—the Colorados remained badly split and in disrepair until 2003. That year, the Colorado Party only won 37 seats in the Chamber and 16 seats in the Senate, falling short of a majority control in either chamber.

The Liberal Party, like the Colorados, appeared in 1887. They seized power in 1904 and governed until 1936. Banned in 1942, the Liberals were reconstituted during the 1960s. There has never been a recognizable ideological distinction between the Liberals and Colorados, but the two parties are similar in their disunity. Liberals had, by 1982, split into three factions: the Authentic Radical Liberal Party (Partido Liberal Radical Auténtico—PLRA), the Liberal Teeté Party (Partido Liberal Teeté—PLT), and the Radical Liberal Party (Partido Liberal Radical—PLR). After 1989, the PLRA and the PLR reemerged to compete for votes, with the PLRA considerably stronger. The PLRA, led by Domingo Laíno, was the largest opposition party in 1996. In the 1998 presidential and parliamentary elections Laíno obtained 43.9% of the vote and his party secured 27 out of 80 seats in the Chamber of Deputies and 13 out of 45 seats in the Senate. The 2003 presidential candidate, Julio César Franco, obtained a disappointing 24% of the vote, and the Liberal Party secured 21 seats in the Chamber and 12 seats in the Senate.

A number of short-lived parties have formed. The National Encounter Party (PEN), which appealed to the urban middle class, consisted of an alliance of several smaller parties and civic organizations. The PEN won eight seats in the Senate and nine seats in the Chamber of Deputies in the 1993 elections. But in 2003, it failed to win seats in either chamber. In 2003, three smaller parties—the populist Movement Fatherland of the Best, the conservative National Union of Ethical Citizens, and the left-wing Party for a Country of Solidarity—also won 10, 10, and 2 seats respectively in the Chamber and 8, 7, and 2 seats respectively in the Senate.

Electoral reform has purged the voter rolls of the deceased (who usually "voted" for Colorado Party members), made voting more than once in an election a punishable crime, and established a tribunal to oversee the electoral process. These reforms appear to be working, as evidenced by fair municipal elections in 1996 and presidential and parliamentary elections in 1998 and 2003.

LOCAL GOVERNMENT

Paraguay is divided into 17 departments, which are subdivided into districts, which, in turn, comprise municipalities (the minimum requirement for a municipality is 3,000 persons) and rural districts (partidos ). A governor, elected by popular vote, runs each department. Municipal government is exercised through a municipal board, chosen by direct election, and an executive department. In the principal cities and capitals, the executive department is headed by a mayor appointed by the minister of the interior; in other localities, the mayor is appointed by the presidents of the municipal boards. Police chiefs are appointed by the central government.

JUDICIAL SYSTEM

The five-judge Supreme Court exercises both original and appellate jurisdiction. There are four appellate tribunals: civil/commercial, criminal, labor, and juvenile. There are special appellate chambers for civil and commercial cases and criminal cases. Each rural district (partido ) has a judge appointed by the central government to settle local disputes and to try accused persons and sentence those found guilty. Federal judges and magistrates are appointed by the executive for a term of five years coinciding with the presidential term, so that the judges of the Supreme Court and lesser tribunals are always named by the president in power. The Council of State must approve the appointment of members of the Supreme Court and may remove them by impeachment. Justices of the peace deal with minor cases. The judicial system has been modernized and has been identified as the main tool to end widespread corruption historically associated with the government bureaucracy. Because Paraguay has been historically considered a safe haven for smuggling of goods (with Argentina and Brazil being the final destinations), an independent and powerful judiciary is deemed essential to instill the rule of law in trade and commerce in Paraguay.

The 1992 constitution provides for selection of judges by an independent body working with the congress and the executive. As of 1997 based on recommendations from the Magistrates Council, the Supreme Court nominated 215 lower court judges and magistrates. There is also a military court system for the armed forces. The judicial system is based on civil law, mainly influenced by French and Argentine codes.

ARMED FORCES

Paraguay's armed forces in 2005 amounted to 10,300 active personnel, and was supported by some 164,500 reservists. The Army numbered 7,600, and whose equipment included 12 main battle tanks and 5 light tanks, all of World War Two vintage. The Navy of 1,400 included 900 Marines and 100 naval aviation personnel. Major naval units included 28 patrol/coastal vessels and 2 amphibious landing craft. The Air Force had 1,100 active personnel with 10 combat capable, including 4 fighter ground attack aircraft. It had no armed helicopters. The country's paramilitary force consisted of the 14,800-member Special Police Service. Paraguay had compulsory military service of one year for all males 18 years of age. The defense budget in 2005 totaled $57.6 million.

INTERNATIONAL COOPERATION

Paraguay is a charter member of the United Nations, having joined on 24 October 1945; it participates in ECLAC and several nonregional specialized agencies, such as the IAEA, the World Bank, ICFTU, ILO, IMF, UNESCO, UNIDO, and the WHO. Paraguay is also a member of the South American Community of Nations, G-77, the Inter-American development Bank, the Latin American Economic System (LAES), the Latin American Integration Association (LAIA), Mercosur, the OAS, and the Río Group.

Paraguay has offered support to UN missions and operations in Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Burundi (est. 2004), Côte d'Ivoire (est. 2004), and the DROC (est. 1999). The country is a signatory of the 1947 Río Treaty, an inter-American security agreement. Paraguay belongs to the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL) and the Organization for the Prohibition of Chemical Weapons.

In environmental cooperation, Paraguay is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, the Kyoto Protocol, the Montréal Protocol, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Landlocked Paraguay has a limited economy based predominantly on agriculture (cotton and soy), livestock production, forestry, and the basic processing of materials. The country has vast hydroelectric resources, including the world's largest hydroelectric generation facility built and operated jointly with Brazil (Itaipú Dam), but it lacks significant mineral or petroleum resources. Partnering with Brazil on the Itaipú, with Argentina on the Yacyreta, and operating the Acaray dam on the Acaray River, allows Paraguay to generate all of the country's electrical power from hydroelectric plants, and even export the remaining to neighboring countries. The relative importance of agriculture has declined, and the value of services has risen; however, cattle raising remains a key economic activity. The large informal sector consists mainly of the reexport of consumer goods from Asia and the United States to neighboring countries, and of the many small street vendors and businesses that provide services.

Paraguay suffered for years from runaway inflation. The International Monetary Fund (IMF) joined with the US government in 1957 to provide stabilization loans which enabled Paraguay to establish a free exchange system and to accelerate the pace of public investment. During the 1960s, inflation ranged between 2% and 3%, but the rate increased during the following decade to 28.2% in 1979. The rate was an estimated to be 30–40% through the 1980s, fueled by rapid expansion of the money supply.

During the 1980s, construction of the Itaipú hydroelectric project (which was finished in 1982) stimulated Paraguay's economic expansion. At the end of the Itaipú building boom, currency devaluations in Argentina and Brazil (and thus the relative overvaluation of the guaraní), and declining international market prices for Paraguay's agricultural products led to an economic slowdown that was exacerbated by the impact of adverse weather on the agricultural sector.

An economic reform package instituted in the early 1990s included judicial reform, a macroeconomic stabilization program featuring fiscal austerity, liberalization of the exchange rate, and efforts to privatize state-owned enterprises. But the banking crisis of 1995 required a government bailout and sent shock waves through the economy, causing a sharp drop in commercial sales. Progress on the reforms continued in 1996 but at a slow pace due to stiff political opposition. Reforms were all but abandoned in 1997 and 1998. The economy grew at a rate of 2.7% between 1988 and 1998, but GDP contracted by 0.4% in 1998, when the financial crisis was aggravated by El Niño crop damage. Inflation was at 7% in 1997, but rose to 14.6% in 1998, mainly because of the impact of the Brazilian currency devaluation, which led to a devaluation of the local currency, Paraguay's third banking crisis since 1995.

Similar to many Latin American countries during the 1980s and 1990s, Paraguay experienced small contractions alternating with slow growth; however, in 2002, the contraction in real GDP was estimated at 4.4% as the political situation became increasingly unstable. Unemployment rose to 16% in 1999, to 18% in 2000, and to 25% in 2001. An estimated 65% of the population was living below the poverty line in 2001. The integration into Mercosur (Southern Cone Common Market), did not bring the hoped-for benefits of increased foreign investment and increased exports, primarily because of the melt-down of the Argentinean economy in 2001 and 2002.

The election of President Duarte Frutos in August 2003 stabilized the situation. Aided by a firmer exchange rate and perhaps a greater confidence in the economic policy of the Duarte administration, the economy rebounded from 2003 to 2005, posting modest growth each year. Paraguay's real GDP in 2004 of $7.98 billion (in 1994 dollars) represented an increase of 3.9% from 2003 (IMF data using the prior base year of 1982 shows real GDP growth of 2.9% in 2004). Official foreign debt rose slightly in 2005, to $2.35 billion, but inflation dropped to 2.8%, down from 9.3% in 2003, the lowest rate since 1970. However, given the importance of the informal sector, accurate economic measures are difficult to obtain.

INCOME

The US Central Intelligence Agency (CIA) reported that in 2005 Paraguay's gross domestic product (GDP) was estimated at $30.9 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $4,900. The annual growth rate of GDP was estimated at 3.3%. The average inflation rate in 2005 was 7.5%. It was estimated that agriculture accounted for 27.5% of GDP, industry 24%, and services 48.5%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $222 million or about $39 per capita and accounted for approximately 3.7% of GDP. Foreign aid receipts amounted to $51 million or about $9 per capita and accounted for approximately 0.8% of the gross national income (GNI).

The World Bank reported that in 2003 household consumption in Paraguay totaled $5.29 billion or about $937 per capita based on a GDP of $6.0 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 2.8%. It was estimated that in 2005 about 32% of the population had incomes below the poverty line.

LABOR

In 2005, Paraguay's labor force totaled an estimated 2.68 million. As of 2003, agriculture accounted for 31.5% of the workforce, with 15.8% in the industrial sector and 52.7% in the services sector. In 2005, it was estimated that 16% of the labor force was unemployed.

The constitution provides Paraguayans in both the public and private sector the freedom to form and join unions without government interference. The constitution also protects fundamental worker rights, including the right of association. There also are provisions for antidiscrimination, employment tenure, severance pay, collective bargaining, and the right to strike. As of 2001, 15% of the labor force (about 121,000 workers) belonged to unions, which numbered approximately 1,600.

Labor laws provide for a maximum workweek of 48 hours for day work and 42 for night work, with one day of rest. The law also provides for an annual bonus of one month's salary. The minimum wage was $170 per month in 2001 for the private sector; the public sector has no mandated minimum. It is estimated that 50% of workers earn less than the minimum amount. The minimum working age is 15, although minors as young as 12 may work in family enterprises. In reality these provisions are not effectively enforced and thousands of children work both on farms and in urban areas.

AGRICULTURE

Cultivation utilizes about 7.9% of Paraguay's total land area. The total area under cultivation rose from 245,636 hectares (606,976 acres) in 1940–41 to an estimated 3,136,000 hectares (7,749,000 acres) in 2003. Primary agriculture accounts for 20% of GDP and about 35% of employment. The principal areas of cultivation are in the clearings around Asunción and Encarnación. Arable land outside these regions is sparsely settled, and inhabitants there rely principally on livestock and forestry for a living.

The two most widely cultivated crops are manioc (cassava) and corn, which, with meat, are the staples of the Paraguayan diet. Cotton, tobacco, and sugarcane are among the leading cash and export crops. A national wheat program increased production from 7,000 tons in 1965 to 23,000 tons in 1973, 55,000 tons in 1981, and 715,000 tons in 2004, eliminating the need for wheat imports. Enough beans, lentils, sweet potatoes, peanuts, coffee, and fruits are grown for home use, and slightly more than enough rice. Crops yielding edible oils are widely grown, and yerba maté is cultivated on plantations. Production of principal crops for 2004 (in tons) included sugarcane, 3,637,000; manioc, 5,500,000; soybeans, 3,583,000; corn, 1,120,000; yerba maté, 115,000; cotton, 109,000; and tobacco, 16,500. In 2004, Paraguay exported $1.35 billion in agricultural products, 68% of total exports.

ANIMAL HUSBANDRY

During the 1960s and 1970s, the meat-packing industry developed appreciably, with meat and related products constituting Paraguay's most important single export. Since the late 1970s, however, market conditions for beef exports have deteriorated, and the value of exported meat products has declined significantly. Exports of livestock and livestock products typically account for 7% of total exports and in some years comprise as much as 14%. In 2004, meat exports amounted to $159.7 million. About 70–80% of beef exports are sent to Mercosur countries.

In 2005, livestock totaled 9,622,000 head of cattle, 1,600,000 hogs, 500,000 sheep, and 360,000 horses. There were also an estimated 17 million chickens that year. Beef production was about 215,000 tons. Other livestock products in 2005 included 372,400 tons of cow's milk and 100,000 tons of eggs.

FISHING

Paraguay has no appreciable fishing industry, and the consumption of fresh fish is low. The country has potential resources for fisheries, however. Dorado weighing up to 18 kg (40 lb) are caught in the Upper Paraná River, and the Paraguay River yields salmon, surubi, pacú, boga, and mandi. The catch was 25,000 tons in 2003.

FORESTRY

Although forest resources are immense, exploitation is limited by lack of roads and mechanized transport facilities. About 59% of Paraguay's total land area consists of forest (23.4 million hectares/57.7 million acres in 2000). However, much of that lies in the western Chaco, the forest resources of which have never been exploited. Roundwood cuttings totaled 9.99 million cu m (352.6 million cu ft) in 2004, with 60% used for fuel wood.

Exportation of logs was banned in 1973 in order to encourage the domestic lumber industry; forest products earned $37.5 million on the export market during 2004.

The chief forest products are quebracho, various cabinet and other tropical hardwoods, and oil of petitgrain. Quebracho, the source of the tannin used by the leather-tanning industry, is the wood of the greatest commercial importance. Paraguay is the world's largest producer of petitgrain oil, a perfume base distilled from the leaves and shoots of the bitter orange tree. Since wood and charcoal are the only fuels produced in Paraguay, about two-thirds of all wood cut is used for burning.

MINING

Paraguay's mining potential has been restricted by limited exploration, inadequate infrastructure, large fiscal and trade deficits, scarcity of foreign exchange, and limited private investment, and the reforms deemed necessary to alleviate the country's economic stagnation were impeded by political uncertainty. The mineral industry in 2003 accounted for less than 1% of GDP, and was focused on the production of cement, and the extraction of industrial minerals such as clays, gypsum, kaolin, limestone, marble, ocher, ornamental stone, silica sands, and pryophyllite soapstone talc. No minerals were among the country's top export commodities. Production for 2003 included an estimated 66,600 metric tons of kaolin and an estimated 16,300 metric tons of limestone for cement and lime. In 2003, Paraguay also produced lime, rock, dimension stone, other stone, and hydraulic cement. In addition, sandstone, mica, copper, and salt have been exploited modestly in recent years.

There were small deposits of iron ore, and a few mines were worked before 1865, but there was no evidence, until recently, of any metallic mineral deposits of commercial value. Lateritic iron ore deposits along the Paraná River near Encarnación were estimated at 300 million tons with 35% iron. Manganese deposits were known to exist near the Guairá Falls. Excellent limestone, found in large quantities along the Paraguay River north of Concepción, was quarried for the cement industry. There were also known deposits of azurite, barite, lignite, malachite, peat, pyrite, pyrolusite, and uranium. Under Paraguayan law, all mineral rights belong to the government, which has sought to encourage mining development by the privatization of some state-owned companies. A diamond-drilling and igneous exploration program begun in 1997 was completed, and there was ongoing exploration throughout the country by foreign companies.

ENERGY AND POWER

Paraguay has no known proven reserves of oil or natural gas. However, it is a major exporter of hydroelectric power.

Hydroelectric power accounts for nearly all of the country's electric power capacity. In 2002, electric power generating capacity totaled 7.416 million kW, of which hydroelectric capacity accounted for 7.410 million kW, with the remaining capacity dedicated to conventional thermal generation. Electric power output in 2002 totaled 47.774 billion kWh, of which hydroelectric plants generated 47.730 billion kWh. Geothermal/other sources generated 0.030 billion kWh, and conventional thermal sources 0.14 billion kWh. However, domestic demand for electric power totaled only2.660 billion kWh. Exports of electric power that year came to 41.770 billion kWh.

Although Paraguay has no reserves of oil, it does have a modest crude oil refining capacity. As of 1 January 2004, the country's refining capacity was estimated at 7,500 barrels per day. Crude oil imports in 2002 averaged 2,020 barrels per day, while imports of all petroleum products, averaged 25,340 barrels per day, for that year. Demand for refined petroleum products in 2002, averaged 25,050 barrels per day.

INDUSTRY

Paraguay is one of the least industrialized countries in South America. Because of the limited quantities of proven mineral reserves, there is mining only of limestone, gypsum, and clays, mostly for the building trade. Manufacturing is generally small-scale and directed toward processing agricultural products. The principal industry of Paraguay is farming; agriculture accounted for 24.1% of GDP in 2004. The leading agricultural products are cotton, sugarcane, corn, soybeans, potatoes, bananas, oranges, wheat, beans, tobacco, mandioca (yucca), and yerba maté (Paraguayan tea, which is very popular among country residents). Livestock breeding is also a major occupation, and the most favored areas are located at the Chaco and southern oriental region. Forestry is also important to the economy, while tourism plays a minor role. Most visitors are from Brazil and Argentina, demonstrating the strong economic ties with those countries.

Processing of agricultural, animal, and forestry products, mainly for export, and small-scale manufacture of consumer goods for local needs are of greatest importance. Most manufacturing is done in the Asunción area; some plants, however, are near the source of their respective raw materials. Import-substitution industries encouraged by the government include petroleum refining, foodstuffs, wood processing, and chemicals. The re-export of imported consumer goods to neighboring countries is a recent economic development. Maquila assembly operations began in 2000, with the export of leather car seats to France. Manufacturing accounted for 14.5% of GDP in 2004.

Industries include two cement plants, at Vallemí and Itapucumi, and a Paraguayan-Brazilian steel mill at Villa Hayes. Food-processing plants include slaughterhouses; flour mills; sugar mills; oil mills producing cottonseed and peanut oils for domestic consumption, as well as castor, tung, cocoa, and palm oils for export; related industries that process the by-products of oil extraction; and mills that produce yerba maté. There are numerous sawmills. A considerable but decreasing number of hides are also produced for export. Although there is a considerable textile industry, imports still run high.

SCIENCE AND TECHNOLOGY

In 1993, there were eight scientific and technological research institutes and learned societies in Paraguay, all of them located in Asunción. Notable among them are the Paraguayan Scientific Society, founded in 1921, and the South American Union of Engineers' Associations, established in 1935. The Nuestra Senora de la Asunción Catholic University, founded in 1960 at Asunción, has a faculty of science and technology. The National University of Asunción, founded in 1889, has faculties of medicine, dentistry, chemistry, exact and natural sciences, physical sciences and mathematics, veterinary sciences, and agricultural engineering. The Higher School of Philosophy, Sciences and Education, also in Asunción, was founded in 1944. In 1987–97, science and engineering students accounted for 20% of college and university enrollments.

In 2002, Paraguay's expenditures on research and development (R&D) totaled $24.852 million, or 0.10% of GDP. Of that amount, 63.1% came from government sources, followed by 21.8% from foreign investors. Higher education accounted for 12.7% and private nonprofit groups accounted for 2.3%. In that same year there were 83 researchers and 118 technicians that were engaged in R&D per million people High technology exports in 2002 totaled $7 million, or 3% of the country's manufactured exports.

DOMESTIC TRADE

Offices that deal with foreign concerns and most important retail establishments are in Asunción, the only significant commercial center. Most retail trade is in small shops dealing in a limited variety of goods.

Legislation in 1961 provided for governmental and private commercial credit companies to aid in the development of agricultural, livestock, and industrial activities. Consumer credit facilities have been expanding. Many of the larger Asunción stores offer installment credit.

Most commercial activity is focused on reexport of items from Asia and the United States to Argentina and Brazil. Much of this activity takes place through an underground market system, which some business groups claim is just as large as Paraguay's formal economy. The informal sector features thousands of small enterprises and urban street vendors, along with reexports of select imported consumer goods (electronics, whiskeys, perfumes, cigarettes, and office equipment).

FOREIGN TRADE

Paraguay's foreign trade is typical for an agricultural country, but the re-export trade on the black market is the country's largest foreign exchange earner. Over a third of Paraguay's reported commodity export returns comes from oil seeds (34%), while another

9.1% comes from cotton. Other exports include meat (8.3%), leather (6.0%), wood and plywood (5.5%), and vegetable oil (4.8%).

The main imports are machinery, petroleum and petroleum products, chemicals, automobiles and buses, principally from Brazil and the United States. Bilateral European Union-Paraguay trade represented 10.8% of GDP in 2004, with imports decreasing and exports increasing as a percentage of GDP for the last five years.

BALANCE OF PAYMENTS

The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Paraguay's exports was $2.2 billion while imports totaled $2.7 billion resulting in a trade deficit of $500 million. The International Monetary Fund (IMF) reported that in 2001 Paraguay had exports of goods totaling $2.41 billion

and imports totaling $2.95 billion. The services credit totaled $580 million and debit $410 million.

Paraguay presently maintains a balance-of-payments surplus. It runs a deficit in the trade of goods, but a large surplus in services, reflecting large exports of electricity from Paraguay's two large hydroelectric dams shared with Brazil and Argentina. In 2004, official foreign exchange reserves increased almost 50% from 2002.

BANKING AND SECURITIES

The Central Bank of Paraguay (BCP) was founded in 1952 as a state-owned, autonomous agency charged with establishing the government's monetary credit and exchange policies. Recommendations in early 1961 by an economic mission of the IDB and IBRD led to the establishment of the National Development Bank to provide an effective source of medium- and long-term agricultural and industrial credits. Savings and loan institutions are regulated by the superintendent of banks. There are two state-owned banks, some locally owned banks, and nine foreign banks. Foreign-owned banks account for 86% of total deposits and 83% of all loans, and the two largest banks—Banco de Asunción and Citibank—are foreign-owned.

In 1995, there were 35 banks operating in Paraguay, 9 of which had opened since 1990. During the same period the number of finance companies nearly doubled, to 68. The increase in the number of banks and finance companies, out of all proportion to the size of the economy, was generally believed to be related to the rapid increase in "hot money" flows through Paraguay associated with drug smuggling. In late 1995, the Central Bank announced a freeze on the opening of new banks and finance companies on the grounds that the local market was saturated. In the same year, a currency crisis caused the collapse of ten institutions, requiring $400 million in government subsidies. The 1996 Banking Law strengthened supervision of the banking system; in 1997 Banco Union was liquidated, as were two of the largest public banks due to poor performance. There are now 40 finance companies. The International Monetary Fund (IMF) reported that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $668.1 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $2.6 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 13.45%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 20%.

Paraguay's first stock market began trading in October 1993. There are 60 local companies traded on the exchange. All companies have a minimum paid-up capital of $50,000. However, the tradition of family ownership and almost universal practice of "double accounting" for tax evasion purposes places limits on the growth of a capital market. In 1998, the stock market handled approximately $10–15 million per a month in transactions.

INSURANCE

All insurance business in Paraguay is regulated by the government through the superintendent of banks. Foreign companies are permitted to operate in the country, but are under stringent requirements calling for the investment of capital and reserves. In 1995, there were 40 insurance companies operating in Paraguay. Workers'

compensation and public transport liability are both compulsory insurances in Paraguay, with the government providing workers' compensation as a part of the social security scheme.

PUBLIC FINANCE

The Paraguayan government depends upon import duties for revenue, especially from the reexport trade. The government is the largest employer, and the budget represents 40% of GDP. The majority of the budget (80%) goes to public employee salaries, 15% to servicing the foreign debt, and 5% for investment.

The US Central Intelligence Agency (CIA) estimated that in 2005 Paraguay's central government took in revenues of approximately $1.3 billion and had expenditures of $1.3 billion. Revenues minus expenditures totaled approximately -$36 million. Public debt in 2005 amounted to 36.1% of GDP. Total external debt was $3.535 billion.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, budgetary central government revenues in guaraníes were g6,065.6 billion and expenditures were g6,299.8 billion. The value of revenues in US dollars was us$1 million, based on a market exchange rate for 2003 of us$1 = g6,424.3 as reported by the IMF.

TAXATION

In 2005 the basic corporate tax rate was 30%, but there are a number of exceptions. Reinvested income and investment in reforestation are taxed at 10%, and stock exchange companies are taxed at a reduced rate of 15% until 2008. In addition, the corporate rate was scheduled to be cut to 20% in 2006 and to 10% in 2007 and beyond. Capital gains on all assets are taxed at 30%, but in tandem with the corporate rate, was to be reduced to 20% in 2006 and to 10% in 2007. In 2005, dividends to resident shareholders were not taxed, but dividends paid to nonresident shareholders were subject to a 5% withholding tax. However, in 2006 the withholding tax rate on dividends paid abroad to nonresidents was scheduled to increase to 15%. In 2007, and onward, dividends paid to residents and nonresidents will be 5% and 15%, respectively. Branches of foreign companies established in Paraguay, apart from the maquila, free zone, and investment incentives regimes, are subject to a 35% corporate income tax rate for 2005 and 2006, which was slated to drop to 30% in 2007. There is a license tax payable by all persons and entities engaged in permanent forms of business.

Paraguay only directly taxes "high-level" executives on their income, but this may be handled through the corporation tax if the company only deducts the amount of executive salaries held to be tax-exempt under the law. If the company deducts all executives' salaries, individual executives are subject to income tax. Social security taxes total 25.5% of payroll, with 16.5% from the employer and 9% from the employee. All land and buildings are also subject to an annual property tax proportional to the fiscal valuation of real estate.

The main indirect tax is Paraguay's value-added tax (VAT) with a standard rate of 10%.

CUSTOMS AND DUTIES

In general, Paraguayan customs duties have been viewed as a source of revenue and a means of conserving foreign exchange, with relatively few of the high duties being intended as protection for manufactured products. Tariff rates, under the Mercosur common external tariff (CET) agreement, range from 0% for raw materials to 20% for automobiles. Import duties are specific, ad valorem, or both. Import pressures are such that the government has not kept a tight control on the purchase of nonessentials. In 2005, Paraguay imposed consumption taxes of 5% on imported luxury items such as perfumes, toilet waters, cosmetics, precious and semiprecious stones and on watches, arms, ammunition and parts. A 1% rate will be applied to certain consumer appliances and electronic products. Toys, games, and musical instruments (and parts) will be zero-rated.

Paraguay has free port privileges in Brazil at Paranaguá, Santos, and Río Grande do Sul; in Argentina at Buenos Aires and Rosario; in Chile at Antogagasta; and in Uruguay in Montevideo and Nueva Palmira. Most trade is done through the Brazilian ports.

FOREIGN INVESTMENT

Paraguay's economy historically has been dominated by foreign interests, in particular by those of wealthy Argentineans, Britons, and Brazilians. Nevertheless, the Paraguayan government has encouraged foreign investment in recent years, as a means of developing the country. Foreign direct investment (FDI) inflows into Paraguay were approximately $100 million per year in 1993 and 1994. By 1997, FDI inflow had increased to $230 million, peaking at $336 million in 1998. FDI inflows fell sharply in 1999 to only $66 million amid the political violence and chaos that ensued after President Cubas released General Lino Oviedo from prison. FDI inflows increased to $95 million in 2000, and to $152 million in 2001. During the period of August 2003 through July 2004 the Paraguayan government approved foreign investment projects worth $45.2 million, which represented 29% of all investment projects, foreign and national, approved during that period.

Government efforts to attract foreign investment through privatization have progressed slowly because of political opposition and uncertainty about the transparency of the process. Political realities impede the process even further, as the large state-run companies most attractive to foreign buyers (such as telecommunications, water/sewage, and electrical companies) employ thousands of potential voters and are outlets for political patronage. The telephone and utilities company were in the process of being privatized before the government suspended the process in June 2002, after bowing to political pressure. In 2004, Congress tried to reverse legislation that prohibited privatization but discontinued its efforts in the face of public demonstrations against privatization.

Currently, the United States has the largest foreign investment in Paraguay, with a total of US investments in Paraguay exceeding $440 million. Foreign investment was strongly concentrated in the services sector, mainly cellular telephones and hotels.

Foreign investment laws are among the most liberal in Latin America. Private property has historically been respected in Paraguay but despite the incentives, private investment has been insufficient to maintain a sustainable pace of growth.

ECONOMIC DEVELOPMENT

Paraguay has sought to develop closer economic ties with Brazil, the United States, and Western European nations, largely to reduce the country's dependence on trade with Argentina.

Economic planning is the responsibility of the Technical Planning Secretariat for Economic and Social Development, established in 1962. The first national plan covered 1965–66; the second, 1967–68. The third plan, a medium-term, five-year program for 1969–73, was replaced by a 1972–77 development scheme calling for a 26% increase in public investment in agriculture. Regional development, also given high priority, was to be accomplished through Paraguay's utilization of its water resources in the Itaipú hydroelectric project; a parallel development program for the Alto Paraná region was retarded by delays in the Yacyretá power project. The 1977–81 development plan aimed to achieve a more equitable distribution of social resources. A plan announced in September 1986 provided for comprehensive reform in exchange rates and in investment and fiscal policies. Government economic reforms during the 1990s were generally subsumed by opposition parties. Reforms in 1999 centered on a diversification of the economy, away from the re-exportation business, and on fighting corruption, which the government's comptroller office estimated to have cost $2.3 billion in 1997.

Foreign debt rose in early 2003 to $2.28 billion, inflation rose to 14.6%, and the currency lost over 50% of its value against the US dollar in 2002. In the early 2000s, the country's economy was marked by slow economic growth, increasing unemployment, and rising poverty rates. Paraguay was in arrears with the World Bank and the Inter-American Development Bank in 2003. That year the IMF encouraged the country to revive its privatization program and to strengthen the banking system.

Macroeconomic performance has improved significantly under the Duarte administration, with inflation falling significantly, and the government clearing its arrears with international creditors. Unemployment remains stubbornly high and the living standard of most households has not improved. However, the administration has placed a strong emphasis on participating in international institutions and has used diplomacy to promote the opening of international markets to Paraguayan products. To curb corruption, the president identified respected apolitical officials to head the ministries of finance and industry. The ministry of industry has created a transparent, internet-based government procurement system that has won the praise of the private sector. Six Supreme Court justices were selected with input from civil society and public hearings in the congress, both a first for Paraguay.

SOCIAL DEVELOPMENT

All employed persons are covered by the social insurance system, first established in 1943, and most recently updated in 1992. The program is funded by a contribution of 9% of earnings from employees and a contribution of 14% of payroll by employers, and a contribution of 1.5% of earnings by the government. The program provides for free medical, surgical, and hospital care (not always available) for the worker and dependents, maternity care and cash benefits, sickness and accident benefits, retirement pensions for people ages 55–59, and funeral benefits. Coverage for work injury is also available for all employees including domestic servants and teachers.

Although women have full legal rights, in practice they face discrimination in education and employment, and their literacy rates are much lower than those of men. Domestic violence and sexual harassment remain serious problems for women and have been targeted as key issues by both the government and nongovernmental organizations. Spousal abuse is common and punishable only by a fine. The majority of women face harassment in the workplace. As of 2004, women had a higher illiteracy rate than men. The secretariat of women's affairs sponsors programs to increase opportunities for women.

Human rights abuses include arbitrary arrest and detention, corruption in the judiciary, and poor prison conditions. Discrimination against indigenous people continues.

HEALTH

Hospital and medical facilities are generally concentrated in Asunción and other towns. There were an estimated 117 physicians, 36 dentists, and 20 nurses per 100,000 people in 2004. Total health care expenditure was estimated at 5.2% of GDP.

Average life expectancy in 2005 was 74.89 years; the infant mortality rate averaged 25.63 per 1,000 live births. As of 2003, the crude birth rate and overall mortality rate were estimated at, respectively, 30.5 and 4.7 per 1,000 people. Maternal mortality was 190 per 100,000 live births. More than half of the married women ages 15–44 used contraceptives. The principal causes of death are bacillary dysentery and other intestinal diseases, heart disease, pneumonia, and cancer. Approximately 79% of the population had access to safe drinking water and 95% had adequate sanitation Immunization rates for children up to one year old were: tuberculosis, 87%; diphtheria, pertussis, and tetanus, 82%; polio, 82%; and measles, 60%. About 26% of children under five years old were considered malnourished.

There were an estimated 600 deaths from AIDS in 2003. The HIV/AIDS prevalence was 0.50 per 100 adults in 2003. As of 2004, there were approximately 1,500 people living with HIV/AIDS in the country.

HOUSING

As of 1998, the country continued to face serious housing shortages with a cumulative deficit of about 350,000 dwelling units. About 30% of the population live with overcrowded conditions; the average number of people per dwelling is 4.6. A majority of housing units lack basic utilities. At the 2002 census, there were about 1.1 million housing units.

A government agency, the Paraguayan Housing and Urban Institute, was created in 1964 with an IBRD loan of $3.4 million to aid in the construction of living units for low-income families. In 1973, a National Housing Bank was established to finance low-income housing development.

EDUCATION

Elementary education is compulsory and free for 9 years, usually for children ages 6–14 (ages 9–14 in rural areas). Primary education lasts for nine years followed by three years of secondary or professional school. The academic year runs from March to November.

In 2001, about 30% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 89% of age-eligible students. The same year, secondary school enrollment was about 51% of age-eligible students. It is estimated that about 92.8% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 27:1 in 2003; the ratio for secondary school was about 12:1.

The National University of Paraguay is located in Asunción, the capital city. Nuestra Señora de la Asunción Catholic University, a private institution, was founded in 1960. There are at least 12 other universities within the country. In 2003, about 27% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 91.6%.

As of 2003, public expenditure on education was estimated at 4.4% of GDP, or 11.4% of total government expenditures.

LIBRARIES AND MUSEUMS

Paraguay's modest cultural life is centered in Asunción, which has the nation's principal libraries and museums. The National Library and Archives, established in 1869, are located in Asunción and hold 44,000 volumes. The National University of Asunción holds 26,100 volumes, and the Natural and Ethnographic History Museum, also in Asunción, holds 30,000 volumes. The Centro Cultural Paraguayo-Americano has a 12,000-volume library with both Spanish and English titles and includes one of the country's most complete collections of Paraguayan works.

Asunción is the site of 13 historical, scientific, and art museums. Prominent art museums include the National Museum of Fine Arts and Antiquities; the Andrés Barbero Ethnographic Museum, devoted to Amerindian art; the Julián de la Herrería Ceramics and Fine Arts Museum; and the Museum of Modern Art of the Ministry of Education. There is an historic house museum in Yaguarón.

MEDIA

In 2003, there were an estimated 46 mainline telephones for every 1,000 people. The same year, there were approximately 299 mobile phones in use for every 1,000 people.

Radio Nacional del Paraguay is the primary state-owned station. Other station for radio and television are privately owned. In 2000, there were 218 television sets for every 1,000 people. In 2003, there were 188 radios for every 1,000 people. The same year, there were 34.6 personal computers for every 1,000 people and 20 of every 1,000 people had access to the Internet. There were nine secure Internet servers in the country in 2004.

Newspaper readership in Paraguay is among the lowest in Latin America. There were four major daily papers in circulation in 2004. The circulation of Ultima Hora, founded in 1973, was 40,000 in 2004. Noticias had a circulation of 50,000 in 2004 and ABC Color had a circulation of 35,000 (down from 75,000 in 2002). Diario Popular began publication in 1967; circulation figures in 2004 were unavailable.

As of 2006, the constitutionally guaranteed freedom of speech and the press is said to be respected by the government to a greater degree than any time in the country's recent history. An increasing amount of the media is independently owned.

ORGANIZATIONS

Several chambers of commerce promote local and international trade. Active trade associations include the Federation of Production, Industry, and Commerce, an importers' association, and various organizations of particular trades. Professional associations are also active, particularly in the field of healthcare.

The Paraguayan Atheneum sponsors lectures, concerts, and recitals, as well as courses in foreign languages, art, and music. The Paraguayan-American Cultural Center and the Argentine-Paraguayan Institute are important binational centers. Paraguay has an Academy of Language and several organizations devoted primarily to Guaraní culture, including the Academy of Guaraní Culture and the Indian Association of Paraguay.

Other organizations include the Women's Center and the Youth Atheneum. The Paraguay Association of Scouts and Guides, Junior Chamber, and the YMCA/YWCA are also active. Sports associations offer programs for all ages and there are active organizations of the Special Olympics.

Amnesty International, Caritas, Habitat for Humanity, and the Red Cross have national chapters.

TOURISM, TRAVEL, AND RECREATION

The monuments, museums, and parks of Asunción are the main tourist attractions. Also of interest are the Amerindian markets in and around the capital; at the famous market of Itauguá about 30 km (18 mi) from Asunción, the makers of ñandutí lace sell their wares. Other popular tourist attractions include the world famous Iguazu Falls at Paraguay's borders with Brazil and Argentina, the San Bernardino resort, on Lake Ypacarai, and the modern boom town of Ciudad del Este (formerly Puerto Presidente Stroessner). Football (soccer) is Paraguay's national sport, with some 30 clubs in Asunción alone. Tennis, horse racing, boxing, basketball, and rugby football are also popular.

Foreign tourists entering Paraguay are required to present a valid passport and visa. Visitors may be required to show proof of vaccinations against yellow fever. Strong precautions are recommended against typhoid and malaria.

In 2003, there were 268,175 tourist arrivals in Paraguay, of whom 66% came from Argentina. Tourist receipts totaled $81 million. That year there were 4,899 rooms in hotels and other facilities with 10,565 beds and a 38% occupancy rate. The average length of stay was 2.5 nights.

In 2004, the US Department of State estimated the daily cost of staying in Asunción at $153; in Encarnación, $47; and in Ciudad del Este, $122.

FAMOUS PARAGUAYANS

Paraguay acclaims—despite their reputations as dictators—the first three leaders of the independent nation: José Gaspar Rodríguez de Francia (El Supremo, 1761?–1840), his nephew Carlos Antonio López (1790–1862), and the latter's son Francisco Solano López (El Mariscal, 1827–70). Of nearly equal prominence is José Felix Estigarribia (1888–1940), president and Chaco War commander. Manuel Gondra (1872–1927), twice president of Paraguay, was a literary critic, educator, and diplomat. Eusebio Ayala (1875–1942), another president, was an authority on political economy and international law. Alfredo Stroessner (b.1912) was president of Paraguay from 1954 to 1989.

Leading writers include Juan Silvano Godoi (1850–1926), Manuel Domínguez (1869–1935), Pablo Max Ynsfrán (1894–1972), Justo Pastor Benítez (1895–1962), former president Juan Natalicio González (1897–1966), Gabriel Casaccia (1907–80), Augusto Roa Bastos (1917–2005), and Hugo Rodríguez Alcalá (b.1917). Pablo Alborno (1877–1958) and Juan Domínguez Samudio (1878–1936) were noted artists, while in music, José Asunción Flores (1904–1972) is best known.

DEPENDENCIES

Paraguay has no territories or colonies.

BIBLIOGRAPHY

Buckman, Robert T. Latin America, 2005. 39th ed. Harpers Ferry, W.Va.: Stryker-Post, 2005.

Calvert, Peter. A Political and Economic Dictionary of Latin America. Philadelphia: Routledge/Taylor and Francis, 2004.

Foster, Dean Allen. Global Etiquette Guide to Mexico and Latin America. New York: J. Wiley, 2002.

Health in the Americas, 2002 edition. Washington, D.C.: Pan American Health Organization, Pan American Sanitary Bureau, Regional Office of the World Health Organization, 2002.

Heenan, Patrick and Monique Lamontagne (eds.). The South America Handbook. Chicago: Fitzroy Dearborn, 2002.

Miranda, Carlos R. The Stroessner Era: Authoritarian Rule in Paraguay. Boulder, Colo.: Westview Press, 1990.

Nickson, R. Andrew. Historical Dictionary of Paraguay. 2nd ed. Metuchen, N.J.: Scarecrow Press, 1993.

PARAGUAY

Republic of Paraguay

República del Paraguay

COUNTRY OVERVIEW

LOCATION AND SIZE.

Paraguay is located in the center of the southern half of South America, northeast of Argentina. It is also bordered by Bolivia to the northwest and Brazil to the east. With an area of 406,750 square kilometers (157,046 square miles), Paraguay is almost as large as the state of California. Asunción, the nation's capital, is situated on the easternmost point of the Argentine border, just south of the center of Paraguay. The nation is landlocked, which sets it apart from virtually all of Latin America, and could be seen as a detriment to the nation's economy. Major cities that provide river ports, such as Asunción, Villeta, and Encarnación (both to the south of Asunción), help to alleviate the economic consequences of the nation's lack of coastline. Ciudad del Este, a commercial center on the Parana River, is another important city to the east of the capital. Paraguay's Argentine border to the southwest measures 1,880 kilometers (1,168 miles), its Bolivian border is 750 kilometers (466 miles), and the Brazilian border is 1,290 kilometers (802 miles).

POPULATION.

Recent estimates place the population of Paraguay at 5,734,139 (July 2001). Due to its Spanish colonization and heritage, at least 90 percent of the population is Roman Catholic and 95 percent of the population is mestizo (a racial mix of Spanish and Amerindian) This makes the population surprisingly homogenous in comparison to most of Latin America. The mestizo population has strong pride in their Guaraní (the primary indigenous group and culture of Paraguay) ancestry and traditions. Spanish was the only official language until 1992 when Guaraní also became an official language. Guaraní is spoken by approximately 90 percent of the population. Spanish is used predominantly in business and government matters, but both languages are utilized in education. At least half of the population is bilingual.

People between the ages of 0 and 14 make up 39 percent of the population, while those between the ages of 15 and 64 constitute 56 percent. At least half of this second age group is below 30 years of age, making two-thirds of the population younger than 30. The population of Paraguay grew from 2.4 million to 4.3 million between 1970 and 1990 (80 percent), and grew 30 percent from 1990 to 2000. With a yearly population growth rate of 2.6 percent as of 2001, the population is estimated to reach 6,980,000 by 2010. The average life expectancy of the population is 73.92 years (2001 est.).

Migration to the urban areas of Paraguay is common, but more than half of the nation's population still lives in rural areas, mostly in the east. Only about 5 percent of the population lives west of the Paraguay River. High rates of emigration from 1950 to 2000 have contributed to the large percentage (40 percent) of Paraguayans living outside their country and help to alleviate the high growth rate. Many Paraguayans have historically emigrated to Argentina, particularly during and after the Chaco War of 1936 and the Civil War of 1947, and also during the 1950s and 1970s. Paraguay has one of the world's lowest population densities. The nation's most densely populated area is Asunción and its surroundings. The Colorado Party's clientelistic agrarian reform (giving unused land outside of Asunción to the party's supporters in exchange for political favors or funding) of the 1960s helped to alleviate overcrowding in the capital by drawing peasant labor into previously unused territory. However, the effects were not lasting and overcrowding is still a problem today.

One of the most surprising features of the Paraguayan population is its high literacy rate of more than 92 percent despite its poorly-developed education system. School is mandatory only between the ages of 7 and 13 and this requirement is not well enforced. There are insufficient numbers of primary and secondary schools and severe shortages of educational resources, especially in rural areas. The shortage is worst at the secondary level. There are only 2 universities, vocational schools are concentrated in the main cities, and there is a severe shortage of teaching resources throughout the nation.

OVERVIEW OF ECONOMY

Paraguay's geographic location has had a large impact on its economic development. Being one of only two landlocked nations in all of South America, Paraguay has had to rely on its rivers for transportation and trade routes and has developed a sufficient network of roads, highways, railways, and airports to increase trade possibilities. The Paraguay and Parana Rivers provide direct routes to the Atlantic Ocean through Brazilian territory, and the U.S., Japan, Germany, Italy, and the Netherlands now use these routes for imports and exports. Paraguay has also turned to its rivers for a power source. In fact, due to its substantial hydroelectric power, the nation is on its way to becoming one of the world's largest producers of power. In addition to commerce and power production, Paraguay also relies on agriculture, but only one-fifth of the nation's land is arable and even less is actually farmed. Still, almost half of the nation's workforce is in agriculture and particularly subsistence farming (growing only enough to survive). The country is self-sufficient in food production, but the agricultural sector has suffered from unpredictable weather and climate conditions and changing world market prices.

Paraguay also relies heavily on Ciudad del Este, the world's third-largest retail center. This city is a border town on the Parana River (on the Brazilian border) and as a result is susceptible to heavy smuggling. Crime is also a serious problem there and the police force of Ciudad del Este is suspected of widespread corruption. Store-owners have hired guards to monitor their stores around the clock, and these guards outnumber police officers by more than 5 to 1. The mayor even has 4 bodyguards at all times. Theft is prevalent. Crime is a less extreme problem in Asunción.

Paraguay has strong commerce, power, agriculture, and retail sectors, but most of the economy's strengths tend to be focused in small areas. The retail sector is concentrated in Ciudad del Este, tourism is concentrated in the capital, and the power industry, trade, and transport are concentrated along the Paraguay and Parana Rivers. Despite these specific areas with strong, focused economic sectors, Paraguay is still one of South America's less-developed nations in an economic sense.

General Alfredo Stroessner, president from 1954 to 1989, encouraged private investment at both domestic and international levels, especially in commercial agriculture ventures. He emphasized cotton and soybean production through government favors in terms of land and money. Before the 1970s, public investment was low and focused mainly on the expansion of infrastructure and communications, but after the 1970s, several new state-owned businesses increased public sector spending and employment rates. During the 1970s and early 1980s, Paraguay offset its crippling foreign debt and trade deficit with international loans, but paying back these loans in the years to come weakened the national economy. The economic growth of the 1970s did not benefit the entire nation equitably, but did benefit the police and military, as well as the upper class involved in business, agro-industry, and industry. The military and the agro-industrial elite both had ties to the Colorado Party in power. The working class was held back by low wages and limitations placed on the activities of labor unions.

Foreign investment has played a substantial role in Paraguay's economic growth, particularly in the 1970s and 1980s. Joint ventures with Brazil and Argentina in building hydroelectric power plants gave Paraguay a surplus of power and made it a leading power producer. Also, the government tried to attract foreign investors through low income taxes and tax exemptions during this time.

The years of President Andres Rodriguez (1989-93) were marked by reforms implemented to ensure transition to a market economy. He abolished the multiple exchange rates , low-cost subsidies to state enterprises, and export taxes. He also privatized several state enterprises and broke up state monopolies in telephone, water, and energy. Ecuador's airline, Cielos de America, bought 80 percent of the national Paraguayan airline; the remaining 20 percent was reserved for employees. The trade deficit caused by the international loans of the early 1980s was severely exaggerated by inaccurate figures stemming from large-scale smuggling, until Rodriguez's reforms weakened the causes of smuggling.

The 1990s were marked by substantial foreign investment in the form of multinational corporations . Joint ventures using foreign capital to spur domestic development include hydroelectric power plants built with Argentina and Brazil, cotton mills and spinning plants built with Italy and Brazil, and foreign oil companies searching for possible drilling sites. The late 1990s have been a time of consolidation in the transition to a market economy, but the national economy is still underdeveloped in comparison to other Latin American nations.

POLITICS, GOVERNMENT, AND TAXATION

According to the 1992 Constitution, Paraguay is a representative democracy that embraces separation of powers. The government has 3 branches: the legislative, the executive, and the judiciary. The legislative branch, called the Congress, is comprised of the Senate (with at least 45 members) and the Chamber of Deputies (with at least 80 members). Members of Congress are popularly elected from Paraguay's 17 departments (states) for 5-year terms that coincide with the president's 5-year term. The president is chief executive and Commander in Chief of both the armed forces and the police. Emergency powers to declare a state of exception (suspending the constitution) in times of war or unrest belong to both the president and Congress.

The judiciary includes a Supreme Court of 9 Supreme Court Justices, who are appointed by the president and the Senate for 5-year terms, which are renewable. Judges cannot be removed after 2 consecutive terms until they reach retirement age. The Supreme Court controls its own budget and heads a system of lower courts and magistrates.

On the local level, each of the 17 departments popularly elects a governor and a departmental board, as well as local mayors. The Electoral Code ensures that everyone over 18 years of age votes, and congressional seats are filled by a proportional representation system (a proportional representation system ensures that one area of the nation is not over-represented or under-represented in comparison to another in terms of population).

The Paraguayan government has played a large role in the nation's economy, most notably in the last half of the 20th century. In the 1960s, the government used incentives to encourage the settlement of undeveloped or unused rural areas, to alleviate overcrowding in the Asunción metropolis, and to stave off Brazilian territorial advance (Brazil and Paraguay have a history of border disputes) in the area. Most of the land sold during this agrarian reform was to people with connections to the ruling Colorado Party. These landowners produced large quantities of soybeans for profitable international agro-industries. Also when the Colorado Party replaced the Liberals in power in 1954, officials directed government favors and funds to soybean and cotton producers, which developed a strong system of clientelism. While the Colorado Party is responsible for the birth of heavy cotton and soybean production, which spurred growth in the agricultural sector and now account for two-thirds of all agricultural exports, it also encouraged the widespread exploitation of peasant labor. The party's clientelistic focus on the elite widened the gap between the small upper class and the poor masses. The Colorado Party, which has strong military ties, has dominated Paraguayan politics and government for the last half of the 20th century.

Beginning in the 1970s, the Stroessner government (1954-89) used low income taxes and tax exemptions to attract foreign capital and foreign investment. The government handed out state subsidies for farming as well. The Rodriguez government (1989-93) continued to encourage foreign investment while implementing market reforms, beginning in 1989. Rodriguez put an end to the multiple exchange rates, expensive subsidies for state enterprises, and export taxes. The government also privatized several important state-run companies.

The Stroessner government placed strict controls on labor unions and maintained low minimum wages. As a result of Paraguayan labor laws, the U.S. placed trade restrictions on Paraguay but continued to trade with the country as a part of its Cold War policy. Labor union activism was low in Paraguay until the very late 1980s, when unions began to garner more political influence. As several labor unions emerged, particularly the Unitary Workers Central, the United States and Paraguay reinstated the Generalized System of Preferences (GSP). The GSP is a trade incentive package making trade between developed nations and developing nations profitable for each party. The 1990s spurred the Paraguayan Workers Confederation and the National Workers Central, and these 3 unions are now strong political interest groups in Paraguay. The new Constitution of 1992 embraced workers' rights, protecting the right to strike and the freedom of association.

The 1990s have been a decade of fast political changes including: an attempted coup, President Cubas's implication in the assassination of his vice president Luis María Argaña, Senate head Luis Gonzalez Macchi stepping up to assume the presidency, and the election of liberal vice president Julio Cesar Franco. Despite this political instability, the 1990s were a decade of heavy government involvement in economics. Paraguay liberalized and deregulated much of its economy, eliminating foreign exchange controls, reducing tariffs , establishing tax incentives and exemptions to stimulate foreign investment, creating a stock market, and restructuring the tax system. Paraguay has South America's least burdensome tax system. There is no personal income tax, business taxes are limited, and there is a value-added tax (VAT) of 10 percent. Investors in their first 5 years are eligible for tax exemptions of 95 percent and the duty -free import of capital goods . Corporate taxes are 30 percent but reinvested profit is only taxed 10 percent, which also encourages long-term investment and growth.

Today, there are 2 main political parties, each of which is an alliance: the Colorado Party (formally called the National Republican Association/Colorado Party) and the Democratic Alliance, which includes the EN (Encuentro Nacional) and the PLRA (Partido Liberal Radical Auténtico), a left-wing radical party. Both the Colorado Party and the Democratic Alliance formally support social equality and oppose the exploitation of the working class. The focus on working class economic issues has been magnified in the 1990s, as labor unions and organizations have gained power.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

In economic terms, Paraguay has depended heavily on its rivers, especially in the 20th century. Waterways provide 3,100 kilometers (1,926 miles) of transport paths. Most international trade flows through the Paraguay and Parana Rivers, which connect Asunción to the Atlantic

Ocean through Brazilian territory. These 2 rivers have helped alleviate the consequences of Paraguay's land-locked location. Paraguay's Flota Mercante del Estado, a merchant marine owned and operated by the state, has transported cargo on the Paraguay and Parana Rivers since 1945.

Towards the end of the 20th century, more and more freight has been carried along roads, notably to Buenos Aires, Argentina, and Santos and Paranaguá in Brazil. Paraguay has a sufficient network of roads and bridges, but about half of the roads are still unpaved. 15,000 of the 29,500 kilometers of roads were paved as of 1999. Major highways connect Asunción to Ciudad del Este, Paranaguá, and Encarnación. Another highway runs from Villa Hayes across the Chaco region to the Bolivian border.

Paraguay's railway system is limited. The railway Ferrocarril Presidente Carlos Antonio López, which stretches 441 kilometers (274 miles) from Asunción to Encarnación, makes up much of the railway system in Paraguay. Railways total 971 kilometers (603 miles), which includes privately-owned railways as well. The nation's airport network, however, is much broader. With 937 airports, Paraguay's most notable airports are the government-owned Líneas Aéreas Paraguayas, opened in 1962, and the modern international Silvio Pettirossi, established in 1980 near Asunción. Only 11 airports had paved runways as of 2000. Combined, Paraguay's network of roads, rivers, railways, and airports facilitates its strong trade and transport industry.

Paraguay has substantial economic potential in hydroelectric power, which accounted for 99.79 percent of the nation's electricity in 1999. Paraguay depended on thermoelectric power plants, located in the capital, that burned wood and oil until 1968. That year, the Acaray hydroelectric power plant was built, and there have also been large joint ventures in hydroelectricity with Argentina and Brazil. The government-owned National Power Company distributes all electricity.

The communications network in Paraguay is limited in terms of its population size. There is insufficient telephone service and poor connections outside of Asunción and its surrounding area. Still, much of the population has access to newspapers, radios, and televisions, and depends on them for news and information. The nation has 4 television stations (2001), 79 radio stations (1997), and 4 Internet service providers (1999). Foreign investment has pushed the communications technology of the nation ahead in recent years. In the mid-1990s, for example, PanAmSat signed a 15-year contract with 2 Paraguayan television stations to provide satellite service.

ECONOMIC SECTORS

In Paraguay, while agriculture contributes 28 percent of the GDP, 21 percent comes from industry and 51 percent comes from services (1999 est.). Some 45 percent of the population depends on agriculture, particularly subsistence farming. Agricultural concentrations include livestock, lumber, and a variety of crops, which depend heavily on the varying climate and conditions. The industrial sector experienced a boom in hydroelectric power and construction during 1980, but since then hydroelectricity accounts for most of the industrial sector output. Trade and transport dominate the service sector, which has yet to fully realize its potential in areas such as banking and tourism. The tourist industry is developing in Asunción, but outside of the capital, tourism is virtually nonexistent.

AGRICULTURE

Agriculture provides 28 percent of Paraguay's GDP, but 45 percent of the population actually depends on agriculture and subsistence farming. This agricultural activity utilizes less than 6 percent of the nation's most arable land, concentrated in the east. Until 1970, the nation depended heavily on the production of meat, tobacco, and yerba maté (a tea). These highly-emphasized products have now been replaced by soybeans and cotton grown largely in the east.

Soybean production became important during the agrarian reform policies of the 1960s. The government sold cheap land to affiliates of the Colorado Party, which dominated the government at that time. These landowners were involved in highly profitable international agro-industrial agreements that called for large-scale production of soybeans. The government claimed that the agrarian reform would help alleviate overcrowding in the capital while developing unused land in the east. Cotton also emerged as a dominant export. The Colorado Party encouraged cotton production through government favors, but in the process encouraged the exploitation of peasant laborers as well. Nevertheless, soybeans and cotton now account for two-thirds of the nation's agricultural exports.

Cotton produced in Paraguay had generally been exported unprocessed until the 1990s. In the mid-1990s, an Italian-Paraguayan group built a US$10 million computerized cotton-spinning plant just outside of Asunción. Spinning the cotton domestically adds 140 percent profit to its export. It is exported primarily to Italy and Brazil. Brazilian investors have also built and renovated many other cotton mills in Paraguay. If the cotton industry continues to develop and farming is mechanized, many rural farmers who grow cotton may be put out of work.

Other important agricultural goods include coffee, corn, rice, wheat, citrus fruits, sugarcane, and peanuts. Paraguay produces some marijuana as well. Paraguay's productive agricultural sector makes the nation practically self-sufficient in food products.

Livestock is raised in the west, particularly in the Chaco region. Though pigs, sheep, horses, and chickens are raised, by far the most important livestock is cattle. Meat, dairy products, and hides are used both domestically and for export. Timber is another important export. Though Paraguay has utilized its rivers for transport, it has not yet developed a commercial fishing industry to tap into the abundance of fish.

INDUSTRY

Despite high industrial growth rates in the late 1970s and 1980s, manufacturing and mining have remained undeveloped. Paraguay manufactures little more than its own food products. The industrial boom climaxed in the middle of 1979 and was centered in hydroelectric power and related construction projects. Today the industry sector accounts for 21 percent of the national GDP. Of that 21 percent of GDP, more than 75 percent comes from the manufacturing of such goods as cement, sugar, textiles, beverages, and wood products. Manufacturing provides jobs for 13 percent of the workforce . Fully manufactured exports account for only 5 percent of all exports, but semi-processed agricultural goods make up 72 percent of all exports.

ENERGY.

Paraguay's energy industry has thrived on its hydroelectric potential. Hydroelectric power replaced thermo power (power from burning wood and oil) around 1970. In 1968, Asunción's Acary hydroelectricity plant began operating, and in 1973 Paraguay and Brazil together built the US$20 billion Itaipu plant by the Parana River. This joint venture made history as Brazil bore most of the cost and Paraguayan electricity production grew 15-fold from 1970 to 1990. Initial arrangements that benefited

Brazil were later modified in 1985 to ensure that Paraguay received fair compensation. Paraguay also built a dam on the Parana to create a reservoir that spans a total of 870 miles in Paraguay and Brazil. The 1990s were marked by Paraguay's joint venture with Argentina to build a hydroelectric power plant on a chain of islands in the Parana. Combined, Paraguay's ventures in hydro-electric power have ensured that the nation will become one of the world's top producers of hydroelectric power in the 21st century.

In 1999, Paraguay generated 51.554 billion kilowatt hours (bkwh) per year, but only consumed 1.915 bkwh that year. In 1999, Paraguay sold 46.03 bkwh of power for export, primarily to Brazil and Argentina, making power a large source of export earnings. Itaípu's earnings reached a record US$420 million in 1998 (equal to 15 percent of all exports) and Brazil purchased 97 percent of the plant's power. Several plans (including joint ventures with Argentina and Brazil) are being developed for expanding existing hydroelectric power plants and constructing new ones in the coming decade.

CONSTRUCTION.

In the late 1970s and early 1980s, construction grew rapidly, with a drastic rise in hydroelectric dam and power plant projects, infrastructure projects, and housing development in Asunción. The construction industry's resources were primarily found locally: lime, sand, wood, and stones. Since the mid 1980s, however, construction has fluctuated dramatically as old hydro-electric power plants and infrastructure projects were completed and then new projects were begun.

In response to a growing construction industry, the nation has invested large sums of money in expanding and modernizing the production of cement, metal, and steel. The government completed a US$200 million expansion of its largest cement plant, at Vallemi, in 1986. The plant had previously used outdated production techniques and had been operating well under capacity. This expansion was financed by French banks, but ended up burdening the economy since it still operated well below capacity and was over 500 kilometers outside of Asunción, far from most industrial activity. The government also owned Acepar, the largest steel plant, in the 1980s. Acepar alone is capable of producing 5 times the amount of steel Paraguay uses each year, and there are other large steel producers in the nation as well. Unfortunately, most development in construction-related industries like cement and steel took place after most of the nation's biggest hydroelectric and infrastructure projects. However, similar projects in the late 1990s and early 2000s are capitalizing on these industries.

MANUFACTURING.

Manufacturing of steel, cement, plastic, and wood products has risen since the late 1970s due to construction projects (hydroelectric power plants, infrastructure, and urban housing). Fully manufactured exports account for only 5 percent of all exports, but semi-processed agricultural goods make up 72 percent of all exports. Still, manufacturing is underdeveloped in Paraguay, and is characterized by many small-or medium-sized firms. The few larger firms are primarily foreign owned, and few companies operate at full capacity. Food, beverages, and tobacco have formed the largest manufacturing subsector; agriculture and lumber manufactures form the second-largest subsector; and textiles, clothing, leather, and shoes form the third.

MINING.

Paraguay also has a small, undeveloped mining industry, concentrated along the Paraguay River where most mineral deposits have been found. Gypsum, limestone, and clays are the most heavily used minerals and are exported mostly to the building trade. Other major minerals near the river include peat, marble, salt, copper, bauxite, iron, and uranium. Other regions of the nation that have not been fully utilized show deposits of manganese, malachite, azurite, feldspar, mica, and talc. Though resources are varied and local construction mines many resources itself, the mining industry still has not been fully developed.

SERVICES

The service sector accounts for 51 percent of the nation's total GDP. The most vital component of the service sector is trade and transport. In terms of trade the nation has profited greatly from its 2 major rivers, the Paraguay and the Parana, particularly in the last half of the 20th century. Other service industries do not yet play a significant role in the national economy. The finance industry is small and state-dominated, and the nation has not yet established a profitable tourism industry. With the exception of a small but developing tourism industry in Asunción, tourism-related business is virtually nonexistent and plays an insignificant role in the economy elsewhere.

TRADE AND TRANSPORT.

The Paraguay and Parana Rivers have allowed Paraguay to overcome its landlocked handicap in terms of trade and commerce. The 2 rivers join Paraguay to the Atlantic Ocean through Brazilian territory and allow for the export of such items as soybeans, cotton, meat, and timber. Aside from neighboring partners Brazil and Argentina, Paraguay's principal trading partners are in Europe: Germany, Italy, the Netherlands, and Switzerland. Paraguay also imports from Japan and the United States. All of these export and import partners utilize the Paraguay and the Parana trade routes. The nation's numerous airports, as well as its rail and highway networks, facilitate the development of this sector of the economy. Perhaps the most profitable variety of trade in Paraguay is re-export . Paraguay is widely known for its re-exporting of goods: over 50 percent of all goods imported are then re-exported for profit, with little or no change made to them. Smugglers also use this practice in the informal economy .

RETAIL.

Paraguay has a developing retail sector in the capital, but the biggest retail center lies in Ciudad del Este, a city on the Brazilian border. Ciudad del Este grew out of a merchants' town and now has more than 6,000 shops over 20 blocks in the heart of the downtown area alone. The streets are heavily peppered with tiny shops, table vendors, and even van vendors and walking vendors. These "shops" are responsible for at least one-third of all money circulating in Paraguay, and have put, on average, US$1 billion in Paraguayan merchandise into Brazil each month during the 1990s. The richest city in the nation, Ciudad del Este is the world's third-largest commercial center, behind only Miami and Hong Kong. Ciudad del Este has a large Asian population, with Chinese who specialize in toys, house wares, and school supplies, and Koreans who specialize in electronics. The city is also responsible for a great deal of trade with Eastern Asia. The smuggling of goods into Brazil and other countries is a big problem, though. Outside of Ciudad del Este, the retail sector in Paraguay is not well developed.

FINANCE.

The finance sector of Paraguay is underdeveloped. There are 2 main state banks: the Banco Central del Paraguay and the Banco Nacional de Fomento. The latter specifically handles credits and grants to agricultural ventures and entities in the manufacturing and lumber industries. Some international banks from other parts of Latin America, Europe, and the United States also have branches in Paraguay. The government encourages foreign investment and in the 1990s began developing a stock market, but there is still much more potential for growth in the finance sector.

TOURISM.

Tourism in Paraguay has developed very little outside of Asunción, despite the potential of attractions such as Ciudad del Este's retail area and ruins of Jesuit missions. The nation has only 11,000 beds (more than half in Asunción), 34 percent of which are in luxury or five-star hotels, and 52 percent of which are in three-or four-star hotels. Small establishments account for the remainder. Tourism brought in US$144 million annually in the late 1990s. Just over 400,000 tourists visit Paraguay each year, 70 percent of which come from Brazil, Argentina, and Uruguay. Ecotourism —tourism that focuses on nature and wildlife observation—is also growing.

INTERNATIONAL TRADE

Paraguay's main trading partners are Brazil, Argentina, the United States, the Netherlands, Germany, Italy, Japan, and Switzerland. Paraguay exports soybeans, meat products, cotton, oils, and timber principally to

Brazil and Argentina, as well as Germany, the Netherlands, Italy, and Sweden. Exports in 2000 totaled US$3.5 billion (not including the black market ). Most imports come from Brazil, Argentina, the United States, and Japan, including machinery, petroleum and petroleum products, chemicals, lubricants, electronics, consumer goods , and cars. Local industries rely heavily on these imported goods. Imports in 2000 totaled US$3.3 billion (not including the black market). Smuggling has been prevalent in Paraguay, and in the 1980s smuggling reached new heights, severely skewing the nation's official trade figures. Computers, sound equipment, cameras, liquor, and cigarettes are among the most popular items smuggled across the Brazilian and Argentine borders. Smuggling decreased somewhat in the 1990s, but the informal economy is still estimated to be at least as large as the formal economy.

U.S./Paraguayan economic relations are strong as of the early 21st century. Each year the United States imports more than US$40 million of goods from Paraguay and exports approximately US$1billion in goods to Paraguay. The United States has more than a dozen large multinational firms with Paraguayan subsidiaries, including firms in the computer, manufacturing, agro-industrial, banking, and service industries. The U.S. also has more than 75 businesses with agents in Paraguay. The Cold War of the 1970s and 1980s actually worked in Paraguay's favor. Despite numerous human rights violations, Paraguay still received substantial aid and trade privileges from the U.S., provided that Paraguay align itself with the United States against the Soviet Union. The U.S suspended its Generalized System of Preferences—a trade agreement with Paraguay—from 1987 to 1991, due to poor labor laws and working conditions in Paraguay.

Paraguay does belong to several international trade agreements and organizations. Aside from its trade agreement with the U.S., Paraguay also belongs to Mercosur, a free trade and common market agreement between the Southern Cone nations (Paraguay, Uruguay, Argentina, and Brazil). Joining Mercosur in 1991 benefited Paraguay greatly. Trade between Mercosur members increased from US$5 billion in 1991 to US$17 billion in 1996, and the Mercosur market accounted for 5 percent of the world's total GDP in the late 1990s, making the Mercosur market very attractive to foreign investors. Paraguay is a member of the Latin American Integration Association (formerly the Latin American Free Trade Agreement) as well.

MONEY

The Paraguayan currency has been remarkably stable in comparison to most of South America. The most significant hindrance to economic stability in Paraguayan history was the War of the Triple Alliance. This war, from 1865 to 1870, killed most of the nation's male population and devastated the national economy. Soon after, in 1870, the nation began reconstruction efforts and rebuilt the economy. The economy finally found stability again in the late 1910s and early 1920s.

The 1940s and 1950s were marked by price instability, and in response the government established the Banco Central, a central bank intended to perform many tasks. Its responsibilities included regulating credit, promoting economic activity, controlling inflation , and issuing currency. It also regulated banks (commercial, investment, and mortgage banks), savings and loans, finance companies and institutions, and capital markets. Further, the bank administered monetary controls and price stability. The Banco Central was successful until the 1980s. The 1970s and early 1980s showed rapid growth attributed to joint hydroelectric power ventures with Argentina and Brazil, but as the power plants were completed, the rapid economic growth came to an abrupt halt. The stable prices, credit expansion, and exchange rates of the 1960s and 1970s were replaced by the increasing inflation in the mid 1980s. By 1988, inflation had risen more than 30 percent. The Central Bank successfully tamed inflation with rising interest rates during the 1990s.

The growth of the 1970s allowed Paraguay to avoid the hyperinflation and the balance of payments crises that plagued the rest of the Southern Cone (Brazil, Argentina, and Uruguay). Large exports of soybeans and cotton also helped maintain growth and stability in the economy during this time, with the exception of a brief period from 1981 to 1983, when GDP fell more than 15 percent because of a combination of factors. Adverse weather shrank agricultural exports, currency in neighboring Brazil and Argentina was suffering devaluation , and trade relations with Brazil and Argentina were unfavorable.

From 1960 to 1982, the guaraní was consistently valued at 126 guaraní to the U.S. dollar. In 1982 a new foreign exchange system was introduced using multiple fixed exchange rates , but the new system was unsuccessful and the government implemented a free market foreign exchange system once again in 1984. The 1984 system, still in effect, strongly favors private enterprise and foreign investors.

The 1990s were a time of mixed results in economic development. The banking system is developing but still small. In 1992, the government approved measures to develop a stock market, and in 1995 Bolsa de Valores, the Asunción Stock Exchange, was created. It showed slower growth than expected at first, but now the stock market has grown and expanded to include many foreign corporations. Countries with companies listed the United States, South Africa, and Japan.

From 1993 to 1995, the GDP per capita increased by 18 percent and inflation dropped from 20 percent to 15 percent. In the late 1990s, though, Paraguay suffered from the devaluation of the currencies of other Mercosur member nations, particularly Brazil in 1998 and 1999. Still, the Paraguayan economy shrank only 0.06 percent in response to Brazil's devaluation of the real (Brazilian currency). Paraguay's currency value fluctuated little in the late 1990s, though many economists expected it would, due to severe political instability. The 2000 exchange rate showed G3,502 equal to US$1.

POVERTY AND WEALTH

Paraguay has an extreme gap between the small upper class and the large lower class, and there has historically been virtually no social mobility. Paraguay has the most unequal distribution of land in the region. Less than 10 percent of the population owned and controlled over 75 percent of the nation's land in the late 1990s, leaving much of the large rural population landless and living in extreme poverty. In the mid-1990s, nearly half of the farmers in Paraguay did not own land, according to Ramón López and Alberto Valdés, writing for the World Bank. The upper 10 percent of the population accounts for 46.6 percent of income and consumption, and

the upper 20 percent make up 62.4 percent of all income. The poorest 60 percent of the population earns less than 20 percent of the nation's income.

The extreme gap between the small upper class and the large lower class was widened by the clientelism of the Colorado Party during the last 50 years. During the 1960s, by selling most unused land to Colorado Party affiliates, the small elite class came to include a small, newly established agro-industrial elite class. These elites underpaid workers to maximize their own profits. Cotton and soybean producers (the elite landowners) continued to underpay peasant workers well into the 1980s, and the government kept labor unions weak and ineffective. Although the 1990s were a time of newly-developed strength for labor unions, the gap between the rich and the poor did not change significantly.

There are not enough schools or educational resources throughout the nation, but shortages are worst in poor, rural areas. Rural areas also have less effective health care available to them. Virtually all urban areas have access to safe water and good medical care, but only 15 percent of the rural population has access to safe drinking water and only 42 percent of the rural population has access to medical care. Despite these problems, it is important to note that Paraguay's government does subsidize education and health care. The government finances schools and makes teacher training courses available.

Paraguay's Social Insurance Institute (SII) oversees the social security system. Some 9.5 percent of employees' own earnings, 16.5 percent of employers' earnings, and 1.5 percent of government funds go toward social security. The Institute offers pensions for old age, invalidity, maternity, sick leave, and on-the-job injury. The SII also runs its own hospitals and health clinics.

Though as a rule there is little socioeconomic mobility in Paraguay (especially in agriculture), the commercial city of Ciudad del Este is the exception. In Ciudad del Este, a man pushing handcarts can work for US$15 a day, save up enough capital to buy a small spot on the street sidewalk and a table to sell goods. Then he can save enough money to buy a van and gradually work his way up the economic ladder.

WORKING CONDITIONS

The Stroessner government placed strict controls on labor unions and maintained low minimum wages from 1960s through the 1980s. As a result, labor union activism was low in Paraguay until the very late 1980s, when unions began to garner more political influence. As several labor unions emerged around 1990, the Unitary Workers Central, the Paraguayan Workers Confederation, and the National Workers Central all became strong political interest groups in Paraguay. The Paraguayan Workers Confederation (CPT) had 60,000 official members as of 1985, but claimed to represent 90 percent of the workforce. The CPT refused to comply with workers' strikes due to government control, and the union lost its membership in the International Labor Organization (ILO). Despite this new union activism in the 1990s, labor laws have improved very little. Only a small percentage of the workforce receives benefits like pensions, pay in times of illness, and medical care. Wages have only slightly increased in the late twentieth century.

Roughly 45 percent of the labor force works in agriculture, largely in subsistence farming. Though some of these workers receive government subsidies, they have no benefits or security and suffer from the changing climate and the fluctuation of the world market. The few workers who do receive benefits work in urban areas. As of 1998, unemployment had reached 12 percent, up 4 percent from 1996. An increasingly industrialized economy continues to threaten the jobs of farmers, still a considerable portion of the workforce.

Women in the workplace earn substantially less than men do, despite equal or greater education. Women with 6 years of education or less earn only half of men's salaries in equivalent jobs, while women having 7-13 years of education earn only 60-70 percent of men's salaries for the same positions. Women outnumber men in professional and technical occupations, but women occupy only 20 percent of the nation's administration and management jobs and only 5 percent of higher-level occupations. Social security does pay women on maternity leave half of their salary for a period of 12 weeks.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1500s. Paraguay is inhabited by Guaraní Indians before the Spaniards arrive.

1608. Spanish Jesuits take root in Paraguay after several failed colonization attempts. The Jesuits control reducciones (centers of religious conversion for the Guaraní Indians). These settlements are also centers of labor for agricultural production, manufacturing, and trade.

1767. Spanish landowners—envious of the military, political, and economic control of the Jesuits—expel the Jesuits to regain control of the area.

1776. Establishment of Viceroyalty of Rio de la Plata by the Spanish.

1811. Paraguay revolts against Spain to become a republic.

1865-1870. War of the Triple Alliance (against Brazil, Argentina, and Uruguay) decimates Paraguay's male population.

1870. New constitution begins reconstruction after war, but dictatorial oppression continues.

1932-1935. Chaco War against Bolivia: Paraguay wins western territory.

1954. General Alfredo Stroessner becomes president and remains in power until 1989.

1968. Acary power plant begins operation and Paraguay's national power production increases 15-fold from 1970-1990.

1970s. Government encourages foreign investment through tax incentives.

1970s. Soybeans and cotton replace tannin, meat, yerba maté, and tobacco as primary agricultural exports.

1970s-1980s. Despite serious human rights violations under the Stroessner regime, the U.S. continues to provide military aid because of Cold War policy.

1973. Itaipu hydroelectric power plant construction begins (finished in 1982) with Brazilian cooperation.

1980s. Foreign loans accruing interest begin to severely burden the economy.

1987. Generalized System of Preferences (trade agreement with U.S.) suspended because of poor labor laws.

1989. General Andrés Rodríguez leads coup that overthrows the Stroessner regime. Rodríguez becomes president in a multi-candidate election and announces that democracy has come to Paraguay. He enacts sweeping reforms to implement a market economy.

EARLY 1990s. Labor unions begin to grow in numbers and in political influence.

1991. Constituent Assembly elected to draft new constitution.

1991. Paraguay, Uruguay, Argentina, and Brazil sign Mercosur (a free trade agreement among the countries of the Southern Cone). Generalized System of Preferences reinstated between Paraguay and the United States.

1992. New constitution takes effect, making Paraguay a representative democracy. Government approves laws to encourage foreign investment and establish a stock market.

1993. Juan Carlos Wasmosy of the Colorado Party is elected as president. These elections are deemed fair and democratic by the world community.

1995. The Asuncion Stock Exchange, Bolsa de Valores, is established.

1997. Banking crisis strikes due to political corruption.

1998. Raúl Cubas Grau of the Colorado Party elected president in May.

1999. Vice president Luis María Argaña is assassinated in March and President Cubas, implicated, is forced out of office. Luis Gonzalez Macchi, the head of the senate, becomes president.

2000. Julio Cesar Franco of the Liberal Party is elected vice president. This is the Liberal Party's first major victory against the Colorado Party in 50 years.

FUTURE TRENDS

The 1990s were a time of many economic and political changes in Paraguay. The nation has become arguably more democratic and has implemented a market economy system, but still Paraguay remains one of Latin America's more underdeveloped nations in many ways. The future of Paraguay is uncertain: Paraguay faces the challenges of consolidating its semi-democracy and possibly further democratizing while developing its weak economy at the same time. Trade and transport, and imports and exports, continue to carry the Paraguayan economy as development is slow in agriculture, banking, tourism, mining, and industry.

Paraguay's membership in Mercosur is beneficial in terms of stability and growth prospects, but the other member nations are apprehensive as to whether or not Paraguay will successfully consolidate its recent democratic and market economy reforms. Spectrum Oil Corporation is currently exploring potential oil sites in and around the Chaco region. Foreign investment is steadily increasing due to government incentives and the size and success of the Mercosur market.

Furthermore, government incentives are designed to keep foreign investors' goods in the Paraguayan market, so foreign companies cannot exploit Paraguayan labor. Labor will not be simply performing tasks contributing to goods being shipped back out of the country to be sold elsewhere. The government also gives larger tax cuts to profits reinvested in the nation, which is conducive to sustaining long-term investment and development. The Paraguayan economy is growing at its most rapid pace since the late 1970s, but the growth rate is slower than some of its neighbors. Overall, prospects are good for economic growth and development in Paraguay's near future.

DEPENDENCIES

Paraguay has no territories or colonies.

BIBLIOGRAPHY

Embajada del Paraguay: Embassy of Paraguay. <http://www.magma.ca/~embapar/index.html>. Accessed March 2001.

Grinbaum, Ricardo. "In Paraguay, Smugglers' Paradise." World Press Review. Vol. 43, No. 1, January 1996.

López, Ramón, and Alberto Valdés. Poverty in Rural Latin America. Washington, D.C.: World Bank, 1996.

Pagan, Rafael A., Jr. "Paraguay Emerges as a Significant Southern Cone Market." Business America. Vol. 116, No. 8, August 1995.

Tradeport. Paraguay. <http://www.tradeport.org/ts/countries/paraguay/>. Accessed March 2001.

U.S. Central Intelligence Agency. World Factbook 2000: Paraguay. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed January 2001.

U.S. Department of State Background Notes. Background Notes: Paraguay. <http://www.state.gov/www/background_notes/paraguay_0799_bgn.html>. Accessed March 2001.

U.S. Energy Information Administration. Paraguay. <http://www.eia.doe.gov/emeu/cabs/paraguay.html>. Accessed March 2001.

U.S. Library of Congress. Paraguay: A Country Study. <http://lcweb2.loc.gov/frd/cs/pytoc.html>. Accessed March 2001.

Wilke, James W., editor. Statistical Abstract of Latin America. Volume 36. Los Angeles: UCLA Latin American Center Publications, 2000.

—David L. Childree

CAPITAL:

Asunción.

MONETARY UNIT:

Guaraní (G). Coins are in denominations of G500, G100, 50, 10, and 5. Paper currency is in denominations of G100,000, G50,000, 10,000, 5,000, and 1,000.

CHIEF EXPORTS:

Soybeans, feed, cotton, meat, and edible oils.

CHIEF IMPORTS:

Road vehicles, consumer goods, tobacco, petroleum products, and electrical machinery.

GROSS DOMESTIC PRODUCT:

US$26.2 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$3.5 billion (1999 est.). Imports: US$3.3 billion (2000 est.).

Paraguay

History & Background

A relatively small, poor, under populated, subtropical, landlocked country located near the geographical core of South America, Paraguay was originally inhabited by numerous Amerindian tribes, semi nomadic peoples linked by the Guaraní language. The modern country traces its origins to sixteenth-century settlements by Spanish explorers, accompanied by Catholic priests; these two groups introduced the Spanish language and early patterns of parochial education that have remained influential throughout Paraguay's history.

Juan de Salazar founded Asunción, the capital and major city, in 1537. Independence from both Spain and Argentina, Paraguay's larger neighbor to the southeast and southwest, came in 1811. During its postcolonial epochs, Paraguay has struggled with social, political, and economic problems that have inhibited the establishment of an effective educational system. The coup of 1989 that ended dictatorial government has brought the promise of reform, but unsettled politics have delayed substantive improvements in an underdeveloped educational system.

Economic & Demographic Influences: Paraguay, with no coastline, has commercial access to the outside world only by means of the Parana-Paraguay River system. The country's historical backwardness reflects in part its geographic isolation. In addition to Argentina, Paraguay's other contiguous neighbors are Brazil, to the north and east, and Bolivia, to the west and northwest. Other important towns are Encarnación, Ciudad del Este, Pedro Juan Caballero, Concepción, Coronel Oviedo, and Villarrica.

Slightly smaller than California, the country has geographic borders that are mainly rivers. The Paraguay River divides it into two dissimilar regions—the Oriental (East), or Paraguay proper, and the Occidental (West), a mostly inaccessible region called the Chaco, inhabited by 5 percent of the population. With just 6 percent arable land, Paraguay is 55 percent pasture and 32 percent forest. It remains one of South America's least populated areas, second only to Bolivia; historically its rate of urbanization (35.7 percent in 1965) has also been the continent's second lowest. Over half the economically active population in 1950 was involved in agriculture, and about 70 percent of the land was in holdings of small plots, 10 hectares or less. A tiny 1.1 percent of the population, as large landholders, held 87 percent of utilized land at mid-century. By the late 1990s, with a labor force of 1.8 million workers, 45 percent of the workers were still involved in agriculture. The only large city, Asunción, had by then a population of over a half million. Urban and rural population in Paraguay were roughly equal, and migrations into and out of the country roughly canceled each other out.

About 60 percent of the people still live in small country villages, but about 70 percent of all citizens reside within 120 miles (193 kilometers) of Asunción—a pattern of population clustering that assures the city's cultural dominance and has made it the natural site for the country's universities and major high schools.

During much of the twentieth century, Paraguay of all South American countries recorded the lowest rate of auto possession, the fewest miles of road, the second fewest miles of railroads, the lowest rate of telephone ownership, and the lowest use of electrical energy. Parts of the country are still inaccessible by phone or auto. In the 1990s, modern urban systems of waste disposal were still not fully adequate, and water pollution remained a problem. A 1996 estimate of urban unemployment was 8.2 percent, and rural unemployment was a great deal higher.

Paraguay's deficit economy, agrarian with a large informal sector including active traffic with Argentina and Brazil in illegally recycled imported goods, and with the prevalence of various kinds of underground micro businesses, has also hindered educational progress—as has economic dependence upon neighboring Argentina. In earlier eras Europeans and Argentines acquired vast land holdings, and before 1930 foreign owners had drained off money. At the time of World War II Asunción had no water or sewer system, no fire department, and no paved streets.

The feudal system of ownership, with fewer than one half of one percent of landholders holding three-quarters of the farmlands, has retarded democracy and progress.

The Populace: Historically, at various times, the government of Paraguay has encouraged the settlement of Mennonites from Canada and the United States and of Germans, Russians, and Middle Europeans. Nonetheless, Paraguayans have remained remarkably homogeneous, with at least 90 percent being mestizo (a mixture of Spanish and Guaraní-speaking Amerindian) and the rest mostly a mix of other white and Amerindian backgrounds. The country's estimated population of 5,300,000 in 1998—up from 4,120,000 in 1989 and 1,817,000 in 962—comprised 39 percent children ages 1 to 14; 56 percent adults ages 15 to 64; and 5 percent seniors ages 65 and older. The population growth rate in 1998 was 2.68 percent annually, with 32 births and 5 deaths per 1,000 people—and with an infant mortality rate of about 37 deaths per 1,000 live births. Average life expectancy in the country was 72.23 years in 1998, when the average Paraguayan female bore 4.26 children. This high birth rate and relatively young population, statistically speaking, have strained resources for schools.

During the period 1870-1928, between the wars, a debilitated country that had lost much of its male population and had many orphaned children withstood a succession of about 40 mostly corrupt dictators. The egregious numeric gender imbalance after 1870 triggered a pattern of family organization that put women in charge of households, with few marriages; though a numeric balance of the sexes has been restored, the country still has a 50 percent illegitimacy rate, with many unstable family structures.

Political History: Though independent since 1811, Paraguay has endured nearly two centuries of political instability marked by intermittent civil strife. Until 1870 dictators controlled the country, and thereafter, into the 1930s, elite cadres, both Conservatives and Liberals, ruled. Since 1939, a succession of autocratic presidents holding five-year terms has governed. This pattern of personal rule lasted until 1989. General Alfredo Stroessner, the durable "elected" chief of state after 1954, was a virtual dictator who saw Paraguay as defenseless and thus in need of constant military readiness. As an ardent opponent of Communism—a label that he used to brand almost any opposition—Stroessner had the economic and political support of the United States. President Nixon praised him in 1958. During his regime, the government in the name of anticommunism restricted personal freedoms and largely isolated Paraguay from the outer world. The Stroessner government censored the press but did allow opposition papers wide latitude. More than half the public treasury went to support the military, with the education budget running a distant second.

A 1989 military coup ended Stroessner's 34-year period of control. The military itself remained a strong force throughout the 1990s, and an attempted military coup was suppressed on May 18, 2000.

The Stroessner regime did make some material progress, building some schools as well as stabilizing the currency, increasing exports, and improving public services and roads. Most rural areas in Paraguay still had no effective formal patterns of public education as late as the 1960s, when one scholar called the state "a poor and frightened land." Perhaps a quarter of its people were then still unable to read or write at even a minimal level.

Overshadowed by the country's militarism and confused politics, the educational history of Paraguay has always effectively been pushed into the background.

Constitutional & Legal Foundations

Early in the twentieth century the twin legal foundations of public education in Paraguay were the law of 22 July 1909 and Article 8 of the Constitution, both mandating compulsory primary instruction for all children ages 5 to 14. That pattern has nominally persisted.

Under the constitution of 1967 as amended in 1977, the country was divided into 19 administrative departments with little autonomy, especially because the Paraguayan national government held the purse strings. Subdivisions of the departments are municipalities and rural districts called partidos. A national bureaucracy dominates public education, which has a heavily centralized administration.

The traditional ruling party in Paraguay, the National Republican Party or Colorado Party—has been the one to which all civil servants belonged and has remained a component of Paraguay's government even after the 1989 coup. Opposition parties have participated in elections since the 1980s. In 1999, peacefully elected President Luis Gonzalez Macchi presided over Paraguay's first coalition government and promised ambitious economic and institutional reforms that would, if enacted, benefit education. But the constitution of 1992 did not end intermittent chaos at the highest government levels.

Since the 1960s the universities have enjoyed autonomy, so that the government or army cannot seize a university, and students have immunity from arrest. Though such protection is largely technical because university funding is from the government itself, leaders throughout South America have tended to respect and to some degree fear student power as far back as the student revolt at the University of Córdoba in Argentina just after World War I, an incident that had far-reaching effects throughout the continent.

Educational System—Overview

In Paraguay at the beginning of the millennium, perhaps as few as 28 percent of the children will advance to secondary school, and one percent will earn university degrees. Some democratic mobility through education does occur.

During the colonial era, the upper class had sole access to formal education. Wealthy families hired tutors or sent children abroad. A few private schools operated after 1811 but hardly thrived during the nineteenth century.

Early establishment of public education in Paraguay came after 1840 under President Carlos Antonio López, who, with Mariano Roque Alonso, overthrew the dictatorship of Rodriguez Francia (1814-1840). Joint-consuls López and Alonso promoted public education by establishing a secondary school in Asunción; they also freed the children of slaves born thereafter. But López proved dictatorial, and his son and successor hapless, plunging his weak country into a bloody war (1864-1870) with Argentina, Uruguay, and Brazil. Boys of 12 fought in a Paraguayan army outnumbered 10 to 1. The war almost extinguished the male population of Paraguay and reduced the population from a half million to fewer than a quarter million people.

In 1870, in a devastated country, the literacy rate in Paraguay was perhaps as low as 14 percent.

Though education has been compulsory for children to age 14 since 1909, illiteracy was still high at mid-century. Official figures about literacy, which often conflict, gloss over the truth by counting anyone who attended primary school as literate. The literacy rate in 1962—counting citizens age 15 and over who could read and write—has been reported at just under 75 percent, though some figures suggest an illiteracy rate closer to half the population.

In any case, recent decades have shown some progress. During the 1970s and early 1980s, overall enrollment in schools grew at all levels. Reforms during the 1980s tried to improve the school systems, especially in rural areas, where inadequate facilities and materials and a lack of trained teachers were common. These reforms instituted multigrade programs to try to make better use of limited resources. In the early 1980s, more than 2,000 multigrade programs were reaching more than 55,000 students.

Such efforts seem to have had some effect. Official figures show that the literacy rate rose from 60 percent in 1960 to 80 percent by the late 1980s. Still, a mere one third of elementary students finished the first six grades, so functional literacy may not have been very high. The urban literacy rate, at an estimated 90 percent, was somewhat higher than it was outside the cities. The estimated rate in 1995 had increased to 92.1 percent, with the percentage for males (93.5 percent) being slightly higher than for females (90.6 percent).

In South America generally, where a tradition of a tripartite class structure operates, education has been the often-elusive means of the advancement of people out of the lower and into the middle class. Since the 1960s, somewhat improved education has fostered the emergence of a new "technical elite" class and has progressively moved some women into the educated and professional classes. By the 1960s women comprised a third of the work force in South America, and female university students had become commonplace. Paraguay, though relatively backward, has reflected these continental patterns.

Also on the favorable side, a tradition of respect for culture and education has existed throughout South America during the twentieth century, even among uneducated classes. In the 1960s, South American presidents included four military men, six intellectuals—lawyers, doctors, professors—and no professional politicians.

Church & State: As a country that is only 2 percent Protestant and that in 1998 was about 90 percent Roman Catholic, Paraguay has never embraced the principle of separation of church and state but does allow other religions to be practiced and to run schools. The constitution of 1870 designated Catholicism as the national religion; the Ministers of Justice, Worship, and Public Instruction were government officials; and conversion of the Indians to "Christianity and civilization" was a state-sponsored venture. In this parochial context, schools typically served jointly with churches as instruments of Catholic instruction. Several English Episcopalian missions operated in Paraguay by 1909 as part of the state-sponsored program of conversion.

As elsewhere in South America, Catholic priests—Franciscan Fathers—had accompanied the first conquerors in Paraguay. The earliest schools in the country, complements to the proselytizing efforts of the Fathers, date from the second administration of provincial governor Domingo Martinez de Irala (1542-57). The Jesuits gained official recognition in Paraguay from King Philip II of Spain in 1608 as part of the mission work of the disciples of Loyola; the expulsion of the Jesuit Fathers in 1767 under orders from Charles III ended a period of relative success at instructing the natives of the Chaco in Christianity. After 1811 and independence, the Church was firmly established, and throughout the nineteenth century—as elsewhere in South America—it became the primary educational agency in Paraguay. Even today, because of the strong and pervasive Church influence in government and social institutions, the distinction between state and church education in Paraguay is almost completely blurred. Private schools in Paraguay are likely to be Catholic.

With a traditional stranglehold on primary and secondary education, the Catholic Church in the 1960s extended its power to the university level in Paraguay and elsewhere. In the 1980s, in advance of the 1989 overthrow, a Paraguayan Peasant Movement and Catholic leaders both criticized Stroessner (who was in alliance with the Colorado Party). Pope John Paul II's visit in 1988 set up an occasion for antigovernment demonstrations in which intellectuals and poor farmers united to demand reform.

Guaraní & Spanish: The Bilingual Problem: Paraguay claims to be the only truly bilingual country in South America. Traditionally a large number of Paraguayans have spoken Guaraní, the indigenous tongue, rather than Spanish. In rural areas through the 1980s, an estimated 90 percent of children entered primary schools speaking Guaraní, which, especially outside Asunción, is the medium of daily exchange. Thus bilingualism has contributed to educational difficulties including widespread failure of students to complete Spanish-based educational programs, especially in the rural contexts.

In the late 1970s, the Ministry of Education and Worship recognized a crisis in rural education and responded by initiating a bilingual program to help native Guaraní-speaking children progressively gain oral and written skills in Spanish after entering school.

Literature in Guaraní remains available at the secondary and university levels, and materials printed in the indigenous language are available in the country.

Preprimary & Primary Education

In this poor country, preprimary education has not traditionally been a priority. For the most part, other needs that have seemed more pressing have taken precedence.

Slow but gradual progress in primary education has been the pattern during the late twentieth century. Student absenteeism and grade repetition have been common patterns, more so in rural than in urban schools.

At the beginning of 1909, when compulsory education in Paraguay started, 344 primary schools employed 756 teachers and served 40,605 pupils. Concurrently, private schools enrolled 2,000 to 3,000 students. Under the direction of the Ministry of Education and Worship, the primary program, free and compulsory for children ages 7 to 14, comprised one six-year cycle.

In the early 1970s, fewer than 5 percent of elementary school students in Paraguay finished the full six-year course of study, compared with 30 percent of urban students.

From 1975 to 1980, rapid growth occurred, with the number of students in attendance in primary schools increasing by about one-quarter. Much of this increase occurred in rural areas, where between 1972 and 1981 a one-third increase occurred. A 1980 study showed improvement in the percentage of students completing the elementary school cycle, with about 38 percent of all students finishing the program; the figure for rural students, 25 percent, remained well below that registered by urban students. In theory, six years of education was compulsory in Paraguay in 1982, as earlier, but many remote rural areas still lacked schools.

By 1984, a total of 560,000 students attended primary schools in Paraguay. But the proportion of enrolled school-age children actually declined or remained constant from 1965 to 1985. Statistics for 1989-1990 showed 4,411 schools and 31,590 teachers employed at the primary level (ages 7-12). A total of 656,877 students generated a student/teacher ratio of 20.8 to one.

Finding adequately trained teachers has long been a problem, especially in rural areas, where many teachers have been uncertified. Statistics for 1992 show only 28 percent of Paraguayans pursuing education past primary school.

Secondary Education

After independence in 1811, a secondary school was established but closed in 1822. Modest efforts in the mid-nineteenth century toward public education amounted to little. After 1877, when the first secondary school system was inaugurated, public education grew, producing a supply of graduates that justified the founding of the National University in 1889 and the first teacher-training school in 1896.

By 1909, five national "colleges" providing secondary instruction were located in Asunción, Villa Concepción, Villa Rica, Villa Encarnación, and Villa del Pilar. Additionally, two normal schools offered teacher training.

At the time of the Chaco War against Bolivia in the 1930s and 1940s, Paraguay had several teachers' colleges, a number of high schools, and a few technical schools. Before World War II, the educational system expanded, with enrollments nearly doubling. Expansion continued at the secondary level faster than at the primary level.

Secondary education was organized as two three-year programs, each leading to a baccalaureate degree. Students anticipating university admission or teacher training pursued the diversified program, with a focus in the humanities. Those with more limited academic abilities or more practical interests—including the pursuit of advanced training at one of a number of postsecondary schools offering programs in agriculture, commerce, or industry—took a three-year technical program in high school.

In the 1970s fewer than 1 percent of rural children finished secondary school programs, compared to 10 percent of urban students. From 1975 to 1980, the number of students in the basic secondary cycle grew from about 49,000 to about 76,000. By 1988, about one out of four children in Paraguay went on to secondary school: in that year, 165,373 students ages 13-18 enrolled in 812 schools. (Included in these figures are vocational students and those in teacher training.) These students were taught by 9,444 teachers, so that the student/teacher ratio was a bit better than that at the lower levels. Twenty-eight percent of students went to high school in 1992.

By the late 1980s, women made up fully half of all high school graduates. Paraguay has three Jesuit high schools, two in Asunción and one in Santa Rosa.

Higher Education

Larger numbers of graduates of both sexes since the 1980s have brought about relatively rapid growth in the universities. Paraguayan universities, like those in neighboring countries, have traditionally enjoyed prestige and a kind of power.

Because private endowment of higher education has been essentially nonexistent except from the Catholic Church, state support has been necessary—and inadequate. The public, tuition-free university has tended to be poor, with professors underpaid and students often having relative power. In North American terms, students have little campus life, with no fraternities or sororities. Higher education is serious in that students are grooming themselves to be members of professions. Examinations weed out all but a tiny handful of students, so that a small fraction of those who attend secondary school get into the two colleges. Thus holders of a university degree make up less than 1 percent of the total population and are guaranteed a place at the top of the political or economic hierarchies. Women now comprise about half of the university graduates.

Church universities increased numerically in South America in the 1960s: there were 13 such universities in the 1950s and 31 ten years later. Parochial schools generally enroll students from the better-off families. At such schools the teaching standards are higher, the discipline is more severe, the curriculum more rigorous, the professors better paid, the ambience more conservative. Though their orientation is sectarian, such schools have accepted Protestants and Jews since the 1960s and have had some non-Catholic teachers.

Predictably, of the two significant institutions of higher education in Paraguay, one is Catholic, the other, public. Both universities have main locations in Asunción, operate in Spanish, and require as qualifications for admission a bachillerato (secondary school certificate) or its equivalent plus an entrance examination. Both universities also have had branches since mid-century in several interior locales. The Catholic University charges tuition, while the state school is free.

The Universidad Católica "Nuestra Señora de la Asunción" (Catholic University of "Our Lady of Asunción"), which enjoys recognition by the federal government on the same basis as the public National University, was founded in 1960. The school's origins coincide with the widespread emergence in South America during the 1960s of specifically Catholic universities run by the church, a pattern fostered by the Church's general view that the public universities were leftist, unruly, and ineffectual. In the early 1990s, the school enrolled nearly 11,000 students and engaged an academic staff (including professors) of about 1,230. Degrees and diplomas offered included the Licenciado in philosophy, history, psychology, sociology, political science, diplomatic studies, accountancy, letters, mathematics, pastoral studies, business administration, education, and nursing and midwifery. The program in law requires six years. Postgraduate degrees include one in obstetrics, as well as the Máster en Administración de Empresas and the Doctorado.

Subdivisions in Catholic University's organization include the faculties of philosophy and human sciences (including political science and education), law and diplomatic studies, accountancy and business administration, science and technology (including architecture), and science and letters. An Institute of Theology, a School of Nursing, and four research centers complete the organizational system. Faculties of science and letters operate not only in Asunción but also in Villarrica, Encarnación, Concepción, Ciudad del Este (where the theology and nursing facilities also operate), and Pedro Juan Caballero. In addition, the University cooperates internationally with the Universities of Milan (Italy); Brussels (Belgium); Kansas (U.S.); La Plata (Argentina); Frankfurt-am-Main (Germany); and with Université catholique de l'Ouest (Angers). The Central Library of Catholic University housed 45,000 volumes in 1993. The University has its own press, the Publications Center of Catholic University (CEPUC, Centro de Publicaciones de la Universidad Católica) and in the early 1990s sponsored two publications, Revista del Centro de Estudios Antropológicos and Estudios Paraguayos (Revista de la Universidad).

The National University of Asunción, roughly double the size of Catholic University and more than twice as old, was founded in 1890 and granted autonomous status in 1919. By 1991 it had nearly 20,000 students and 1800 members on its academic staff, including professors. The organization of National University, which offers more advanced professional work than Catholic University, subdivides a dozen faculties under these rubrics: law and social sciences; philosophy (including communication sciences, education, and psychology); medicine; physics and mathematics (including civil, industrial, and electromechanical engineering); economics (including administration and accountancy); dentistry; chemistry (including pharmacy and food technology); agriculture; architecture; veterinary science; polytechnic; exact and natural sciences; and library science. Offering specialized study are the Institutes of Social Work (including nursing and midwifery), geographical sciences, electronic engineering, and languages (including English, French, Guaraní, and German). The University Library housed only 16,641 volumes in 1991 and was thus only about one-third the size of the Central Library of Catholic University, which itself had relatively limited holdings.

The National University offers degrees and diplomas that include the Licenciado in philosophy, mathematics, education, letters, history, exact sciences, physico-chemistry, natural sciences, public administration, and economics. Advanced programs and degrees requiring four, five, or six years of study beyond the Licenciado include those in education, dentistry, medicine, biochemistry and industrial chemistry, economics, law and social sciences, veterinary medicine, law, architecture, agronomy, civil engineering, and industrial engineering.

In the 1970s, both National University and Catholic University began offering various short-term degree programs to try to meet the increased student demand for admission and to reduce pressure on traditional professional courses of study.

The fastest growth of educational institutions in Paraguay during 1965-1985 occurred at the postsecondary level. In the early 1980s, the two universities together employed 2,694 teachers and enrolled 28,677 students, with about 20,000 of them at the National University. By 1984, some 33,000 were recorded as being enrolled on both campuses. National University had 19,400 and 3,200 teachers in 1987, whereas Catholic University had 10,400 students and 1,100 teachers.

Both universities operate on a March through November (or December) calendar, with a division into two terms: March through July and August through late fall.

In 2001, universities advertising on the Internet as accepting international students from abroad include not only the National University and Catholic University but also Universidad Autonoma de Asunción and Universidad del Norte, both also in the capital city. Photographs on various Internet web sites show up-to-date computer labs that are indicative of the entrance of Paraguay's institutions into the modern technological mainstream.

The "Seminario Conciliar," which was founded in Asunción in 1881 and graduated 60 priests before 1911, represents another type of institution that has long existed in Paraguay for the primary purpose of educating Catholics for service in church roles.

Administration, Finance, & Educational Research

Catholic University and National University enjoy equivalent federal recognition.

Catholic University, founded in 1960 by the Conferencia Episcopal del Paraguay, was later reorganized by the Sacred Congregation of Seminaries and University Studies. Heading Catholic University as its Grand Chancellor is the Archbishop of Asunción; the University's jointly governing bodies are the Consejo Universitario and the Consejo Administrativo. The National University, founded in 1890 and granted autonomous status in 1919, is financed by the State Governing Body and governed by the Consejo Superior Universitario—a group comprising the Rector, the dozen or so faculty deans, one alumnus, and one student.

The tradition of private economic support for mass education by means of personal or corporate endowment has never been generally established in Paraguay. Private schools, primarily Catholic, charge tuition. Government funds, supplemented by various user sources, have supported public education in the past, and still do. In the early 1980s, the budget of the Ministry of Education and Worship, which supervised elementary and high school education, was barely 15 percent of total government expenditures.

National Funding and national control of educa tion—not regional or local funding—is the norm in Paraguay. Heavy percentages of federal allocations have traditionally gone toward primary schooling. Urban schools in Paraguay typically get 90 percent of their support from government funds. Public secondary schools have received from half to three-quarters of their support from the national government, with the rest coming from various sources including users and locales.

Primary and secondary public schools have throughout the twentieth century remained under the supervision of the Ministry of Education and Worship, a central agency.

No indicators in 2001 suggest more than nominal developments in areas such as distance learning. Under funding and conservative patterns persist. Few substantive scientific activities exist except class instruction at the National University. The small size of the university libraries is telling, though the era of the Internet does now provide global access to resources in the more up-to-date schools.

Nonformal Education

The Academy of the Guaraní Language and Culture is one of two important institutes devoted to preserving the native culture. Many songs, folk poems, and publications use the indigenous language.

Educational exchanges are aspects of the educational system, both at the high school and college levels. In 2001, high schools listed as accepting international students for study included Centro Cultural Paraguay, Colegio Internacional, and Centro Cultural Paraguayo-Americano. Others were the American School of Asunción, Grace Educational Center, Asunción Christian Academy, Pan-American International School, and Centro Cultural Paraguay-Estados Unidos.

The Centro Cultural Paraguayo-Americano (BNC) sponsors cultural activities and has a 10,000-volume library with titles in both Spanish and English, including major Paraguayan authors. The Center teaches 1,500 students English and offers educational activities including lectures and seminars.

In 1997, Paraguay had 10 television stations. In 2001, the U.S. Peace Corps had some 180 volunteers working in Paraguay, some as teachers.

Teaching Profession

The first postsecondary facility for teacher training in Paraguay dates from 1896, and two normal schools for that purpose existed by 1909. A two-year postsecondary program in teacher training has been required for primary teachers, and an additional two years of specialized training for secondary teachers.

Retraining programs have been available through the Higher Institute of Education and in several regional centers.

Statistics commonly lump teacher training programs in Paraguay with other postsecondary enrollments and activities. Some teacher training occurs within regular university programs, especially for work as university professors in academic specialties.

Summary

Education in a poor country with scant native middle and upper classes is a primary means of achieving social mobility. Paraguay's long history of authoritarian government—with three dictators during the period 1814-1870, frequent changes in the presidency from 1870 to 1954, and Stroessner's political stranglehold on the country until 1989—has stunted progress in public education. The effect has been circular: a lack of democratic control has suppressed the cultivation of strong public school systems, and the absence of such systems has, in turn, kept down democracy by failing to train leaders and productive, engaged citizens. Political, geographical, ethnographic, and economic factors have all worked against education in Paraguay.

Five constitutions dated 1844, 1870, 1940, 1967, and 1992 chart the country's successive efforts toward self-determination. The June 1992 constitution, in the wake of the 1989 coup, has held out hope for educational reform, but ongoing problems have delayed implementation.

In a 1996 article in International Higher Education, Vincente Sarubbi argues that in Paraguay's post-1989 efforts to move toward democracy, a "true educational revolution will be necessary." A founding member of the Advisory Council of Education Reform in Paraguay and a former university teacher and newspaper director, Sarubbi notes the contemporary inadequacies of higher education in particular: "insufficient coverage, low levels of performance, insufficient and dated functions of the university, highly bureaucratized administration, inadequate moral and intellectual development of students, lack of professional teaching standards, and irrelevance of the curriculum for the purposes of production, government, and life in general." Specifically he calls for better scientific and technological education, for broader access to higher education, for more research and a "scientific culture" in universities, and for the development of inclusive and democratic attitudes within.

Many of Sarubbi's negative phrases might also describe the larger education picture in Paraguay at the beginning of the millennium. Still, in a more democratic and open climate than the country has ever enjoyed, the government now promises to broaden educational opportunities as a means of alleviating social deprivation and improving the quality of life in the country.

Bibliography

The Central Intelligence Agency (CIA). U.S. State Department Background Notes 1999. The World Factbook 1999. February 17, 2001. Available from http://www.worldrover.com/country/paraguay.

"Paraguay." International Handbook of Universities, 13th ed. Paris: The International Association of Universities, 1993: 722.

"Paraguay: Education." The Library of Congress Country Studies. Apri 2, 2001. Available from http://lcweb2.loc.gov/.

Sarubbi Zaldivar, Vincente. "Democracy and Higher Education in Paraguay." International Higher Education. (August 1996). February 27, 2001. Available from http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/News05/text8.html.

U. S. Department of State. Post Report: Paraguay. Publication No. 9170. 1994.

Worldwide Classroom: Paraguay Schools. February 27, 2001. Available from http://www.worldwide.edu/ci/paraguay/fschools.

—Roy Neil Graves

PARAGUAY

Republic of Paraguay

Major Cities:
Asunción, Encarnación

Minor Cities:
Caacupé, Caazapá, Ciudad Del Este, Concepción, Coronel Oviedo, Luque, Pedro Juan Caballero, Pilar, Villarrica

EDITOR'S NOTE

This chapter was adapted from the Department of State Post Report 2000 for Paraguay. Supplemental material has been added to increase coverage of minor cities, facts have been updated, and some material has been condensed. Readers are encouraged to visit the Department of State's web site at http://travel.state.gov/ for the most recent information available on travel to this country.

INTRODUCTION

Located in the heart of South America, Paraguay is a landlocked, agricultural country about the size of California. The Parana-Paraguay River system is Paraguay's commercial access to the outside world. The eastern section of Paraguay, where most of the population lives, consists of rolling, fertile, farming areas and grasslands. The western section, called the Chaco, is a low lying plateau covered with grassy meadows, bogs, spiny bushes, palms, and small trees. Lack of roads and navigable rivers makes much of this region inaccessible. Paraguay's climate is variable and unpredictable. It is subtropical, with summer and winter seasons opposite those in the U.S.

Older than Buenos Aires, Asuncion, the capital, has not yet lost its aura of provincialism and isolation. With profuse, colorful year-round blossoms in residential gardens and along tree-lined avenues, Asuncion retains a quiet charm. Entertainment is diverse, with ready access to the nearby countries of Brazil, Argentina, and Uruguay. Paraguayans are generally well-disposed toward Americans, and informal acquaintances can easily be made with coworkers, neighbors, and at school events. Social life, however, centers on the family and contact with outsiders is somewhat limited. The people do appreciate it when someone takes the trouble to learn their native language, Guarani.

MAJOR CITIES

Asunción

Older than Buenos Aires, Asuncion has not yet lost its aura of provincialism and isolation. Founded on August 15, 1537, and once the capital of the colonial River Plata Vice-royalty, it remains the center of Paraguayan activity. Increasing numbers of visitors (mostly from Argentina and Brazil) are attracted to Paraguay during the Southern Hemisphere winter. Modern hotels and office buildings are springing up beside weathered structures of an earlier vintage in Asuncion's bustling downtown shopping and business area. With profuse, colorful year-round blossoms in residential gardens and along tree-lined avenues, Asuncion retains a quiet charm.

Utilities

Short water outages occur occasionally in Asuncion. Laundry areas and kitchens do not always have hot water. Showers are much more common than bathtubs.

Short power outages occur occasionally. Electrical current is 220v, 50-cycle, AC. Appliances using 110v current in the U.S. need transformers. A 1,500w transformer is necessary for high wattage appliances. Do not bring electric clocks as they require an impractical conversion.

Food

As an agricultural country, Paraguay offers ample locally produced fruits and vegetables as well as beef, pork, and poultry. Staple items and processed foods are not offered in the variety found in the U.S. Foods that are imported or not produced in large quantities can be expensive.

Several large markets in the city sell a variety of seasonal fresh fruits and vegetables, beef, pork, chicken, freshwater fish, flowers, plants, herbs, and a jumble of household items.

Meat is also sold in small butcher shops and supermarkets. It is inspected but not always refrigerated and is sold freshly butchered. Beef is plentiful, but the variety of cuts is limited. Poultry, pork, hot dogs, cold cuts, and some good freshwater fish are available. Veal is uncommon, and lamb is rare. Supermarkets sell some precut, packaged meat and poultry.

Good-sized supermarkets, scattered throughout the city, compare on a smaller scale to U.S. supermarkets. They also carry wines and liquors, and depending on size, some kitchenware, hardware, toys, stationery supplies, and clothing.

Most processed food is imported. Since Paraguayans depend primarily on fresh foods, the selection of canned fruits, vegetables, soups, or meals-in-a-can is small. Similarly, their tastes do not demand great variety in snack foods, convenience foods, sauces, and salad dressings. Paraguayan cheeses and those most commonly imported are bland types. More robust and highly flavored cheeses are imported in small amounts. Either skim or whole milk is available with a long shelf life and does not need refrigeration until ready to use. Yogurt is available in limited flavors and cottage cheese and cream cheese are available at times.

No canned pet food is sold, although dry pet food is available. You can buy liver and kidneys from local neighborhood pickup trucks or butcher shops. Mix it with kitchen scraps, for an inexpensive, yet nourishing, pet food.

The selection of vegetables has expanded over the years due to the influxes of agricultural technologies brought in by Japanese and Taiwanese immigrants. You can find a good selection of fresh green vegetables in local oriental markets or the Tuesday agro shopping fair in the Mariscal Lopez Shopping Center.

No home is more than a couple of blocks from a neighborhood grocery store ("dispensa"), which stocks a little of everything. Bakeries offer a good assortment of white and brown bread and rolls. Specialty shops sell cakes and pastries, cold cuts and sausages, and ice cream. Yard area permitting, a home garden can add diversity to seasonal menus. Insects can be a minor problem, but most plants grow quickly and well.

Frozen foods are not normally available in Asuncion.

Clothing

Styles are much the same as in the U.S., but are influenced by the long, hot summers and short, cold winters. Although almost any article of clothing can be found in Asuncion, the choice is somewhat limited byU.S. standards. The search can be time-consuming for those unfamiliar with Asuncion's local shops. Children's clothing is also available here. Bring underwear, socks and hosiery, diapers and baby clothes, and bathing suits. Jeans are popular for school and casual wear.

Dressmakers and tailors can make formal gowns, dresses, skirts, and blouses for women; shorts, sunsuits, and other clothing for children; suits, slacks, and jackets for men. A good selection of fine wool, cotton, and dressy fabrics can be found locally, whereas greater diversity in synthetic and wash-and-wear fabrics is available in the U.S. Asuncion's cobblestone streets are hard on all footwear; women's shoes with low or thick heels are practical. Sandals are popular in summer, when stockings are not usually worn.

Woolen or other warm clothing is needed during the June to September winter for the many cold, damp days and nights. Sweaters or jackets that can be layered or removed are particularly useful. Bring cotton flannel sleepwear and warm slippers. Umbrellas and raincoats are necessary.

Locally made embroidered shirts, blouses, and dresses of fine cotton fabric called "aho-poi" are a good and useful buy in Asuncion.

Men: Bring a good supply of lightweight suits, sport coats, slacks, and shirts. Casual clothes may be worn to all restaurants and to some cultural events. In Paraguay's short cold season, some winter weight wool suits, sport coats, and slacks will be useful.

Women: Loose fitting cotton daytime dresses are more comfortable in summer heat than nylon and certain other synthetics such as polyester knit. Dressy cottons or other washable fabrics are suitable for casual evening wear. For more formal events, simple to elaborate cocktail dresses are appropriate. Heavier weight dresses are needed for winter wear; jackets or stoles are useful. Hats or gloves are seldom worn, but occasionally a hat to shield the sun's rays or leather gloves to ward off the morning cold are practical.

Supplies and Services

Imported medicines, drugs, toiletries, and cosmetics are available locally, but can be expensive. Certain U.S. brand toiletries, such as Johnson's Baby Powder, are made under license in Argentina and Brazil and are less expensive than those produced in the U.S. If generic brands satisfy you, you will find most everything here.

U.S.-type hardware items and tools, including garden tools, are available locally but are higher in price and limited in variety. Lovely nanduti lace or "aho-poi" embroidered place-mats and tablecloths, guest towels, and doilies are handmade in Paraguay and sold at reasonable prices. Items difficult to find or expensive locally are: books, stationery, greeting cards in English, cocktail napkins, party supplies, special sewing or craft materials, games, toys, sports equipment, fishing gear, pool supplies, flashlights, anti-mildew products, and airtight storage containers.

Tailors and dressmakers, cobblers, and barbershops offer satisfactory services at reasonable prices. Most hairdressers are small-scale neighborhood establishments unlike U.S.-style salons. Several higher quality salons offer many services at better prices than those in the U.S. Prices and quality vary. Drycleaning is acceptable. Laundry is generally done at home; hotel laundry facilities are expensive. Inexpensive, good quality work is done on picture framing, furniture upholstering, and drapery making. Attractive wicker and rattan furniture is made locally. Appliance and auto repair shops are reasonable but often do not meet U.S. standards and may not have parts. When thinking of items to bring with you for your car, remember filters, belts, spark plugs, and extra tires. Caterers supply food and equipment for large parties.

Domestic Help

Well-trained domestic help is rare, and good cooks are hard to find. Any help will probably speak Spanish and Guarani, rarely English.

Large families may have a maid and a nursemaid. Laundresses, cleaning ladies, or gardeners usually come once or twice a week. Wages do not represent the total expense to the employer. Food is provided to day workers, and live-in servants may receive food or allowances. Most houses have quarters for one live-in servant; the employer supplies furniture, bed, and bath linens. Work dresses, uniforms, and routine medical aid may also be provided. After completing 1 continuous year of service, servants receive a 13th-month bonus (Christmas bonus). For employees who work less than 1 year, a bonus will be established taking 1/12 of the total amount of all salaries paid during the calendar year. Under Paraguayan Law 1085, domestics-including regularly employed cooks, maids, laun-dresses, gardeners, chauffeurs, and nursemaids-must be covered by social security. It is not elective with either the employer or the domestic. All servants must have a medical examination at the employer's expense.

Religious Activities

Since most Paraguayans are Roman Catholic, Spanish-language Catholic churches abound. Mass is regularly held in English on Sundays and holidays for English-speaking Catholics by American priests of the Redemptorist Order. The Anglican (Episcopal) Church and Baptist Fellowship hold services and Sunday school in English every Sunday. Anglican and Baptist churches also have services in Spanish, as do the Free Will Methodists, Assemblies of God, and Seventh-day Adventist. The Lutheran and Mennonite churches offer German-language services. Services in Spanish can also be found at the Church of Jesus Christ of the Latter-day Saints (Mormon), Jewish Synagogue (which also has a social club), and the Russian Orthodox Church.

Education

Many primary age school children attend the American School of Asuncion, accredited by the Southern Association of Colleges and Schools. The American School offers kindergarten through grade 12. Separate kindergartens for 4-and 5-year olds are available, but the education allowance only pays for the latter. First graders must have turned 6 before the opening of school in August.

Instruction is in English, but Spanish is taught as a native language, beginning with K-5. Both the U.S. standard and the Paraguayan curriculums are offered. Almost all teachers, except Spanish instructors, are U.S. citizens and U.S. certified. The school has no speech therapist. Some remedial tutoring is provided.

The school teaches standard U.S. curriculum subjects-language arts, math, science, and social science. General electives include French, Italian, special Spanish, Latin, German, economics, computer, creative writing, photography, government, sociology, biology, music appreciation, art, typing, and PE. Home economics and shop courses are not offered. The school has occupied its building since 1963 and has been expanding and improving the facilities since then. The school has a library, a science lab, a dark room, a tennis court, an art room, locker/shower facilities, a canteen, and a computer room.

Hours are 8 am to 3 pm for all grades. Hot lunches are available in the canteen for children who do not bring their lunches. Lunch boxes and vacuum bottles are sometimes available locally.

The two-semester school year ends in July and begins in August, with a 2-week break between school years. A 21/2-month midterm vacation lasts from December through mid-February. The school observes all Paraguayan and some U.S. holidays.

The Asuncion Christian Academy is an interdenominational school sponsored by the evangelical missions in Paraguay. It provides Christian academic education to English-speaking children from pre-kindergarten through grade 12. Instruction is in English, but Spanish is also taught. The school calendar is similar to that of the American School. Classes are from 7:15 am to 12:30 pm. Teachers must have U.S. certification; materials and methods are U.S. based.

Another option is the Pan American International School, also accredited by the Southern Association of Colleges and Schools. The PAIS offers education to students in grades K through 12. Instruction is in English. In addition to the required curriculum at PAIS, classes in drivers education and industrial arts are also available. Classes are from 8:00 am to 3:30 pm for grades 5 to 12 and 8 am to noon for kindergarten through grade 4.

Neither the American School nor the Christian Academy has a dress code.

Attendance at any other local school requires Spanish-language fluency. In some subjects, standards of the Paraguayan institutions are high, and Paraguayan students may be ahead of their American contemporaries. Curriculums naturally are geared to the local education system, with emphasis on Paraguayan history and geography. Teaching stresses rote memorization. English is sometimes taught as a foreign language.

The best private Spanish-language institution is the well-regarded Colegio Internacional. Established by the American Disciples of Christ Church, the school offers kindergarten, primary, and secondary classes. Instruction is by local teachers. English is taught as a foreign language. The extracurricular program, which includes music and sports, is excellent. The most prestigious Catholic boys school, San Jose, and the leading Catholic girls school, Santa Clara de Jesus, offer 12-year academic programs. The Santa Clara School, run by Catholic nuns, has coeducational kindergarten and primary classes, and a 4-year secondary school for girls only. The Goethe Institute, subsidized by the German Government, offers instruction in German and Spanish.

The University of Alabama at Tuscaloosa offers a Masters of Education program in the American School of Asuncion campus…

Special Educational Opportunities

Private instruction in Paraguayan harps and guitars is available. The instruments themselves are inexpensive and available locally. Piano lessons, and group ballet and Spanish dancing classes are available for children and adults.

With permission from local authorities, foreigners may attend lectures at the National University, gratis. All instruction is in Spanish. No academic credits are awarded.

Several nursery schools are available for preschool children. Only two are conducted in English, however, and the number of places in these are limited. Parents who wish to enroll their children should make a reservation well in advance. The names of some of the nursery schools are: Maria's Pre-School (English-speaking), English Play-group (English-speaking), and Casita de Sandy (Spanish speaking).

No special educational facilities for handicapped and learning-disabled English-speaking children exist.

Sports

Participant and spectator sports are available year-round in Asuncion. Some clubs, such as the Yacht and Golf Club and Asuncion Golf offer special rates for diplomats or waive initiation fees. The Yacht and Golf Club includes swimming, tennis, weight lifting, and squash. The American School has outdoor facilities for soccer, basketball, volleyball, and baseball, which are available to the community.

Asuncion has one bowling center with 12 automatic lanes. Rates are reasonable. Shoes may be rented for a small additional fee.

The main spectator sport in Paraguay is, of course, soccer. Rugby, basketball, volleyball, tennis, and boxing are also popular. Motorcycle and cross-country automobile races are held from time to time.

Fishing on the Paraguay River is principally for dorado, a large, fighting game fish, and several large varieties of catfish. Paraguay sponsors international fishing competitions in spring.

Popular fishing areas are Guraty, a 20-25-minute drive from Asuncion, where you can rent boats; Santa Rosa, 85 kilometers down river by boat; and Ayolas (300 kilometers south), which has a modern hotel and boat rentals. Villa Florida, a small town on the Tebicuary, a tributary of the Paraguay River, has hotel or camping facilities and boat rentals. Swift currents and an abundance of small piranas make swimming unsafe in these rivers. Fishing equipment brought with you and should include a heavy-duty rod, combination of trolling and bait-casting reel capable of holding 200 yards of 40-pound test line, large spoons, and plugs and wire leaders, as both surubi (catfish) and dorado sometimes exceed 30-40 pounds. Motors are not usually available for rental and are expensive locally. Small boats (3-8-passenger motor launches) may be purchased locally. Garages service them. Dock-and-storage facilities are available near Asuncion, as well as at the Sajonia Club.

Most hunting is for game birds such as duck, perdiz (South American tinamdu), and doves. Crocodiles, wild boar, deer, jaguar, and puma are found in remote regions of the Chaco, but their status as endangered species means they are generally illegal to hunt. Although hunting on public land has been banned for several years to allow stocks to increase, hunting continues on many private lands. Paraguay does not require either hunting season or fishing licenses. To hunt, you must have access to private land.

For all practical purposes, big game hunting is impossible, since access to the Chaco is difficult. Bird shooting, especially perdiz, is very popular and easily accomplished, providing one gains access to a nearby "Estancia." Usually, any of the cattle ranches within 1 hour of Asuncion will have a large population of perdiz. A bird dog is a must for perdiz. The perdiz, a quail-like bird, prefers to run whenever possible. Without a dog, chasing perdiz could be futile in some areas. If you are a bird shooter, bring all your equipment, including reloading components. Although U.S.-made ammunition is very expensive, it is possible to buy Brazilian ammunition at lower cost, about like U.S. prices. Bird dogs, although available, are expensive and difficult to find. Bring your own. A 12-gauge shotgun will probably be most versatile; however, keep it light and chokes open. If you are a die-hard bird shooter, then the traditional lightweight 20 would be ideal.

Touring and Outdoor Activities

Museums and buildings of interest in Asuncion include the Ethnological and Archeological Museum, the Military History Museum, the National Pantheon, and the Casa de la Independencia. Near the Cathedral is the first seminary in Asuncion, which has several exhibits of religious artifacts, memorabilia from both wars, and some personal effects of Monsignor Bogarin, former Archbishop of Asuncion. The Bank of Asuncion has restored the former home of one of Mariscal Lopez's brothers, Benigno, and it contains an interesting historical exhibit of currency used in Paraguay. The Botanical Garden contains the Museum of Natural History and a small Indian museum as well as picnic areas, sports fields, and the zoo.

Not far from Asuncion, the town of San Lorenzo has an Indian artifacts museum and shop near the only Gothic style church in Paraguay. Capiata boasts a private mythological museum, which also has a display from the Triple Alliance and Chaco wars, and a collection of religious wooden statues carved by Indians, who had been instructed by the Franciscans. San Bernardino is Lake Ypacarai's most developed resort town with hotels, a casino, and concerts. On the other side of the lake is Aregua, which has picnic facilities and rowboat rentals. The town of Itaugua is the home of nanduti, a lace product found only in Paraguay. Every year in December pilgrims trek the 50+ km walk from Asuncion to Caacupe to see the Shrine of the Blue Virgin. Capiata also has a private mythological museum, which has a display from the Triple Alliance and Chaco wars.

Full day or weekend camping trips can be made to Pirareta Falls, Chololo Falls, and Cristal Falls, all less than 100 kilometers from Asuncion. All three have camping areas, and Chololo has a restaurant.

You will need 2 or 3 days to visit the ruins of several Jesuit mission towns in southern Paraguay. Some of the travel is on secondary, unpaved roads. Hotel accommodations are available at Encarnacion or Tirol del Paraguay, a hillside resort. A comfortable, round-trip, 2-day ship excursion can be taken upriver to Concepcion.

The sprawling Chaco begins almost immediately northwest of Asuncion. For longer trips beyond all-weather roads, you need a four-wheel-drive vehicle, as well as camping gear, mosquito netting, and insect repellent. This area is reminiscent of the early American West with its vast open spaces, herds of cattle, and colorful cowboys. It is also a bird-watcher's paradise, and game animals abound here.

The world-famous Iguazu Falls are spectacular. The falls are located at the juncture of the Parana and Iguazu Rivers where the Paraguayan border meets with those of Brazil and Argentina. The falls can be reached in 5 hours by car. An overnight bus can also be taken for those who wish to see the falls and return the same day. It is here that the International Friendship Bridge crosses the Parana to Brazil. At the falls, accommodations in all three countries range from camping areas to luxury hotels.

In planning road travel, you must consider high gas prices as well as the type and conditions of roads to be traveled. Hotels and restaurants are found in larger towns and on both sides of the borders with Argentina and Brazil, but make reservations in advance. Prices are comparable to those in Asuncion.

To have a real change of scene, you must travel to one of the more developed neighboring countries. Visits to cosmopolitan centers such as Buenos Aires, Montevideo, Cordoba, Sao Paulo, Rio de Janeiro, or Santiago offer shopping, cultural, and entertainment diversions not found in Asuncion. Ocean beach resorts in Brazil and Uruguay provide a refreshingly different ambiance.

Entertainment

Commercial entertainment in Asuncion consists of films, plays, concerts, discos, a hotel gambling casino, karaoke bars, and hotels and restaurants with dancing and/or floor shows. Asuncion has several movie theaters that offer a fair selection of American and foreign films (mostly double features), including older action films and juvenile favorites. Shopping del Sol, Villa Mora Shopping Center, Excelsior Shopping Center, the Hiperseis Shopping Center and Multiplaza Shopping Center all have modern movie theaters showing relatively new movies.

Modern and classical plays are presented (in Spanish or Guarani) at the Arlequin Teatro. The Centro Cultural Paraguayo-Americano (which boasts the best theater in town) and the cultural centers of other foreign missions also present plays and host film presentations, gallery shows, and concerts by musicians from their respective countries. Argentine, Uruguayan, and American professional groups bring occasional theater or music to Asuncion.

Entertainment at clubs and restaurants is principally local talent, with folkloric presentations such as the guarani, the polka, and the bottle dance performed regularly. Asuncion has a variety of good restaurants, many of which offer ethnic menus such as Brazilian, Chinese, French, German, Japanese, Korean, and Lebanese.

Local festivals, all comparatively low-key and subdued, include a pre-Lenten carnival and the Festival of St. John's Eve featuring demonstrations of faith or bravado by people walking barefoot on hot coals. Most towns have processions on their patron saint's name day, and festivals in artisan towns near Asuncion are held during the winter tourist season. Photography is unrestricted at these events. Paraguayans are generally quite willing to have their pictures taken, although Indians expect to receive a tip or may set a price themselves.

Social Activities

American women, some years ago, organized a club known as Las Amigas Norteamericanas del Paraguay. Among its social activities are monthly meetings, visits to nearby places of interest, handicraft work, coffees, and luncheons. Its charitable activities include welfare work, participation in fund raising projects of other organizations, and an annual fair.

Paraguayans are generally well-disposed toward Americans, and informal acquaintances can easily be made with coworkers, neighbors, and at school events. As with many Latin societies, however, social life centers on the family and contact with outsiders is somewhat limited.

Church or cultural center activities, where shared interests form a common bond, provide some opportunities for meeting Paraguayans and other foreigners. Several business clubs, including Lions and Rotary, exist throughout the country. Charitable groups in which Americans participate besides Las Amigas and missionary organizations include: Damas Diplomaticas, a group of women from the diplomatic community who meet socially to raise money for charity; the International Women's group organizes different activities including visits to cultural centers and talks on diverse subjects; and the Red Cross, whose activities include sewing and conducting charity sales. The American School PTA sponsors various activities and events. The Damas Britanicas annual Caledonian Ball is popular with many Americans.

Encarnación

Encarnación, in the deep, southeastern part of Paraguay, is the country's second largest city (in terms of stable population figures) and an important port on the Alto Paraná, across from the Argentine city of Posadas. It serves as a major rail terminus for passengers, goods, and livestock; trains are ferried from there into Argentina and on to Buenos Aires.

Encarnación, with a population of about 31,000, is a busy commercial and manufacturing center, whose products from the surrounding rich agricultural area include lumber, tobacco, tea, rice, and maize. Several Japanese farm colonies nearby contribute heavily to agricultural production.

Founded in 1614, Encarnación was originally named Itapúa. It is now the capital of Itapúa Province. In 1926, the city was severely damaged by a tornado, but over the past half-century has rebuilt and expanded into an active community. Its people speak either Spanish or Guaraní ; there are few hotels or shops where English is heard. British or other European newspapers occasionally are available at the airport outside the city. The library in Encarnación has some titles in English. No English-language schools are in operation.

Encarnación has a television station (Channel 7, Itapúa), which serves the southeastern part of the country. It is a subsidiary of one of the major channels in Asunción.

OTHER CITIES

CAACUPÉ serves as the capital of La Cordilerra Department, 30 miles east of Asunción. Surrounded by the Cordillera de los Altos Mountains, Caacupé is the destination of pilgrims from all over the continent. Its central plaza contains the Shrine of the Blue Virgin of the Miracles, whose feast day is December 8th. The city is an important agricultural processing center; tile manufacturing is another economic activity. The National Agronomic Institute is located here and does crop research. Caacupé is an important resort center. This community of approximately 10,000 people is linked to Asunción by a paved highway.

Founded in the early 1600s, CAAZAPÁ is a departmental capital on the edge of the Brazilian Highlands in the south. The economy depends on lumbering, agriculture, and tanneries. A regional hospital, several educational institutions, and an agricultural college are situated here. A monument to the city's founder, Friar Bolaños, stands in the city of about 3,000. A railway and highway provide transportation to Asunción, 50 miles northwest.

The city of CIUDAD DEL ESTE , formerly Puerto Presidente Stroessner, is a river port on the Brazilian border which grew from a small village to a population of 90,000 during its boom years, when the Itaipú Dam was being constructed across the Paraná River. The city was carved out of the jungle in 1957, and when work began on the dam in the mid-1970s, the population exploded. Now, with the completion of the dam, which was formally opened in November 1982, Ciudad del Este's fortunes have begun to regress. Thousands of families whose livelihood depended on the dam construction and attendant businesses, have left the area seeking other means of support. During the city's flourishing years, it was a black-market haven, and people from neighboring Brazil flocked across the border to buy cheap contraband. Some of this illegal activity continues, but not in the same bold proportions as during the boom years. The city is linked to Brazil by the 1,600-foot Puente de la Armistad Bridge. One of the principal tourist attractions is the Iguaçu Falls, which are located outside of the city. Its population is approximately 111,000.

CONCEPCIÓN is an eastern trading port on the Paraguay River about 125 miles north of the capital. The city, founded in 1773, is also called Villa Concepción. Several banks and commercial establishments are located here. Several industries are located here, including sawmills, flour mills, tanneries, cotton gins, and sugar refineries. The 1995 population was approximately 25,600.

CORONEL OVIEDO , also in eastern Paraguay, is a town of 22,700 residents. It serves as the administrative center of Caaguacú Department. Oranges, sugarcane, and tobacco are grown near the town. The town has a hospital and a Catholic cathedral.

LUQUE , 10 miles outside of Asunción, made history in the late 1860s when war erupted with Argentina, Brazil, and Uruguay. For six years it was the national capital. Luque's produce and industry supply Asunción. Its population is estimated at 25,000.

PEDRO JUAN CABALLERO is on the Brazilian border in eastern Paraguay. It is the capital of the Amambay Department and one of the largest towns in the region. Cattle ranching and coffee growing are primary economic pursuits.

PILAR , capital of Ñeembucú Department, lies 60 miles south of Asunción. This port on the Paraguay River handles most of the agricultural products of the adjacent districts. It is also important in manufacturing. Manufacturing industries in Pilar include sawmills, textile mills, and distilleries. The city is linked with the rest of the country via the Asunción-Encarnación highway. Approximately 13,000 live in Pilar, which has an airport.

VILLARRICA , in south-central Paraguay, is a long-established commercial center about 70 miles southeast of the capital. Founded in 1570, it is the capital of Guairá Department, and the shipping point for a region producing cattle, tobacco, sugarcane, wine, fruit, and yerba maté (Paraguayan tea). It is also known for its sugar refineries, textile mills, shoe factories, flour mills, distilleries, and sawmills. The population, which has a large percentage of people of German descent, is about 21,200. Villarrica's cathedral is a pilgrimage center.

COUNTRY PROFILE

Geography and Climate

Located in the heart of South America, Paraguay is a landlocked, agricultural country about the size of California. It shares its borders with Brazil, Argentina, and Bolivia.

The Parana-Paraguay River system is Paraguay's commercial access to the outside world. Rivers and their tributaries largely define Paraguay's boundaries, and the Paraguay River divides the country into two dissimilar sections, east and west.

The eastern section consists of rolling, fertile farming areas and grasslands, together with large, wooded areas and jungle patches near the Brazilian border. Most of the country's population live in the east and engage in small-scale agriculture. Asuncion and other commercially important towns-Encarnacion, Ciudad del Este, Pedro Juan Cabal-lero, Concepcion, Coronel Oviedo, and Villarrica-are in this area, and most are accessible by paved roads. The western section, nearly two-thirds of Paraguay's total area, is called the Chaco. It is a low lying plateau covered with grassy meadows, bogs, spiny bushes, palms, and small trees. Lacking roads and navigable rivers, much of the region is inaccessible. Only 3% of the population live in this area.

The riverfront elevation of Asuncion is 177 feet above sea level. Residential areas are situated on low hills that rise another 200 feet. Elevations throughout Paraguay are moderate, the highest range of hills, located in the eastern region, rises to about 2,000 feet.

Paraguay's climate is seasonal and subject to abrupt changes. It is subtropical, with summer and winter seasons opposite those in the U.S. Winds are generally moderate, but high winds accompanied by thunder and electrical storms are common, especially in summer. The long, hot summer lasts from October through March, with January average maximum temperature 917 and mean temperature 81°F Severe hot spells with very high humidity are common. Temperatures often exceed 100°F during the day from December to February (the official record high temperature is 109°F), with little relief at night.

Winter extends from June through August. Cold snaps of 4 or 5 days with temperatures in the low 40s and high 30s are interspersed with several days in the upper 70s and low 80s. Frosts occur rarely. The official record low in Asuncion is 32°F, although the damp air and improper ventilation make it seem much colder. With frequent and abrupt changes, from winter to summer-like weather and back again (temperature changes of 20°F-50°F are common), a high incidence of respiratory and bronchial illness occurs in winter.

Relative humidity ranges between 67% and 78% (monthly averages) year round and is particularly high in summer. This causes problems in keeping certain foods crisp, and clothes and shoes may mildew.

Asuncion's average 59-inch annual rainfall is well distributed seasonally. Slightly greater amounts fall in hotter months. Torrential rains cause annual floods in riverside communities. The Chaco, which receives little rainfall, becomes semiarid in its western most reaches. During rainy periods, however, water covers large areas due to the impermeable clay subsoil.

Mosquitoes and a tiny gnat-like insect called "Mbarigui" are the most troublesome insects. Cockroaches appear at times in even the cleanest kitchens; but fast, good exterminators are available. Flies, ants, spiders, crickets, silverfish, and moths also prevail. Store woolen clothing in naphthalene during summer. Less common are rats, mice, bats, scorpions, and tarantulas. Depending on how developed a neighborhood is, animals in residential areas can include numerous stray dogs, cows, grazing mules and horses, and a few snakes. Children should avoid any unfamiliar animal.

Population

Much of Paraguay is sparsely populated. Most of its 5.2 million people are concentrated in the smaller eastern half of the country. About 600,000 people live in Asuncion, the political, economic, and cultural center of the country. Asuncion's population triples during the day with the influx of workers from surrounding cities. Nearly 35% of the country's population reside in the greater Asuncion metropolitan area.

Almost complete assimilation of the early Spanish settlers by the native Guarani Indians has developed a distinctive racially homogeneous Paraguayan strain, which makes up most of the population. The important minority groups include some 100,000 unassimilated Indians, representing 17 different ethnic groups.

As a result of the expansion of the Brazilian economy up to and across its border with Paraguay, about 300,000 Brazilians live in the border area where many engage in mechanized farming. This phenomenon continues on and has begun to cause some border tensions. Most of these immigrants are from southern Brazil, which is predominantly European. About 20,000 Argentines live along the Argentine border. Other minority groups include 40,000 Germans, 10,000 Koreans, 8,000 Japanese, 2,000 Chinese, 1,000 Poles, 300 French, and 300 English. Some 20,000 Russian, Canadian, Mexican, and U.S. Mennonites live in agricultural communities scattered throughout the country. Paraguay has traditionally welcomed immigrants.

The official U.S. community (including dependents and Peace Corps volunteers) numbers 290. Of the 2,836 nonofficial Americans registered at the Embassy, many are missionaries and business rep-resentatives and their dependents, along with some students and retired persons.

The Paraguayan population is predominantly Roman Catholic. The 1992 constitution recognizes religious freedom and states that no confession will have official character. The constitution also states that relations between the state and the Catholic Church are based on independence, cooperation, and autonomy. Although all religious groups had been tolerated, in 1979 the Paraguayan Government took legal action against groups such as the Jehovah's Witnesses, the Children of God, and the Hare Krishna movement, whose teachings on patriotic and family allegiances conflicted with Paraguayan law and custom. In a related attempt to restrict the growth of religious cults, recent legislation has prohibited the conferring of legal status on any new religious groups. Spanish is the language of government, business, and education and is used among the educated. Paraguayans are proud of their native heritage and of the Guarani language, also recognized as an official language.

Guarani is used almost exclusively in rural areas and is widely spoken in urban areas. Anyone learning even a few words of Guarani will find it greatly appreciated by Paraguayans.

Paraguayans are not as class conscious as some Latin Americans. All share a pride in their ethnic heritage and a fierce patriotism born of devastating, protracted wars with neighboring countries. Although extremes of wealth and want exist, display of great wealth is still uncommon; and conversely, abject poverty is less visible here than in many Latin American countries. Life, particularly in rural areas, can be hard, but social differences that divide groups are neither deeply felt nor well defined. This is due, in part, to the availability of land for those willing to homestead, to the almost total elimination of the landed Spanish aristocracy under the dictatorship of Jose Gaspar Rodriguez de Francia in the early 1800s, and to the leveling effect of the War of the Triple Alliance (1864-70), in which up to 70% of the male population was killed.

Public Institutions

Paraguay has had a turbulent political history. The area, first colonized in the early 16th century, achieved independence from Spain in 1811. Left with a legacy of authoritarian rule by its early leaders and nearly destroyed by the War of the Triple Alliance (1864-70), it has been plagued by a major conflict with Bolivia (Chaco War, 1932-35), periods of near anarchy, and civil wars interspersed with several prolonged periods of relative tranquillity. The last major conflict was the 6-month civil war of 1947.

On February 3, 1989, a coup d'etat overthrew 34 years of authoritarian rule. In May 1989, under the new President of the Republic, Paraguay began the long process of transition from authoritarianism to democracy. A new constitution took effect in June 1992, providing for a stronger Parliament, an independent judiciary, municipal autonomy, and limited decentralization of administrative authority.

Paraguay's two major, traditional political organizations, the Colorado and Liberal Parties, have each ruled the country for prolonged periods. Few ideological differences separate them. In 1991, a third party, the Encuentro Nacional, was formed. The Colorado Party, the dominant political force during the authoritarian years and the democratic transition, is likely to remain so for some time.

The traditional Liberal Party is split into several fragments. The largest of these, the Authentic Radical Liberal Party (PLRA), was the principal opposition party in the later years of authoritarian rule. The Liberals and "Encuentristas" hold a sizable minority of congressional seats. A small Christian Democratic Party (PDC) also participated in nationwide municipal elections in the early 1990s, but has had little active role since then.

In March 1999, the Vice President of Paraguay was assassinated in a plot widely attributed to a disaffected former Army commander who enjoyed the protection of Paraguay's President. After mass public protests several days later, in which several protesters were killed, both the President and the former Army commander fled the country. The then-Senate President became President of the Republic, in accordance with the Constitution, and formed a "national unity" government with members of the Liberal and Encuentro Nacional parties.

Although the military was highly politicized during the first years of the democratic transition, it remains an influential institution in Paraguay and ha; been supportive of the attempt to trans. form Paraguay into a modern democracy The army (10,000 troops), navy, and air force (1,000 each) lack modern equipment and training in many areas, but remain receptive to civilian control. It many isolated areas, the armed forces arc the sole representative of government.

Arts, Science, and Education

The Centro Cultural Paraguayo Americano (BNC) sponsors numerous cultural activities and has a 12,000-volume library with both Spanish and English titles, including one of the country's most complete collections of Paraguayan works. As well as teaching at average of 6,000 students English, the center offers concerts, theater, gallery shows, and lectures and seminars on various topics. The Center opened a second branch in 1998.

Of the fine arts, painting and graphics are the most developed in Paraguay The Contemporary Arts Museum, the Ceramics Museum, the Museo del Barro Manzana de la Rivera, and the U.S.

Cultural Center gallery, as well as other binational institutions, exhibit Paraguayan and foreign artwork throughout the year. Asuncion has a part-time symphony that performs during winter in various auditoriums. Paraguayan folk musicians perform at various sites throughout the year. Paraguay's most popular theater groups present Spanish and Guarani comedies at the city's several theaters. Ballet troupes perform occasionally at the Municipal Theater or other locales. Cultural missions of France, the ER.G., Argentina, Brazil, Japan, and the U.K. present music, theater, and films at their institutions.

Paraguay's two institutions of higher education are the National University of Asuncion and the Catholic University of Asuncion. Both have adjunct faculties in the larger cities of the interior.

Little scientific activity exists beyond instruction at the National University. Scientific museums include the Ethnographic Museum and the Museum of Natural Science.

Commerce and Industry

Paraguay is predominantly an agricultural country with vast hydro-electric potential but no known significant mineral or petroleum resources. The Paraguayan economy is extremely vulnerable to the vagaries of weather. It exports cotton, soybeans, cattle, and electricity. It also has a fairly lucrative business of reexporting products made elsewhere. Paraguay imports foodstuffs, machinery, transportation equipment, fuels and lubricants, and textiles. Its principal trade partners are Brazil, Argentina, Chile, U.S., and Western European countries. The U.S. maintains a healthy trade surplus with Paraguay. From a base of $375 million in 1991, U.S. exports to Paraguay rose to $913 million at the end of 1997. This represents a 24% annual increase. In 1998, Paraguay's total registered exports amounted to $1,002 million and total registered imports were $2,377 million.

Since the 1980s, the economy has experienced a series of peaks and valleys. The decade of the 80s began with the final 2 years of rapid construction of the Itaipu Dam (with the largest hydroelectric-generating capacity in the world) fueling annual growth of 10%. From this peak, the economy alternated periods of recession with modest growth. The 1988-89 period saw solid economic growth averaging 5% a year. During 1990 and 1991, the pace of expansion sustained by the Paraguayan economy in the preceding 2 years began to slow. From 1992-98 the economy has grown at an anemic 2.5% per year. The year 1999 was the second consecutive year of negative economic growth.

The February 1989 coup d'etat marked the end of 34 years of repressive regime and the beginning of a transition process to democracy in Paraguay. Since then, successive administrations have implemented modest economic reform packages and have flirted with privatization of state-run telephone, electrical, and water companies. Some reforms include the unification of the exchange rate, the elimination of preferential foreign exchange rates and foreign exchange controls, expenditure reductions, and implementation of a new tax code. In the financial sector, interest rates were freed, and new savings instruments were authorized. Price controls on some basic products were also eliminated, and tax incentives to encourage investment and attract foreign investors were provided. The Government is now studying privatization of state-run enterprises and modernization of the state. Paraguay continues to have one of the lowest foreign debts in Latin America.

Since ending the 34-year Stroessner dictatorship in 1989, the Government of Paraguay has made significant progress in reinserting the country into the world community. On March 26, 1991, Paraguay joined Argentina, Brazil, and Uruguay in signing the Treaty of Asuncion, to create Mercosur, a common market and customs union that went into effect in January 1995. Mercosur signed free trade agreements with Chile and Bolivia in 1996, and similar arrangements are under negotiation with Mexico, Peru, and the European Union. Paraguay became a member of the World Trade Organization (WTO) in January 1995.

Transportation

Automobiles

Driving is on the right. Although distances traveled within Asuncion are not great and travel into the countryside is not extensive or frequent, most find a car necessary here. Unleaded gasoline is available countrywide. Fuel prices vary considerably due to fluctuating exchange rates. Unleaded (97 octane) costs about $2.73 a gallon; regular gasoline (95 octane, unleaded with alcohol) $2.53 a gallon; regular gasoline (85 octane, unleaded with alcohol) $2.15 a gallon; and diesel fuel $0.92 a gallon (April 2000). Currently, unleaded gasoline is sold without alcohol additives; regular gasoline does contain some alcohol. Various U.S., Japanese, Brazilian, and European-origin cars are driven here. Many vehicles are available locally; costs are higher than vehicles from the U.S. Brazilian and Japanese vehicles are the most common, but none sold locally meet U.S. safety requirements and smog control specifications.

Sport cars with low-road clearance are unsuitable for local cobblestone streets and unpaved roads. A diesel-powered car or low-consumption compact would be most economical and would probably have fewer maintenance problems. U.S. cars hold up well, although obtaining spare parts can involve long delays when repairs are needed as many are not available locally. Most parts purchased here are expensive. Service is fair-to-good.

Local

Of Paraguay's 28,000-kilometer road network, 2,700 kilometers are paved. Some roads are graded earth or gravel and are susceptible to closure from rains and flooding for considerable periods of time. The southeast portion of the country, east of the Paraguay River, where the major economic activity of the country is concentrated, has the best roads. Most of the main towns in this area, and from Asuncion to Rio de Janeiro, Sao Paulo, Montevideo, and Buenos Aires, are linked by paved or all-weather roads. Considerable highway expansion and improvement is planned or in the construction stage. Emphasis is on making the Chaco more accessible year round, routing truck transport of agricultural products to the Brazilian Port of Paranagua, and integrating the hydroelectric projects at Itaipu and Yacyreta into the national economy.

Road travel is the most common transportation for domestic freight and passenger travel. More than 50% of road traffic consists of trucks and buses. Excellent bus service is available to Rio de Janeiro and Buenos Aires, but distances and travel times are long.

Public transportation in Asuncion consists of taxis and buses. Radio taxis are available and reliable either by phone or at stands throughout the city; they are more scarce at night. City bus routes are extensive, with fullest and most frequent service downtown. Unfortunately, bus stops and routes are not well marked. Buses are noisy, uncomfortable, and in ill-repair. During rush hours they are dangerously over-crowded. To add to the adventure, buses often slow down rather than stop to discharge and pick up passengers. Bus travel is not recommended.

Regional

Paraguay's external ties are mainly through air, road, and river transport. Great distances and poor and sometimes impassable roads limit overland travel. Most travel in the interior is for business, not pleasure.

Paraguay's most important transportation system is the inland waterway that connects Paraguay's inland ports with the Atlantic Ocean. It begins with the Paraguay River that runs north-south across the country and the Parana River that serves as a border with Brazil and Argentina, and continues past the Argentine Port of Rosario to Buenos Aires. Together with the Rio de la Plata, it constitutes a 3,170-kilometer system of transport, handling over 60% of the international traffic in the area.

Asuncion, the largest port, serves Paraguay's most important productive areas and is the only port with modern berthing facilities and cargo-handling equipment. Facilities are limited, however, and transit areas are very congested. With completion of the Itaipu, Yacyreta, and Corpus hydroelectric projects, water levels on the Parana River should increase from Encarnacion to Saltos del Guaira. This will open the Parana River to oceangoing vessels and increase the importance of both Encarnacion and Ciudad del Este as inland ports.

For other than leisure sightseeing, air transportation is the only practical means of international travel to and from Asuncion. Asuncion is served by Silvio Pettirossi International Airport, a Category 3 airport. As such, there are no direct flights via U.S. carriers to the U.S. TAM offers daily flights between the U.S. and Asuncion. American Airlines offers daily flights to Miami, New York, and Dallas through Sao Paulo, Brazil. Varig also offers daily flights to Miami or New York through Sao Paulo. Airlines connecting Asuncion with other capitals and major cities include: American Airlines, Aerolineas Argentinas, Varig, PLUNA, LAN Chile, Lloyd Aereo Boliviano, Iberia, and TAM. The internal airline, ARPA, operates with a Cessna Caravan from Monday to Friday. Domestic air traffic is small but important, as it is often the only means into other sections of the country, especially during bad weather. Airfields range from an all-weather airport under construction at Mariscal Estigarribia (halfway between Asuncion and Santa Cruz, Bolivia), where only military flights operate; to a restricted all-weather airport under the control of the Itaipu Binational Authority, north of Ciudad del Estate; to an International Airport named Guarani located in Minga Guazu, and to a few concrete strips in the more remote interior.

There is also daily bus service between Asuncion and Buenos Aires, Sao Paulo and Foz de Iguazu. There are very comfortable, air-conditioned executive buses, in addition to the regular buses.

Communications

Telephone and Telegraph

Asuncion's telephone system is good but suffers from maintenance and repair problems. Long-distance service is available almost worldwide, with good connections. Calls to the U.S. are normally of excellent quality. Costs for a long distance call to anywhere in the continental U.S. are: weekdays (Monday through Saturday) $2.23 a minute; Sunday, $2 a minute.

Access to AT&T's USA Direct is now available. Also, you can join MCI and U.S. Sprint calling systems.

An ordinary telegram to the U.S. costs about 31 cents a word (with a 7-word minimum). Night letter (telegram): 7-word minimum and 21-word maximum costs 16 cents a word.

All costs listed above and throughout this report change considerably, depending on the prevailing exchange rate.

Mail

The Paraguayan mail system is becoming more reliable, but do not send money or valuables through the mail.

Radio and TV

Asuncion has four TV stations and two cable TV stations: Channel 2, Channel 4, Channel 9, and Channel 13. Channel 9 and Channel 13 have their national networks on subsidiary channels. Cable TV is growing. The main cable companies, CVC/TVD and CMM, carry channels from Argentina, Brazil, Chile, Germany, Italy, Mexico, Spain, Venezuela, and the U.S. (ESPN, CMM carries HBO Ole, CVC carries CNN in English and Spanish).

The main news programs are transmitted by Channels 4, 9, and 13 at noon and at 8 pin and cover news from around the world. Most of the series shown come from the U.S. and are dubbed into Spanish.

The color system used in Paraguay is PAL-N (similar to Uruguay and Argentina). A bistandard set NTSC/PAL-N will allow you to watch TV and view American video movies. A good 20-inch bistandard (or "bi-norma") TV set currently costs about $350 if purchased here. U.S. color TV sets are not compatible with the PAL-N system. A bistandard video recorder would allow you to tape from local TV

Several video-cassette clubs operate in Asuncion. These clubs do not operate with the same standards found in the U.S., and selection of tapes is not as varied.

Paraguayan TV stations may be received on indoor antennas.

In Asuncion, some 10 AM stations and 12 FM stations are available. There are some 30 other stations outside of Asuncion. All broadcast popular and traditional Latin music, local news, and sports. Most of the FM stations transmit music in stereo, including the latest U.S. and British popular music.

For English-language broadcasts, bring a shortwave radio, or you can buy one locally. A simple longwire outdoor antenna can help to bring in shortwave stations.

Bring stereo equipment. The 50 cycle current means that in addition to the 110v-220v transformer, however, phonographs and tape recorders without DC motors require modification. Phonographs may require a different pulley; tape recorders may need a different capstan. Both can usually be bought from the manufacturer. If possible, have these adjustments made before arrival. Newer equipment, however, is multivoltage and multi-cycle (as is computer equipment). Please check before departure.

Newspapers, Magazines, and Technical Journals

Six independent daily newspapers are printed in Asuncion; one of them, Ultima Hora, has morning and afternoon editions. Ultima Hora and ABC Color have the largest circulations. Papers can be purchased from newsboys at street corners or at kiosks. Home delivery can also be arranged.

The following newspapers are located on the worldwide web as indicated: Ultima Hora at http://www.ultimahora.com.py; ABC Color at http://www.abc.com.py; Noticias El Diario athttp://www.diaiionoticias.com.py. Time, Newsweek, and People are sold at newsstands. The only English-language newspaper available is the Buenos Aires Herald, which usually arrives in Asuncion on the day of publication. Subscriptions from the U.S. arrive from 1 day to 2 weeks after being sent.

Many English-language periodicals may be read at the Roosevelt Library of the Centro Cultural Paraguayo-Americano, Asuncion's BNC.

Health and Medicine

Medical Facilities

Although several well-trained physicians and surgeons practice in the city and several hospitals are adequately staffed and equipped to handle most emergency medical and surgical problems, persons requiring complicated diagnostic work and all but minor surgery cases are normally evacuated to Miami. Many doctors are U.S. trained, including dentists, orthodontists, ophthalmologists, obstetricians, pediatricians, and surgeons. There are four hospitals used often by U.S. citizens and military personnel in the country. They are the Baptist Hospital with 44 beds, the Hospital Privado Frances with 55 beds, the Migone Hospital with 34 beds, and the Sanatorio San Roque with 66 beds. The four hospitals provide emergency rooms, intensive care units, lab and x-ray facilities, and doctors on 24-hour call.

Community Health

Most of Asuncion (73%) has a modern municipal water supply, and unfluoridated tap water connected to the system (CORPOSANA) is considered safe to drink. As a health precaution, however, all drinking water should be boiled and/or treated. Most hotels and larger homes are connected to the system. When contracting for a house, determine whether the CORPOSANA system has been installed. If not, note that well water, in and outside the city, must be boiled at least 10 minutes to ensure potability. Asuncion's sewers empty untreated waste into the Paraguay River. Many restaurants observe acceptable standards of health. Routine inspections are not considered to be reliable, however.

Milk is available in several forms. It is very safe to use long life milk which is available in all stores. The quality is good and it is sold at a good price. Powdered milk is also available.

Preventive Measures

Regional endemic diseases include measles, rabies, hepatitis, typhoid fever, tetanus, diphtheria, polio, parasitic diseases, and tuberculosis. Immunized healthy Americans taking normal sanitary precautions, however, are relatively safe from most diseases. Malaria suppressants are unnecessary. Be sure to have your Hepatitis A vaccine and other routine immunizations up to date before departing.

Certain precautions are important. Wash all vegetables and fruits thoroughly, and have yearly physical exams for all household help. Since hookworm is prevalent, wear shoes or sandals outdoors. Fungi infections are common during the hot summers, and allergies aggravated by the many lovely flowering trees are common. Frequent climatic changes, particularly in winter, cause colds and other upper respiratory infections.

NOTES FOR TRAVELERS

Passage, Customs & Duties

Travel time by air from the east coast to Asuncion is about 12 hours. American Airlines flies from New York, Washington, D.C Dulles, and Miami to Asuncion through Sao Paulo. Since delays are common, allow for adequate transit time where travel involves changes from one flight to another.

Ship travel from U.S. ports to Buenos Aires does not have regular service. From Buenos Aires, passengers for Asuncion can continue by plane or bus; however, air travel is more practical.

For entry into Paraguay by road, you will need all essential vehicle documents such as ownership and registration, certified in the form of a vehicle transit pass (Libreta de Paso) obtained from the automobile club of the country from which entry into Paraguay is made.

Travelers without Brazilian or Peruvian visas are not allowed out of the airport even if they have missed their connection. Peru requires visas in diplomatic and official passports, not in tourist passports.

Unaccompanied air baggage may take 6-8 weeks to arrive and be cleared in Asuncion. Include all essential items in your accompanied luggage.

A passport is required. U.S. citizens traveling as tourists or for business do not need a visa for stays up to three months. Persons planning on working, formally or informally, or staying longer than three months, may require a visa and should seek information from the Paraguayan Embassy or consulate on the corresponding visas prior to travel. Although Paraguayan law allows changes in visa status, the procedure is lengthy and can be cumbersome. In addition, individuals wishing to reside in Paraguay for any length of time should have their civil documents (birth and marriage certificates, etc.) certified and authenticated by the Paraguayan Embassy or Consulate in the U.S. as well as translated into Spanish. For current information concerning entry and customs requirements for Paraguay, travelers may contact the Paraguayan Embassy at 2400 Massachusetts Avenue N.W., Washington, D.C. 20008, telephone (202) 483-6960. Internet:http://www.embassy.org/embassies/py.html; or the Paraguayan consulate in Los Angeles, Miami, or New York.

Americans living in or visiting Paraguay are encouraged to register at the Consular Section of the U.S. Embassy in Asuncion and obtain updated information on travel and security in Paraguay. The U.S. Embassy is located at 1776 Mariscal Lopez Avenue; telephone (011-595-21) 213-715. The Consular Section is open for U.S. citizens services, including registration, Monday through Thursday from 1-5 pm and Friday from 7:30 am to 11:30 am, except for U.S. and Paraguayan holidays. The Consular Section's Internet e-mail address is:usaconsulasuncion@hotmail.com. (This e-mail address is not checked on a regular basis.)

Pets

All types of pets may be imported. A USDA veterinary certificate of good health and certificate of inoculation against rabies (at least 15 days prior to travel) are the only required documents. If you are staying overnight or transiting along the way before reaching Asuncion, permission to have your pet enter that country will be needed. All pets may be exported as well, except birds and wild animals indigenous to Paraguay. Pets purchased locally should be inoculated against distemper and rabies every 6 months.

Firearms and Ammunition

All firearms must be registered in country with the local government.

Currency, Banking, and Weights and Measures

The monetary unit of Paraguay is the Guarani and can be purchased with dollar instruments in the fluctuating free market through licensed banks and exchange houses. The rate of exchange (ROE) is about US$1=G3,503 (June 2000). Currently, only one U.S. bank remains active in Paraguay and that is Citibank N.A. Paraguay officially uses the metric system of weights and measures.

LOCAL HOLIDAYS

Jan. 1 …New Year's Day

Mar. 1…Heroes Day

Mar/Apr. … Holy Thursday^*

Mar/Apr. … Good Friday^*

Mar/Apr. … Easter^*

May 1…Paraguay Labor Day

May 15…Paraguay Independence Day

June 12 …Chaco Armistice

Aug. 15…Founding of the City of Asuncion

Sept. 29 …Victory at Boqueron

Dec. 8 …Virgin of Caacupe Day

Dec. 25 …Christmas Day

^*variable

RECOMMENDED READING

The following titles are provided as a general indication of the material published on this country:

Abou, Selim. Jesuit Republic of the Guaranis (1609-1768) and Its Heritage. Crossroad Pub. Co.: New York, 1997.

American University. Area Handbook for Paraguay. U.S. Government Printing Office: Washington, D.C., 1990.

Arnold, Adlai E. Foundations of an Agricultural Policy in Paraguay. Praeger: 1971.

Attenborough, David. The Zoo Quest Expeditions. Penguin Books: New York, 1982. This paperback reedition of three of Attenborough's books includes his Zoo Quest in Paraguay. Anecdotes about filming and collecting animals.

Barrett, William E. Women on Horseback: The Story of Francisco S. Lopez and Elisa Lynch. Doubleday: Garden City, 1969. A novel about Francisco Solano Lopez and the famous Madame Lynch.

Brodsky, Ayln. Madame Lynch and Friend. Harper & Row: New York, 1975. A biographical account of the lives of Irish adventurer Elisa Lynch and Francisco Lopez.

Durrell, Gerald. The Drunken Forest. Rupert Hart-Davis: London, 1956. Amusing account of animal collecting in Argentina and the Paraguayan Chaco Region.

Fretz, Joseph Winfield. Immigrant Group Settlements in Paraguay. Bethel College Press: North Newton, Kansas, 1962.

Fretz, Joseph Winfield. Pilgrims in Paraguay. Bethel College Press: North Newton, Kansas, 1953. Both are studies of colonization by Mennonite and other immigrant groups, mainly European and Asiatic in Paraguay by an American Mennonite scholar.

Frings, Paul. Paracuaria: Art Treasures of the Jesuit Republic of Paraguay. Matthias-Gronewald-Verlag: Mainz, Germany, 1982. This book, with texts in English, Spanish, and German, contains information about the Jesuit ruins in Paraguay and efforts to restore the ruins. Includes background information on the Jesuit republic and photographs of the art works.

Garner, William. The Chaco Dispute: A Study of Prestige Diplomacy. Public Affairs Press: Washington, D.C., 1966. The only English-language diplomatic history of the Chaco War. (1928-1938).

Greene, Graham. The Honorary Consul. Simon & Schuster: New York, 1973. (Also available in paperback from Pocket Books, a subsidiary of Simon & Schuster.) A popular novel about a British Honorary Consul who is mistaken for an American Ambassador and is abducted and held by Paraguayan revolutionaries.

Greene, Graham. Travels With My Aunt. Bantam Books: New York, 1971. In this comic novel, Henry and his aunt Augusta travel to Paraguay.

Hay, James Eston. Tobati: Tradicion y cambio en un pueblo paraguayo. CERI/Universidad Catolica, Pilar: Asuncion, 1999. An analysis of the change and development of a small Paraguayan town, Tobati. [This book should be available in English by 2002. English language copies may be obtained at research libraries, through University Microfilms or through Inter-Library Loan: Hay, James Eston, Tobati: Tradition and Change in a Paraguayan Town. Ph.D. Dissertation, University of Florida, 1993.]

Kolinski, Charles J. Independence or Death. University of Florida Press: Gainesville, Florida, 1965. A history of the War of the Triple Alliance, 1865-70.

Lambert, Peter and Nickson, Andrew, Eds. The Transition to Democracy in Paraguay. St. Martin's Press, Inc.: New York, NY, 1997. The most up-to-date assessment of Paraguay after the transition from the Stroessner dictatorship.

Land of Lace and Legend, An Informal Guide to Paraguay. Compiled by Las Amigas Norteamericanas del Paraguay, 1977. It describes many features of life in Paraguay.

Lewis, Paul. Socialism, Liberalism, and Dictatorship in Paraguay. Praeger: New York, 1982. This book places General Stroessner and his regime into the context of Paraguay's political culture. It deals with the struggles between Liberals and those who represented an indigenous socialism, shows how Stroessner rose to power, and describes his regime's structure and organizational support. Stroessner's policies with respect to economic development and foreign affairs are described and the state of the opposition under Stroessner is discussed.

Lewis, Paul H. Paraguay Under Stroessner. The University of North Carolina Press: Chapel Hill, 1980. A political biography of the President of Paraguay that is rich in historical background and anecdotal detail. An excellent and educational book on contemporary politics of Paraguay.

McNaspy, C. J. Lost Cities of Paraguay: Art and Architecture of the Jesuit Reductions, 1607-1767. Loyola University Press: Chicago, 1982. Gives an account of the Jesuit Reductions (missions) and describes sites in Paraguay, Argentina, and Brazil. The best book in English to date on this subject.

Miranda, Carlos R. The Stroessner Era: Authoritarian Rule in Paraguay. Westview: Boulder, 1990. The author describes the political culture of, and the history of authoritarianism, in Paraguay before embarking on an in-depth study of the ideological bases of the Stroessner era, the politics of control of the Stroessner regime, and economic development and the pattern of co-optation during his dictatorship. He also examines the reasons for the demise of the Stroessner regime.

Pendle, George. Paraguay, A Riverside Nation. Third Edition, Royal Institute of International Affairs:1967. This short volume reads like an extended encyclopedia article. Recommended as the best single book dealing with the historical, economic, and sociological aspects of Paraguayan life. Includes a comprehensive annotated bibliography.

Raine, Philip. Paraguay. Scarecrow Press: New Brunswick, New Jersey, 1956. An informative, comprehensive treatment by a U.S. Foreign Service officer.

Sergice, Elman R. and Helen S. Tobati. A Paraguayan Town. University of Chicago Press: Chicago, 1954. A detailed study of life in a representative rural town.

Warren, Harris G. Paraguay, An Informal History. University of Oklahoma Press: 1949. Probably the best book in English for a historical overall view of the country.

Stover, Richard. Six Silver Moon-beams: The Life and times of Augustin Barrios Mangore. Querico Pubs.: Clovis, CA, 1992. This book is a comprehensive and authoritative biography of the world's greatest guitarist/composer, Agustin Pio Barrios (1885-1944), also known as Nitsuga Mangore. This extensive treatment of Barrios' life and music brings to light many facts about the amazing "Paganini of the guitar from the jungles of Paraguay."

Paraguay and the Triple Alliance: The Post-war Decade, 1869-1878. University of Texas Press: Austin, Texas, 1978. A well-written, well-researched study of the years after Paraguay's disastrous war with Brazil, Argentina, and Uruguay.

Warren, Harris Gaylord. Rebirth of the Paraguayan Republic: The First Colorado Era, 1878-1904. University of Pittsburgh Press: Pittsburgh, 1985. Warren writes a comprehensive history of Paraguay, based primarily on archival sources, from the watershed years of 1869-1870 to the Colorado defeat in 1904.

Washburn, Charles A. The History of Paraguay. Two volumes, 1871. An interesting autobiographical and historical account by an American diplomat in Paraguay at the time of the War of the Triple Alliance.

Whigham, Thomas. The Politics of River Trade, Tradition and Development in The Upper Plata, 1780-1870. University of New Mexico Press: 1991.

White, Edward Lucas. El Supremo. Durron: New York, 1934. A good historical novel of Paraguay under Dr. de Francia.

White, Richard Alan. Paraguay's Autonomous Revolution: 1810-1840. University of New Mexico Press: Albuquerque, 1978. A new look at the revolution carried out by Dr. de Francia following independence.

Williams, John Hoyt. The Rise and Fall of the Paraguayan Republic, 1800-1870. University of Texas Press: Austin, Texas, 1979. Examines this critical period of Paraguayan history as a period rather than a study of personalities.

Zook, David H., Jr. The Conduct of the Chaco War. Bookman Associates: New Haven, Connecticut, 1960. An interesting, in-depth treatment of this little-understood war from a politico-military viewpoint.

The following Internet sites are a few of many with information on Paraguay:http://travel.state.gov/paraguay.htmlhttp://www.odci.gov/cia/publications/factbook/pa.htmlhttp://lcweb2.loc.gov/frd/cs/pytoc.htmlhttp://www.wtgonline.com/data/pry/pry.asphttp://www.latinworld.com/sur/Paraguay/http://travel.lycos.com/Destinations/SouthAmerica/Paraguay/.

Paraguay

Culture Name

Paraguayan

Orientation

Identification. The name "Paraguay" derives from the river that divides the eastern half of the nation from the western Chaco region. The vast majority of the population (95 percent) shares a Paraguayan identity, but several other cultural identities exist. The indigenous population is composed of seventeen ethnic groups from five linguistic families. Most immigrants have blended into the national population, but several groups have maintained distinct identities and cultures. Those groups include Mennonites, who settled in the western (Chaco) and the northern regions early in the early twentieth century; Japanese, who settled in agricultural colonies primarily during the 1950s and 1960s; and more recent Korean, Lebanese, and ethnic Chinese immigrants, who have settled in the urban centers of Asunción and Ciudad del Este since the 1970s. In the 1960s and 1970s, large numbers of Brazilian immigrant farmers moved to the eastern frontier region and became the backbone of the soybean export sector. By the 1990s, a second generation of Brazilians had been born and raised in Paraguay, and a few intermarried with the local population. These brasiguayos form a distinct subgroup.

Location and Geography. Paraguay is a land-locked nation of 157,047 square miles (406,752 square kilometers) in South America, surrounded by Brazil, Argentina, and Bolivia. The inhospitable and semiarid Chaco forms the western part of the nation. Flat and infertile, much of it covered by scrub forests, the Chaco contains approximately 61 percent of the national land area but less than 3 percent of the population. In contrast, eastern Paraguay has rolling hills, richer soils, lush semitropical forests, and grassy savannas. The region so impressed early explorers that they called it a "second Eden." Temperatures are high in a humid subtropical climate in the summer months of October to March, while in the winter months of July to September night frosts may occur. Rainfall occurs throughout the year but is usually heaviest between October and April; annual variations can be extreme.

The capital, Asunción, lies on the Paraguay River at the point dividing eastern and western Paraguay. The city was founded in 1537 by Juan de Salazar y Espinoza, a Spanish explorer who led an expedition upriver from the fort at Buenos Aires. Befriended by the local Guarani, he established the fort of Nuestra Señora de la Asunción overlooking the bay where Asunción now stands. The Asunción cabildo (city council) was established in 1541. Asunción has dominated national society and politics since that time.

Demography. In 1999 the population was estimated to be 5,222,000. Approximately 95 percent of the population is mestizo. The population has more than tripled since 1950 and is growing 2.5 percent annually, with a total fertility rate of 3.8 children per woman. The growth rate has declined slightly from the period preceding 1975. The population is relatively young; 40 percent is under age 15, and only 5 percent is sixty or older.

Population figures for the ethnic populations are disputed. Estimates place the indigenous population at less than 3 percent of the national population. The largest groups are the Enxet Lengua, Pai-Tavyter, Nivaclé (Chulupí), Chiripá, and Mbyá. The Japanese settlers and their descendants are estimated to number about eight thousand, and the Mennonites approximately fifteen thousand. There are no reliable estimates for Korean, Chinese, and Brazilian immigrants and their offspring. The 1992 census counted only several thousand Korean and Chinese immigrants, but observers place their numbers between thirty thousand and fifty thousand. Most observers estimate that between 300,000 and 350,000 Brazilians settled in eastern Paraguay in the 1960s and 1970s.

Linguistic Affiliation. The majority of the people speak an indigenous language, although they do not self-identify ethnically as indigenous. Guarani, a Tupi Guarani language and the language of eastern Paraguay's dominant precolonial indigenous population, is recognized as an official national language along with Spanish. Spanish is the language of business and government, and Guarani is spoken in everyday life. According to the 1992 census, nearly half the population speaks both Guarani and Spanish in the home and 39 percent speaks only Guarani. In rural areas and among the lower social classes, Guarani is the dominant language. Although most schooling is conducted in Spanish, children are required to study Guarani as well. There is considerable lexical borrowing and linguistic code switching in informal conversation.

The use of Guarani Language does not imply indigenous ethnicity; it is the language of the national culture. The form of Guarani spoken in the national culture is somewhat different from that used by indigenous Guarani speakers, and many indigenous people speak non-Guarani languages. Religion, residence, and community affiliation—not language—are the cultural markers of indigenous identity. Historians attribute the prominence of the Guarani language in the national culture to extensive interbreeding between Spanish men and Guarani women from the earliest colonial times.

Symbolism. The most powerful symbols of the national culture are the Guarani language and imagery derived from Paraguay's national history, especially its wars. More than a means of communication, Guarani is a powerful marker of national identity that can be used to assert unity among Paraguayans of disparate social classes and political persuasions, especially in contrast to foreigners. Related images of Paraguay's indigenous heritage that also symbolize the national culture include traditional harp music, certain foods, and crafts.

The national territory and sovereignty and the great sacrifices Paraguayans made historically to defend that territory and sovereignty figure prominently in the national imagery and tradition. The War of the Triple Alliance (1865–1870), in which Paraguay fought against Brazil, Argentina, and Uruguay, continues to haunt the national consciousness and remains a potent national symbol. The Chaco War (1932–1935)also symbolizes the sacrifices Paraguayans have made to defend their homeland. Key battles are commemorated with national holidays. The dominant imagery is that of blood shed to defend the national patrimony.

History and Ethnic Relations

Emergence of the Nation. The origins of the modern population lie in the cultural and biological mixing that occurred in the earliest period of Spanish contact. The Guarani were horticulturists organized in chieftainships based on extended kinship. Although they traced descent patrilineally, they had matrilocal settlement patterns and alliances were formalized through the exchange of women. Few women came with the handful of Spanish explorers who established the fort of Nuestra Señora de la Asunción in 1537. The Guarani caciques (chiefs) exchanged women to formalize their alliance with the Spanish against the hostile peoples of the Chaco. The Paraguayan people trace their origins to the children of those unions.

National traditions of autonomy and pride also have their origins in the early colonial years. Distant from colonial centers and lacking the mineral wealth of other regions, the colony remained isolated and impoverished. The Spanish landowners and encomenderos (recipients of Colonial grants to the labor and other tribute of specified indigenous groups) sometimes overruled and even overthrew the appointed governor. Colonial politics were tumultuous, with intense rivalry among the early conquerors and between the settlers and their economic rivals, notably the Jesuit missions. Colonists also chafed under the economic dominance of Buenos Aires and taxation of their exports by the Argentinians. The colony faced military threats from hostile indigenous peoples, Brazilian slave hunters, and Portuguese attempts to annex part of the colony. Left to their own devices by the Spanish, the colonists had to defend themselves against those threats by raising citizen militias and arming themselves as best they could, and as a result the colony has been described as the most militarized in Latin America. The colony was so impoverished and isolated that visitors commented on the obsolescence of the colonists' arms. Until the final years of the colonial period, barter was the normal means of exchange and the economy was based largely on subsistence activities. This period thus established the tradition of ethnic mixing, local self-sufficiency based on isolation and poverty, the need to defend life and land against continuous threat, and resentment of economic exploitation by Brazil and Argentina.

These orientations were reinforced by the experiences of the nineteenth century. After Argentinians deposed the Spanish viceroy in 1810, they attempted to extend their control to include the territory of Paraguay. Paraguayans resisted and in 1811 defeated the Argentinian army at the battle of Paraguari. In May of that year, Paraguayans overthrew the last Spanish governor. After several years of political maneuvering, José Gaspar Rodríguez de Francia emerged as the leader of the new republic and was elected perpetual dictator by the Popular Congress in 1816. Popular, iron-fisted, and fiercely nationalistic, Francia implemented policies that benefitted ordinary residents while limiting or destroying the power of the Spanish and creole elites, the Catholic Church, the mercantile houses, and the landed estates. Although he was derided by foreign critics and enemies as an isolationist madman who drove his country into poverty, scholars now argue that Francia expanded internal and external trade. However, he permitted trade only under his supervision, guaranteeing that the nation reaped the benefits, and strictly controlled the movements of foreigners in the national territory.

After Francia's death in 1840, the presidency was assumed by Carlos Antonio López and then, in 1862, by López's son, Francisco Solano. In 1864, Francisco Solano López declared war on the powerful Triple Alliance of Brazil, Argentina, and Uruguay. The events that provoked López's declaration of war are debated. Although his motivations were long dismissed as megalomaniacal pretensions, some recent analysts have argued that López was forced into declaring war to preempt Brazilian and Argentinian designs to assume dominion over their smaller neighbors, including Paraguay. This disastrous war resulted in the death of most Paraguayan men and many women and children and destroyed the nation's economy. It also ended Paraguay's brief period of self-determination and relatively egalitarian prosperity. Only the intervention of the U.S. president, Rutherford B. Hayes, in 1878 prevented Argentina from claiming a large part of western Paraguay. Argentina became the middleman for most of Paraguay's international trade, and foreigners acquired vast expanses of the nation's land.

The War of the Triple Alliance left Paraguay a nation largely of small farmers engaged in the production of basic food crops for subsistence and local trade. Ethnically and culturally, the population was homogeneous, with the family serving as the basic socioeconomic unit. Although the small political elite that emerged after the war emulated European styles, the vast majority of the population spoke Guarani and led a subsistence lifestyle based on indigenous and Spanish customs interwoven by the hardships of life on an isolated and impoverished frontier.

National Identity. The national identity derives from these historical antecedents. Although the Guarani language is its most salient symbol, that identity is not based on an actual or mythologized pre-Columbian Guarani past. Instead, it has its origins in the fusion of indigenous and Spanish peoples in colonial times and was shaped by threats to territory and sovereignty from the earliest colonial times. The strong sense of national identity also has been nurtured by the homogeneity of the population throughout the country's modern history.

Ethnic Relations. Despite the alliance of the Guarani and Spanish peoples that gave rise to the nation, Paraguayan relations with indigenous peoples typically have been marked by hostility and exploitation. Spanish colonists faced continual threats from the indigenous groups in the Chaco and repeatedly launched armed campaigns against them. Although the Guarani gave women to the Spanish to cement their alliance, the Spanish took many more women, as well as food and other goods, by force. The Spanish also quickly organized to establish their control over Guarani labor through the encomienda system. While Francia recognized the land claims of some indigenous villages, Paraguayans later appropriated indigenous land through force, fraud, and bureaucratic maneuvers. Indigenous peoples remain at the fringes of the national society.

Relations with Mennonite and Japanese settlers have been limited to occasional bureaucratic and economic transactions. These immigrant enclaves, located primarily in remote rural areas, maintain their own economic, social, and cultural institutions and in most cases have greater economic resources than do the surrounding Paraguayan communities made up primarily of small farmers. Intermarriage is rare and is disapproved. Paraguayans perceive the immigrants as disdaining and rejecting the national culture.

In the 1970s and 1980s, critics charged that the influx of Brazilian immigrants threatened Paraguayan culture and national sovereignty in the eastern frontier region. However, most of those immigrants settled in ethnically homogenous communities, and there was little direct contact between them and the local population. Although there have been some confrontations between Paraguayan and Brazilian farmers over land, most conflicts have involved large tracts of land claimed by absentee owners rather than land farmed by immigrant settlers.

Urbanism, Architecture, and the Use of Space

Until the mid-1970s, the majority of residents lived in rural areas, nearly all in the central region surrounding Asunción. Most lived on farmsteads in small adobe houses with palm-thatched roofs, with their fields surrounding the house. Towns were of typical Spanish colonial design, built around a central plaza and home to a few administrative, craft, and professional workers and shopkeepers. The central institutions of the national government as well as religious and educational institutions, commerce, and industry were and still are in Asunción.

Since the 1970s, the population has become increasingly urban, and by 1992, just over 50 percent lived in urban areas. Asunción is the largest urban center, with an estimated population of 550,000. The extension of roads, the construction of massive hydroelectric works on the eastern border, and agricultural colonization programs drew people from the central regions to the sparsely populated border regions, especially along the eastern border with Brazil. Ciudad del Este, founded in 1963, is now the second largest city and a major commercial center, with an estimated population of 234,000.

Food and Economy

Food in Daily Life. Corn, mandioca (cassava), and beef form the basic diet. Typical dishes include locro (a corn stew), sopa paraguaya (a rich corn flour and cheese bread), chipa guazú (a cross between sopa paraguaya and a corn soufflé), and mbaipy so'ó (corn pudding with beef chunks). Mandioca root is commonly served boiled, and its starch is a main ingredient of several traditional foods, including chipa (a dense, baked bread of mandioca starch and cheese) and mbejú (an unleavened fried bread). The main meal of the day is eaten at noon and usually includes corn- or mandioca -based food. A wide variety of tropical and semitropical fruits also are eaten. Drinks made of yerba maté (Paraguayan tea) are ubiquitous. The tea may be drunk hot (maté ) or cold (tereré ), and medicinal herbs often are added. The leaves also may be toasted and boiled to make a tea that is served at breakfast or for a late afternoon snack.

Food Customs at Ceremonial Occasions. Special family celebrations and social gatherings call for an asado, or barbecue, with beef roasted over open fires and accompanied by boiled mandioca and sopa paraguaya. Chipa traditionally is prepared for the major religious holidays of Christmas and Holy Week. Special meals during these holidays also may include an asado of beef or a pit-roasted pig.

Basic Economy. Paraguay's currency is the guarani, with an exchange rate of approximately 3500 guarancies to one U.S. dollar in 1999. Until recently the economy was primarily rural and agricultural. The majority of the population, peasant farmers, produced subsistence crops as well as cash crops of cotton or tobacco. Approximately 40 percent of the population is still involved in agriculture, and the majority are small farmers who engage to some degree in subsistence production. Agriculture, together with forestry, hunting, and fishing, accounts for 25 percent of the gross national product (GDP) and nearly all exports. Paraguay has few mineral resources, but its rivers have made hydroelectric power generation a major source of revenue. The manufacturing sector is small (15 percent of GDP). The economy also has a very large informal sector composed of thousands of urban street vendors, domestic workers, and microenterprises. An estimated 10 percent of the labor force was unemployed in 1996, and almost half was underemployed. Despite government promises of reform, public sector employment, long a major source of political patronage, has continued to grow, increasing 17 percent from 1989 to 1995.

Although the country is largely self-sufficient in the basic foodstuffs of corn, mandioca, and wheat, it depends on imports for processed foods, other consumer goods, capital goods, and fuels. Although many small farmers continue to rely on their own production for food, they have been drawn into the market economy to purchase processed goods such as soap, cooking oil, clothing, medicine, and other basic consumer items.

Land Tenure and Property. Land distribution is among the most unequal in Latin America. According to the 1991 agricultural census, 77 percent of the agricultural land was owned by barely 1 percent of the population. At the other extreme, small farms of less than 49.4 acres (20 hectares), accounting for over 80 percent of all agricultural holdings, occupied only 6 percent of the agricultural land.

Although the system of land tenure is based on private property, common practice and historical tradition play an important role in shaping notions of land rights. Peasants have long claimed the right to occupy unused public lands for agricultural purposes. Mechanisms for formalizing occupation rights were specified in twentieth century legal codes and the 1967 constitution, which recognized the right of every citizen to a plot of land. The right to own land for investment or speculation is viewed by the majority of the rural population as secondary to the right of peasants to use land for subsistence. While some peasants own clear title to the land they cultivate and some rent or sharecrop, informal occupation of land is widespread.

The private property regimen is complicated by a long history of bureaucratic fraud and ineptitude. During the Stroessner dictatorship (1954–1989), large tracts of land were illegally transferred to Stroessner's relatives and cronies, and some peasant and indigenous communities were violently displaced as powerful military figures took over their lands. Although most land claims have been regularized in central Paraguay, conflict over land continues to be a source of unrest in the eastern and northern frontier regions, where many titles are of questionable origin. Indigenous groups have lost vast expanses of their land and face legal and physical threats as a result of their efforts to gain recognition of their claims.

Commercial Activities. Agriculture and hydroelectric power account for the majority of commercial production. Major agricultural goods produced for sale include grains, oilseeds (soybeans), cotton, sugarcane, tobacco, meat and poultry, mandioca, fruits and vegetables, lumber, eggs, and milk. Large estates and immigrant settlers produce most of the grains, oilseeds, and beef. The Mennonites are known for dairy production. Small farmers produce mandioca, cotton, tobacco, and sugarcane as well as fruits and vegetables for sale on the domestic market. A multitude of microenterprises and artisans produce bricks for construction, clothing, furniture, and other small consumer items.

Because of lax border controls and low tariffs, resale and transshipment of goods account for a significant part of the commercial economy. These activities range from illicit transshipment of cocaine and other drugs from producing countries to the markets of North America and Europe to the resale of clothing, vegetables, and other inexpensive consumer items by individuals who purchase them in Brazil or Argentina and bring them into the country without paying import duties.

Major Industries. Aside from hydroelectric power generation, the major industries are heavily dependent on the agricultural sector. Small industries process flour, beer, cigarettes, soap, shoes, and furniture. There is some oilseed processing, meatpacking, and textile production, but most of the beef, cotton, and soybeans are exported in their raw state rather than being processed domestically.

Trade. No reliable figures on international trade exist because a large part of that trade consists of the reexportation and transshipment of licit and illicit goods. The major recorded exports include soybeans and cotton, meat products, and timber. Half of Paraguay's international trade is with nations in the Southern Cone Common Market (Brazil, Argentina, and Uruguay). Brazil is the most important trade partner, followed by the Netherlands, which imports soybeans for crushing. Unrecorded reexports include a wide variety of goods that range from cigarettes to automobiles, contraband compact discs, and drugs. Paraguay's major imports include machinery, vehicles, spare parts, fuels and lubricants, and alcoholic beverages and tobacco, much of which is reexported. Brazil and Argentina provide most of Paraguay's imports, followed by the United States and Japan.

Informal international trade centers on Ciudad del Este, which depends heavily on shopping "tourism." Brazilians and Argentinians travel to Ciudad del Este to take advantage of the low import duties to purchase consumer electronics, office equipment, perfumes, whiskey, cigarettes, and other consumer items. This trade, along with illicit trade through the area, has earned Ciudad del Este notoriety as a smuggler's paradise. Shopping tourism declined in 1997 and subsequent years, because of weakening economic growth in Brazil and Argentina and stricter controls by Brazilian authorities.

Division of Labor. A person's economic position depends primarily on education and social status, with access to many positions in the government bureaucracy and state enterprises and sometimes private enterprises also dependent on a personal connection with politically powerful benefactors. Among the poor and working classes, young children are expected to help assure family survival by assisting in agricultural production or working outside the home. Among small farmers, most agricultural labor is provided by family members. However, peasant farmers still practice a form of cooperative labor known as minga, in which at critical times in the agricultural cycle neighbors or kin work together to prepare or harvest each other's fields.

Social Stratification

Classes and Castes. Wealth and income distribution are extremely unequal. A small elite owns most of the land and the commercial wealth and reaped most of the benefits of economic growth in recent decades. Recent surveys indicate that 20 percent of the population of the greater Asunción metropolitan area and 60 percent of the population in rural areas live in poverty. Indigenous peoples are the most impoverished. Mennonite and Japanese immigrants have established thriving agricultural colonies, while the more recent Korean, Chinese, and Arab immigrant groups are concentrated in urban commercial activities and reexportation. Brazilian immigrants are disproportionately concentrated in midsize commercial farming enterprises but also include extremely impoverished small farmers and laborers as well as wealthy landowners and middle-class entrepreneurs.

Symbols of Social Stratification. Language is an important marker of social status. Members of the upper classes primarily speak Spanish in public and in private, although they may understand Guarani. Members of the poorer social groups speak Guarani primarily or exclusively, and may have only a limited understanding of Spanish. The social distance between classes has traditionally been extreme, and peasants or workers were expected to show deference toward members of the political and landowning elite.

Political Life

Government. Paraguay is a republic consisting of the city of Asunción and seventeen additional departments, which are further subdivided into local administrative units known as municipios. The executive branch consists of the president and vice president, who are directly elected to five-year terms, and a council of ministers appointed by the president. The legislative branch is made up of the Senate and the Chamber of Deputies, which also are directly elected for five-year terms. The judiciary, including the Supreme Court, is appointed. In 1991, Paraguay initiated direct election of departmental and municipal executives and councils.

Contemporary political life has been shaped by General Alfredo Stroessner's thirty-five year dictatorship. After assuming power in a military coup in 1954, Stroessner ensured his control by fusing the ruling Colorado Party, government bureaucracies, and the military. Compliance to his personable authoritarian rule was achieved through a combination of brutal repression and patronage. Stroessner assured the allegiance of top military leaders and political cronies through grants of land, lucrative state contracts, and control of profitable smuggling activities. Benefits ranging from government posts to seeds were distributed to Colorado Party supporters, with the patron-client chains extending down to the poorest neighborhoods and rural towns. Although a formal judicial system existed, de facto adjudication was by the law of mbareté (the rule of the strong), in which the more powerful party or the party with the more powerful benefactor prevailed, thus ensuring the dominance of Stroessner's allies.

In February 1989, Stroessner was removed from power in a coup led by General Andrés Rodríguez. Although Rodríguez was a longtime Stroessner ally, he carried out his promise to lead the nation to a more democratic government. Freedom of the press, freedom of association, and other basic rights are recognized, and civilian officials have gained office through open elections. However, the Colorado Party remains strongly entrenched, and many of Stroessner's top allies and officials are still in high government and party posts.

Leadership and Political Officials. Paraguay's two major political parties, the Colorados (National Republican Association), and the Liberals (Authentic Radical Liberal Party, have their roots in the period of the Triple Alliance. Affiliation with a political party commonly is based on family and personal ties. Both parties have hierarchical organizations with competing internal factions. In 1993, a new party, the Encuentro Nacional, was formed to challenge the traditional parties. Its strongest support is among younger, more educated urban voters. Several smaller parties also exist. There is little substantive difference among the major parties. Access to leadership positions is through the party hierarchy and personal ties.

Social Problems and Control. Paraguay has a civilian police force responsible for public order and a legal system based on French and Roman law. At the local level, justices of the peace and magistrates are responsible for administrative and criminal proceedings. There are also courts of appeal, the Tribunal of Jurors and Judges of First Instance, and judges of arbitration.

Street crime and violence increased during the 1990s with worsening economic conditions. The police force is widely perceived as corrupt and complicit in some crime. The judiciary has been the least affected among all the branches of government by the post-Stroessner political reforms, and local magistrates and justices of the peace are seen by many people as available for purchase, especially in rural areas. Government corruption at all levels is pervasive and contributes to widespread public cynicism toward politics and government.

Conflict over land intensified dramatically in the 1990s, especially in the north and the eastern border region. While there have been reports of peasant farmers taking up arms, most of the violence has been directed against them. Landowners (whether or not they have legitimate title) have employed private gunmen to defend their claims and have forcibly and illegally evicted occupants and destroyed their homes and crops. In the early 1990s, a number of peasant leaders were assassinated. The government has made no significant moves toward land reform and has acted slowly to resolve conflicting claims.

Military Activity. Under Stroessner, Paraguay was one of the most heavily militarized nations in the world, with an extremely high ratio of police and military personnel to civilian population. Military personnel enjoyed great benefits and power. Efforts to depoliticize the military since 1989 have been tenuous, and military privileges remain considerable. In April 1996, General Lino Oviedo led an attempted coup against then-president Guillermo Wasmosy. Although most of the military remained loyal to Wasmosy and the coup was unsuccessful, Oviedo later ran for and the won the Colorado Party's nomination for president. His candidacy eventually was nullified and he was imprisoned, but the resultant political uncertainty immobilized the government. Although the military has refrained from intervening directly in recent political affairs, it is never far from the halls of power.

Social Welfare and Change Programs

The government runs a system of underfunded and understaffed public health posts and hospitals and provides retirement benefits for employees of the government and state enterprises and veterans of the Chaco War. Nominal government programs to benefit peasants and indigenous peoples are ineffective and corrupt. Religious organizations and nongovernmental agencies provide some social services and play a central role in promoting change.

Nongovernmental Organizations and Other Associations

Workers are represented through four major unions. Currently, three confederations of peasant organizations work to promote peasants' interests in national public policy discussion and occasionally intervene to support peasants in land conflicts. A number of regional peasant organizations assume similar roles at the local level and promote local development initiatives. A number of trade and business associations exist, the most powerful of which represent the interests of rural landowners and ranchers, cotton exporters, and grain enterprises. Since 1989, a large number of nongovernmental organizations and associations have been formed, with interests ranging from the promotion of sustainable development to advocacy for women, street children, and indigenous peoples. Although the number of people directly involved in these organizations is small, they play an important role defending human rights and promoting social change.

Gender Roles and Statuses

Division of Labor by Gender. Although the dominant conception of gender roles gives responsibility for the domestic sphere to women while men dominate in the public sphere, women have long had a central role in providing for their families and are economically active outside the home. They played a critical role as workers in national reconstruction after the War of the Triple Alliance. They have always played an important role in agriculture, both in subsistence production and in the production of cash crops on small peasant farms. However, the economic contributions of women frequently go unrecognized because their agricultural work, and informal sector work performed within the household, are difficult to distinguish from domestic activities. Recent surveys in urban areas indicate that women constitute at least one-third of the economically active population. Women are employed predominantly in domestic service and sales and as office workers, while men are employed across a wider range of activities. Women also are more heavily involved in the informal sector than are men.

Women assumed more active roles in political parties and government after the fall of the Stroessner dictatorship in 1989, and several women now have high-level positions in political parties, the legislature, and government ministries. However, positions of power are still held overwhelmingly by men. Although men dominate the formal bureaucracy of the Catholic Church, women are important in the practice of folk Catholicism.

The Relative Status of Women and Men. Paraguay is a conservative and male dominated society in which formal rights and privileges in many spheres were until recently denied to women. It was the last Latin American nation to grant women the right to vote (1961). Before the constitutional reforms of 1992, married women could not work outside the home, travel, or dispose of their own property without the consent of their spouses. Husbands had the right to dispose of conjugal property, including property the wife brought to the union, as they saw fit. The 1992 reforms modified those provisions, formally granting women equal rights and interests within the marriage. Women are also disadvantaged economically. A 1990 survey in the Asunción metropolitan area found that women earned only 56 percent as much as men. The earnings gap was larger for more highly educated and trained workers. Female-headed households are among the poorest in the society.

Marriage, Family, and Kinship

Marriage. Marriages are formed by the choice of the couple and may be church, civil, or consensual unions. According to the 1992 census, 68 percent of women above age nineteen were in unions, of whom 78 percent were married in a church or civil ceremony. Legal divorce is rare, although unions are often unstable, especially among the poor. Although it is a conservative Roman Catholic society, Paraguay has long been characterized by unstable consensual unions and a high illegitimacy rate. Men's extramarital behavior draws little criticism as long as it does not impinge on the family's security, but women's behavior reflects on the family, and women are expected to be faithful if they are in a stable union.

Domestic Unit. Most people live in a nuclear family that consists of a married couple and their unmarried children or a single woman and her children. In 1992, 20 percent of households were headed by women. Extended households are rare, although relatively well-off urban families may take in the children of poorer rural relatives or those of an unwed female relative. The man holds formal authority within the family and is treated with respect by the children. The woman is responsible for managing the household, caring for the children, maintaining ties with extended kin, and often earning an income outside the home.

Inheritance. Land and other property pass by inheritance to a surviving spouse and then to biological or adopted children. The right to specify an alternative disposition of property is granted to the husband, but his wife may legally contest his decision.

Kin Groups. Family and extended kin are the most important center of loyalty and identity for individuals, and the ideal is an extensive and strong extended kin network. Kin may be called on to provide essential support and assistance in times of need, and the wealthy may mobilize extended kin to support their political ambitions. In addition to kinship ties by marriage and birth, great importance is placed on fictive kin ties established through god-parenthood. Parents select godparents for their children's baptism, confirmation, and marriage. Those godparents have special rights and responsibilities toward their godchildren and are expected to assist in meeting a child's needs if necessary. Children are expected to show their godparents special deference and respect, but ties to the godchild's parents (coparents) may be even more important and extend beyond the death of the godchild. Social equals and extended kin are preferred as godparents, although poorer parents may seek more influential benefactors as godparents for their children.

Socialization

Infant Care. Infants are showered with affection and attention by both women and men of all ages. A crying infant will be comforted instantly by the nearest adult or older child. Infants typically are carried in the arms rather than in a sling or stroller. They usually are left to play on the ground or floor or are placed on a bed to sleep, although the use of playpens and cribs is common among the urban middle and upper classes. Parents expect infants to be active and responsive.

Child Rearing and Education. While middle-class and upper-class children are indulged and expected to devote themselves to studying and playing, the children of poorer urban and rural families are expected to assume productive work roles at a very young age. These children assist in agricultural work, household chores, and the care of younger siblings. It is not unusual for very young children to work as street vendors. Physical discipline is common, and children are controlled through the threat of physical punishment.

Formal education consists of six years of primary schooling followed by six years of secondary schooling. Primary education is compulsory from ages six to twelve, but there are not enough schools, especially in rural areas. Although poor families value education, their children often must miss classes or drop out an early age to help the family financially. In 1994, 90 percent of primary age children were enrolled, while only 34 percent of secondary age children were.

Higher Education. Possession of a university degree is an important source of social prestige and access to higher-status jobs but is available to only a small proportion of the population.

Etiquette

Greetings vary by social class, gender, and the level of intimacy of the parties. Except in formal business situations, upper-class and middle-class women who are social equals greet each other with a kiss on each cheek, whether they are acquaintances or are meeting for the first time. Male and female acquaintances in these social classes greet each other the same way. Men in all social classes shake hands in formal situations. Leave-taking follows the same rules.

Religion

Religious Beliefs. Paraguay is overwhelmingly Roman Catholic. There are also several Protestant sects and small groups of the Baha'i, Buddhist, and Jewish faiths.

Rituals and Holy Places. In addition to Roman Catholic holy days and rituals, Paraguay honors the Virgin of the Immaculate Conception on 8 December. This day is celebrated with a pilgrimage led by religious and government officials to the holy shrine in Caacupé.

Death and the Afterlife. Beliefs and practices concerning death follow Roman Catholic tradition. The dead are interred in mausoleums, and the novena is traditionally observed, although this practice is declining in urban areas. Traditionally, All Saints' Day is celebrated on 1 November by decorating deceased family members' tombs and gathering in cemeteries to honor the dead.

Medicine and Health Care

Modern biomedical practices are combined with herbal and folk remedies. Public health clinics and hospitals are inaccessible to many people, especially in rural areas, and the urban and rural working classes and the poor often depend on self-medication or private pharmacies for medical treatments. Herbal remedies are used simultaneously with pharmaceuticals. Some herbal specialists exist, but most people are knowledgeable about the medicinal uses of common plants or resort to relatives or neighbors for advice on their use.

Secular Celebrations

National holidays include 1 January (New Year's Day), 3 February (Ban Blas, patron saint of the nation), 1 March (Heroes' Day), 1 May (Labor Day), 14–15 May (Independence Day), 12 June (Peace of Chaco), 15 August (Foundation of Asunción), 25 August (Constitution Day), 29 September (Battle of Boquerón, the anniversary of a key victory in the Chaco War), 12 October (Day of the Race, the anniversary of the discovery of America), 1 November (All Saints' Day), 8 December (Immaculate Conception), and 25 December (Christmas). Maundy Thursday, Good Friday, Easter, Ascension Day, and Corpus Christi are recognized as national holidays and are observed according to the religious calendar.

The Arts and Humanities

Literature. The internal market for literature was constrained until recently by the poverty and the limited education of the majority of the population and by repression and censorship under Stroessner's dictatorship. Nonetheless, there is an active literary tradition. Most literature is in Spanish, although contemporary authors may include Guarani phrases and dialogue in their works. The most renowned contemporary authors are Augusto Roa Bastos and Josefina Plá.

Graphic Arts. Traditional folk arts include ñanduti (a spider web-like lace made in the town of Itaugua), ao poí (embroidered cloth), several kinds of ceramic and clay work (especially in the towns of Aregua and Tobatí), and silver filigree jewelry (centered in the town of Luque). Paintings by contemporary artists are displayed in a number of galleries in Asunción.

Performance Arts. The country is known for slow and often melancholy harp and guitar music. Although European in origin, that music usually is performed in Guarani and reflects national themes. Music is performed by ordinary people for entertainment at social gatherings and celebrations as well as by professional musicians. Performances of traditional dance, including the bottle dance (so called because the performers balance bottles on their heads) and polkas are popular. Theater was introduced by Francisco Solano López, and in 1863 the first Italian opera by a touring company was performed in Asunción's National Theater. Theater today is centered in Asunción, and works occasionally are performed in Guarani as well as Spanish.

The State of the Physical and Social Sciences

The physical and social sciences as well as the humanities are taught at the two major universities (National University and Catholic University), as are applied sciences (agriculture and engineering) and the professions. Funding for basic research and teaching is limited, and the faculties were under close surveillance during the Stroessner years. The independent Paraguayan Center for Sociological Studies was established in 1963, and has been the most important center for social science research. In the last years of Stroessner's dictatorship, other private social science institutes were established, and the number of private research organizations grew rapidly after Stroessner's fall. These institutes obtain most of their funding from international sources.

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—Beverly Nagel