Information about Paraguay
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.
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 stagnated at 1980 levels. The economy grew rapidly between 2003 and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth 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. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed at a 13% level in 2010, the highest in South America, but slowed in 2011-12 as the stimulus subsided and severe drought and outbreaks of foot-and-mouth disease led to a drop in beef and other agricultural exports. The economy took another leap in 2013, largely due to strong export growth. Political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth.
Issues in Paraguay
unruly region at convergence of Argentina-Brazil-Paraguay borders is locus of money laundering, smuggling, arms and illegal narcotics trafficking, and fundraising for extremist organizations
major illicit producer of cannabis, most or all of which is consumed in Brazil, Argentina, and Chile; transshipment country for Andean cocaine headed for Brazil, other Southern Cone markets, and Europe; weak border controls, extensive corruption and money-laundering activity, especially in the Tri-Border Area; weak anti-money-laundering laws and enforcement