A fragile democracy
The Republic of Paraguay is governed by the 1992 Constitution. General elections are held every five years to elect the President and Vice-President of the Republic, the members of Congress (80 deputies, 45 senators) and the governors of the country's 17 departments. Both the President and the Vice-President may not stand for re-election at the end of their terms of office, in order to avoid the authoritarian excesses of the past. At the local level, each of the departments is divided into municipios and districts, subdivided into urban(barrios) and rural(compañias) areas. Asunción has a separate status as a capital district and does not belong to any department.
Since the end of the 19th century, Paraguayan political life has been dominated by two very conservative formations: the Colorado Party and the Liberal Party. These two big parties have gone through civil wars, dictatorships and more democratic periods, without leaving much room for other formations. To recognize them: the Colorado Party is red, the Liberal Party is blue.
The National Republican Association (ANR), or Colorado Party, has been in power since 1947, except for a short period between 2008 and 2012. The once rather progressive Liberal Radical Authentic Party (PLRA) is considered as right-wing as the ANR. Although it has not been in power recently, it has been able to strengthen its presence in Congress and in local bodies. The year 2008 marked a turning point in Paraguayan political life, with the victory of Fernando Lugo's Patriotic Alliance for Change (APC), ending more than 60 years of uninterrupted rule by the Colorado Party. A victory for democracy, which did not withstand political manoeuvring for long. President Lugo was in fact deposed by Congress in June 2012, without even being able to present his defence. Frente Guasú (FG) is now the third largest political force in the country. It brings together various left-wing groups, including the former APC of Lugo. It promotes, among other things, agrarian reform, the redistribution of wealth and the universalization of social protection.
An agri-exporting economy
Paraguay has posted average growth of 4.5% since 2003, which has been sustained despite the economic difficulties of its neighbours, Argentina and Brazil, its main partners. This growth is boosted by exports of agricultural products, livestock farming and the sale of hydroelectric power. Agriculture accounts for 90% of exports and one third of GDP. Exports include maté, corn, cotton, wheat, sugar cane, sunflower, rice, tobacco, stevia, chia and sesame, but mainly soybeans. Paraguay is the world'sfourth largest exporter of soybeans (thefirst if the country's surface area is taken into account). The area of soybean fields has tripled in 20 years. It represented 3.55 million hectares in 2019, for a production of 9.5 million tons. 95% of soybeans are of transgenic origin. Paraguay, which has long banned GMOs on its territory, was faced with a fait accompli with Monsanto products when the authorities "discovered" that the soybean companies were all using transgenic seeds. Given the weight of soya in the economy, there was no turning back (see the documentary Le monde selon Monsanto by Marie-Monique Robin). Without going back over the ecological impact of "all soya", its consequences on the peasant world are not negligible. It is estimated that 1.6% of landowners share 80% of the land, and that 94% of arable land is exploited in an agro-industrial way. With mechanization, a single farm worker can cultivate 500 ha of soybeans, whereas it takes 4 to cultivate 10 ha in traditional agriculture! Beef production is the other economic engine of Paraguay. Officially, there are 15 million head of cattle in Paraguay, or more than two cows per inhabitant! Unofficially, there are many more, the ganaderos sometimes make mistakes when they count their cattle, for tax reasons... Paraguay is in the top ten beef exporting countries and the activity employs 260 000 people, between breeding, transport, slaughterhouses, fodder production, etc... But the export boom is not all good news. Prices are rising in supermarkets, due to the drop in supply for the local market. It is estimated that out of every 100 kg of meat produced in the estancias, 97 kg are exported (Russia and Chile especially), and only 3 kg end up on the Paraguayan parrillas! The industrial sector is closely linked to agriculture and relies mainly on food processing (canned meat, oils, dairy products, beer, etc.). As far as agrofuels are concerned, the production of ethanol (from sugar cane and sorghum) and biodiesel (from vegetable and animal oils) is booming, thanks to favourable climatic conditions and low-cost electricity. Mining activity is poorly developed. Only limestone is extracted in large quantities in the Vallemí region. In the Guairá, in Paso Yobái, a gold mine is exploited. A few deposits of oil, iron and manganese have been discovered in the Chaco, but their exploitation is not profitable enough for investors at present. Finally, Paraguay shares with its neighbours huge hydroelectric dams, such as Yacyretá and especially Itaipú, the second most powerful power plant in the world after the Three Gorges in China. Hydropower is a very sensitive area of Paraguayan diplomacy, subject to bi-national treaties on energy management and pricing. As for the tertiary sector, cross-border trade provides a livelihood for thousands of people. Ciudad del Este is one of the largest commercial centres in the region. Salto de Guairá, Pedro Juan Caballero and Encarnación also benefit from cross-border trade. Many of the products sold are counterfeit. Smuggling and trafficking are so important in Paraguay that some people think that a second GDP should be created to measure this informal economy! The remesas, the money transfers of Paraguayan immigrants from Spain or Argentina, represented 569 million dollars in 2018. According to some experts, remesas have helped reduce poverty in Paraguay much more than the measures taken by successive governments... And what about tourism in all this? Paraguay is still a confidential destination. The main visitors are Argentinians and Brazilians, coming to attend congresses or to do some shopping. We meet very few foreign tourists, most of them are German, because of the historical links with the important Germanic community that arrived at the end of the 19th century. More and more Paraguayans are visiting their country. TheSenatur (National Tourism Secretariat) has boosted the sector a little in recent years with the implementation of thematic tours, such as the Ruta Jesuitica, or the Ruta de la Caña. A network of guest houses, or posadas turisticas, has also been developed recently, covering a good part of the territory, especially where it was not profitable to build a hotel. Even if the development of tourism is slow and lacks human (few trained people) and financial means, it is an interesting alternative for the sustainable exploitation of a natural and cultural heritage to be safeguarded.
The great challenges of Paraguay
Paraguay came out of dictatorship more than 30 years ago, but the clientelism and vote buying institutionalized under the dictatorship are still part of Paraguayan folklore, while corruption has long been rife at the highest political, administrative and judicial levels. According to Transparency International, Paraguay is the most corrupt country in South America after Venezuela. This scourge slows down any possibility of economic and social progress. Another major problem in Paraguay is the hyper-concentration of land, a phenomenon that has driven more than 1.5 million peasants to the cities over the past 20 years and has led to growing inequality. In 2019, a quarter of Paraguayans were living on less than $1.90 a day, and the Human Development Index (HDI), which takes into account health, education and living standards, placed Paraguay 110th out of 189 countries. In a country with a very low tax burden, the massive export of soya benefits only a small part of the population, not to mention the environmental impact. The aggressive takeover of indigenous and peasant land by intimidation and threats from the henchmen of the large soybean companies remains a topical issue. The authorities do little to prevent it, and it regularly leads to serious conflicts. Guerrilla warfare even broke out in the north of the country in 2008. The EPP(Ejército del Pueblo Paraguayo) carries out targeted kidnappings and assassinations from time to time, but is said to have only about 20 men. Many believe that the State uses the pretext of this tiny terrorist group to criminalize the legitimate demands of peasant organizations. As for the students, they are also on the front line of the demonstrations, which are increasing in number in a country that has long been deprived of them. The fight against corruption, the improvement of the health and pension system, the defence of democracy and the environment are among the recurring themes of social movements in recent years.
