Republic of Paraguay
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Contributor: Food and Agriculture Organization of the United Nations
Contact: Jean Bonnal

Republic of Paraguay

The terms and data used in this publication are in no way an indication of the authors' position relating to the legal status of the countries, territories, cities or zone mentioned, or of their authorities or borders.

A. General Country Data

Surface Area406,752 sq. km
Population (millions)5.1
Population Growth2.8%
Urban Population52.7%
Density (1995)12 inh\sq km
GDP (1994) Billions US$ 7.75
GDP per Capita US$ 1.520
Currency Guarani
National Budget11% of GDP
Human Development Indicator0.706
HDI Ranking (out of 174 countries)94

Borders, Topography and Climate

Paraguay is bordered by Bolivia on the north-west and north, Brazil on the east and Argentina on the south and south-west. The River Paraguay divides the country into two distinct regions : Gran Chaco or Western Paraguay on the west, and Paraguay proper or eastern Paraguay. The Gran Chaco region is made up of verdant plains, of swamps and arid forests. The eastern part of Paraguay is a water basin which is the source of many tributaries of the Paraguay and Parana rivers. At the far west the plateau suddenly slides into a region of low, green and fertile hills in the direction of the River Paraguay.

Paraguay has a subtropical climate. At Asuncion, the average temperatures vary from 17 degrees centigrade in July to 27 degrees in January. In the Chaco and other northern regions, temperatures often rise to 38 degrees centigrade. Annual average rainfall is 1,120 mm in the Asuncion region, nearly 815 mm in the Gran Chaco, and about 1.525 mm in the forest regions of the East.

Characteristics, and Recent Developments of the Political System

Paraguay is a republic whose history has been punctuated by many dictatorial régimes. Since 1992 the country is governed by a constitution which gives considerable powers to the president with a single mandate. The president is the head of state and chief executive elected for a five-year term. He/she is assisted by a council of ministers and a council of state. The election for president is held at the same time as that for vice-president. The bicameral legislature is composed of a senate of 45 members, and a House of Deputies of 80 members. A legislative mandate could last up to five years. In 1993, a president was democratically elected for the first time.

Paraguay is divided into 17 administrative departments, and the capital, Asuncion. The departments (or provinces) are divided into districts, which in turn are divided into municipalities and rural districts. The dominant political party in Paraguay is the National Republican Association or the Colorado Party (ANR-PC); then you have the Constitution For All (CPT), the Christian Democratic Party (PDC), the Radical Liberal Party (PLR), the True Radical Liberal Party (PLRA), the Liberal Party (PL), and the Paraguayan Communist Party (PCP).

Agriculture in Paraguay

Agriculture is the principal economic activity of the country and has a huge surplus. It employs 45% of the work force and contributes 2.8% of the GDP. The major agricultural products are : cotton, sugar cane, and oilseeds. Other crops are corn, wheat, tobacco soy and some fruits and vegetables. Livestock rearing, mostly cattle, is also an important agricultural activity. Forestry is also an important resource with 8.5 millions of metric cubes of lumber in 1992. Fishing is negligible; the annual take was not more 16,000 tons in 1993.

Given that Paraguay's principal resources are within its fertile soil and in its forests (mineral resources are few), the country's economy is basically agricultural, There is a great need for arable land whereas nearly 32% (1993) of the territory is covered by forests. The rate of deforestation is such that between now and 2010 there will be few forests left. However, a number of projects aimed at protecting the forests are under study in the Chaco region.

Current Economic Situation

In the 1970s and at the beginning of the 1980s Paraguay had a feeble economy and unemployment went up. The government, which had seized power in a coup in February 1989, supported by the Colorado Party, undertook a number of economic reforms (privatization) and democratized the political system (approval of the new constitution in 1992). The positive aspects of the new constitution are numerous and important. First of all it restructures the state through a balance of powers between the three branches of government. Many clauses of this organic law make it one of the most advanced constitutions in Latin America. The constitution institutes decentralization (regionalization) as a way of making citizens participate fully in the conduct of public affairs, while the country remains a unitary state. In August 1993 a five-year plan was made public : a market economy, including privatization, and mechanisms for social compensation in favor of the most vulnerable sectors would fully come into effect.

B. On-going Decentralization Process

Background, Objectives, and Legal Framework

The on-going decentralization process was introduced within the framework of this economic and political renewal. Since 1992 international organizations had made recommendations to the government to implement decentralization and to carry out substantial privatization in order to solve the problem of diminishing budgetary resources.

Functions, Resources, and Autonomy of Decentralized Entities

The government had new municipal and constitutional laws passed though the scope of these laws were limited. The intermediate and local levels were assigned new consultation functions but no decision-making, implementation, control or financing functions were assigned them. Also, the intermediate level jurisdictions did not receive the extra resources they need to carry out their functions, and neither did the local level jurisdictions. Finally, both levels have only limited autonomy in the use of their resources.

C. Decentralization and Rural Development

Forms of Decentralization, Agricultural and Rural Development Policy Formulation

There is no rural development decentralization policy as such. Political decentralization (regionalization) is an overall process which is delegating powers to civil society organizations. The law which would enable the administrative restructuring of the Ministry of Agriculture to adapt it to this new context, is still being debated in the House of Deputies.

The modalities for rural development planning and the design of strategic programs for the agricultural sector are basically determined at the national level, and authority in this regard flows downward. Agricultural policy is not modified in any way to take into account the characteristics of different regions and beneficiaries do not participate in the determination of its objectives. In contrast, the government fully adapts policy to take into account the type of production even if the determination is made at the national level without any coordination with the regional level. For example, all actions associated with equipment and rural infrastructure are determined, financed and monitored at the national level.

Decentralization and Agricultural Support Services

Financing and the determination of policy relating to the major agricultural support services (training, extension, research, credit, inputs) are the exclusive sphere of the national level. The role of the principal actors in service delivery in the area of rural development is different : The NGOs are the principal actors in training, while the public sector is dominant in extension and research; the private sector plays a decisive role in inputs and credit.

Support Policies, Constraints and Evaluation of the Decentralization Process

It is not surprising that no support policy (information, training or organizational support) has been put into effect to increase the impact of decentralization in the area of rural development. It is not surprising either that the lack of capacity of civil society organizations is the principal constraint on the implementation of the political decentralization process.

According to an evaluation done by FAO as part of the preparation of a classification of decentralization processes, it appears that the case of Paraguay is quite typical of processes implemented unsatisfactorily and whose impact is limited to social infrastructure (health, housing, education).


The lack of information, training and organization policies led to, in most cases, the capture of the process by local political and economic élites. If the government wants to carry out an effective decentralization policy, a policy with a positive and generalized impact, it should build the capacity of civil society organizations, especially that of the poorest citizens, peasants and women, while avoiding the current spreading out of the public sector.