Nation at a Glance - Paraguay

History

Paraguay achieved its independence from Spain in 1811. In the disastrous War of the Triple Alliance (1865-70) - between Paraguay and Argentina, Brazil, and Uruguay - Paraguay lost two-thirds of its adult males and much of its territory. The country stagnated economically for the next half century. Following the Chaco War of 1932-35 with Bolivia, Paraguay gained a large part of the Chaco lowland region. The 35-year military dictatorship of Alfredo STROESSNER ended in 1989, and, despite a marked increase in political infighting in recent years, Paraguay has held relatively free and regular presidential elections since the country's return to democracy.

Location: Central South America, northeast of Argentina, southwest of Brazil

Border Countries: Argentina 2,531 km, Bolivia 753 km, Brazil 1,371 km

Total Area: 406,752 sq km Land: 397,302 sq km Water: 9,450 sq km

Climate: Subtropical to temperate; substantial rainfall in the eastern portions, becoming semiarid in the far west

Terrain: Grassy plains and wooded hills east of Rio Paraguay; Gran Chaco region west of Rio Paraguay mostly low, marshy plain near the river, and dry forest and thorny scrub elsewhere

Natural resources: Hydropower, timber, iron ore, manganese, limestone

Land use: Agricultural land: 53.8% arable land 10.8%; permanent crops 0.2%; permanent pasture 42.8% Forest: 43.8% Other: 2.4% (2011 est.)

Ethnic groups: Mestizo (mixed Spanish and Amerindian) 95%, Other 5%

Languages: Spanish (official), Guarani (official)

Religions: Roman Catholic 89.6%, Protestant 6.2%, other Christian 1.1%, Other or unspecified 1.9%, None 1.1% (2002 census)

Population: 6,862,812 (July 2016 est.)

Literacy: 93.9%; Male: 94.8%; Female: 92.9% (2010 est.)

Administrative divisions: 17 departments (departamentos, singular - departamento) and 1 capital city*; Alto Paraguay, Alto Parana, Amambay, Asuncion*, Boqueron, Caaguazu, Caazapa, Canindeyu, Central, Concepcion, Cordillera, Guaira, Itapua, Misiones, Neembucu, Paraguari, Presidente Hayes, San Pedro

Economy: Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. On a per capita basis, real income has grown steadily over the past five years as strong world demand for commodities, combined with high prices and favorable weather, supported Paraguay's commodity-based export expansion. Paraguay is the fifth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. Severe drought and outbreaks of hoof-and-mouth disease in 2012 led to a brief drop in beef and other agricultural exports. Since 2014, however, Paraguay’s economy has grown at a 4% average annual rate due to strong production and high global prices, at a time when other countries in the region have contracted. The Paraguayan Government recognizes the need to diversify its economy and has taken steps in recent years to do so. In addition to looking for new commodity markets in the Middle East and Europe, Paraguayan officials have promoted the country’s low labor costs, cheap energy from its massive Itaipu Hydroelectric Dam, and single-digit tax rate on foreign firms. As a result, the number of factories operating in the country – mostly transplants from Brazil - has tripled since 2014. Corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth. Judicial corruption is endemic and is seen as the greatest barrier to attracting more foreign investment. Paraguay has been adverse to public debt throughout its history, but has recently sought to finance infrastructure improvements to attract foreign investment.

Agriculture - products: Cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (manioc, tapioca), fruits, vegetables; beef, pork, eggs, milk; timber

Industries: Sugar, cement, textiles, beverages, wood products, steel, base metals, electric power