September 6, 2022
Paraguay: An Overview
Introduction
Current Situation and Upcoming Elections
Paraguay is a landlocked country in South America
President Mario Abdo Benítez of the Colorado Party was
bordered by Argentina, Bolivia, and Brazil. The United
elected in April 2018, defeating an opposition alliance by a
States has had close relations with Paraguay for decades,
margin of less than 4%. He was inaugurated to a five-year
providing assistance to counter corruption and spur trade
term in August 2018. The Colorado Party holds a majority
and economic development. The United States and
of seats in the Chamber of Deputies and a plurality in the
Paraguay also work together closely on counterterrorism
Senate, but the party has two competing factions: Honor
and counternarcotics, among other security issues of
Colorado, led by former President Cartes, and the smaller
interest to some Members of Congress.
Colorado Añetete, led by President Abdo Benítez. Although
former President Cartes helped defeat two opposition
In July 2022, the State Department imposed sanctions (visa
attempts to impeach President Abdo Benítez in 2019 and
restrictions) against former Paraguayan President Horácio
March 2021, intraparty tensions have escalated since. The
Cartes (2013-2018) for alleged involvement in significant
2021 impeachment attempt was spurred by protests over the
corruption. In early August, the U.S. government
government’s alleged mishandling of the Coronavirus
sanctioned Vice President Hugo Velázquez also for alleged
Disease 2019 (COVID-19) pandemic, which overwhelmed
corruption and bribery, prompting him to withdraw his
Paraguay’s public health system.
candidacy ahead of presidential elections scheduled to be
held in April 2023. U.S. sanctions of such high-ranking
Political parties must select their presidential candidates for
officials have fueled speculation that tensions in the U.S.-
the April 2023 contest via party primaries by December
Paraguayan relationship may increase, although neither
2022. For the ANR-PC, with Hugo Velázquez out of the
government has indicated that has occurred.
race, Santiago Peña, the Honor Colorado-backed candidate
and a former finance minister under Cartes, is in the lead to
Political Background
become the party’s presidential nominee. In June 2022,
Paraguay had a turbulent political history in the 19th and
several opposition parties, including the PLRA, formed an
20th centuries. In the War of the Triple Alliance (1864-
alliance, the Concertación Nacional, to select a single
1870), Paraguay lost one-quarter of its original territory to
opposition ticket.
its opponents—Argentina, Brazil, and Uruguay—and more
than half of its population died. Political instability
Paraguay at a Glance
followed for several decades, including three civil wars in
the first half of the 20th century. For 35 years, from 1954
Population: 7.35 mil ion (2021, IMF), 95% of whom identify
until 1989, it was governed by a military dictatorship led by
as mestizo, a mix of Spanish and Indigenous Guarani descent.
General Alfredo Stroessner, which was ultimately
Area: 157,047 sq. miles, slightly smaller than California (CIA)
overthrown by a military coup.
GDP: $38.3 bil ion (2021 est., current prices, IMF)
The newly formed government enacted a more democratic
Per Capita GDP: $5,207 (2021 est., current prices, IMF)
constitution in 1992, and the country has held competitive
Top imports: electrical machinery (17%), mineral fuels
elections since 1993. The conservative Colorado Party
(13%), mechanical appliances (13%), (2021, TDM)
(Partido Colorado, also known as the National Republican
Top exports: soybeans (29%), meat (16%), mineral fuels
Association-Colorado Party or ANR-PC) has dominated
(15%), (2021, TDM)
Paraguay’s political system. It held power for much of the
Key trading partners: Brazil (29.1%); Argentina (22.0%);
20th century, including under the Stroessner dictatorship,
United States (9.1%); China (8.7%) (2021, total trade, TDM)
and won nearly every election held since the democratic
transition. The only exception was in 2008, when former
Legislature: Bicameral Congress, with 45-member Senate
Catholic bishop Fernando Lugo affiliated with the main
and 80-member Chamber of Deputies
opposition party, the Partido Liberal Radical Auténtico
Sources: Economist Intelligence Unit (EIU); International
(PLRA), won the presidency. The Colorado-led congress
Monetary Fund’s World Economic Outlook Database (IMF);
impeached Lugo in 2012, removing him from office in a
Central Intelligence Agency’s World Factbook (CIA); World
rapid process that was condemned by neighboring
Bank (WB); and Trade Data Monitor (TDM).
countries. The 2013 election of Horacio Cartes returned
governmental control to the ANR-PC despite allegations of
Cartes’ involvement in money laundering and narcotics
Economic and Social Conditions
trafficking. His attempt to override the prohibition against
reelection in 2017 failed but sparked protests, including the
Paraguay’s economy is driven largely by agricultural
partial burning of the capitol in Asunción.
exports—primarily soybeans and beef—and electricity
generated by the binational Itaipú dam. Its dependence on
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Paraguay: An Overview
commodities and worker informality (reaching above 60%,
laundering operation. Over $100 million of assets were
per the U.N. Development Programme) have perpetuated
seized and some two dozen suspects arrested. In May 2022,
social and economic inequities, according to some analysts.
Marcelo Pecci, a top Paraguayan prosecutor involved in the
Although Paraguay appeared to be coping well initially
antidrug operation, was assassinated while travelling in
with onset of the COVID-19 pandemic, deaths surged in
Colombia. Colombian authorities suspect the Brazilian
2021. Paraguay’s efforts to procure and deploy vaccines
crime group, First Capital Command, and a Uruguayan
have been slower than neighboring countries, and some
drug cartel of involvement in Pecci’s murder—both
observers have estimated that it could take until 2023 to
syndicates have increased their presence in Paraguay.
vaccinate at least 60%-70% of the population. As of late
August 2022, Paraguay reported more than 19,000 deaths
U.S.-Paraguay Relations
from the pandemic and 49% of its population was fully
The U.S. government has provided assistance to Paraguay
vaccinated, according to Johns Hopkins University.
to bolster democratic governance and combat corruption.
The two governments have collaborated on security,
Although Paraguay’s economy was harmed by the effects
counternarcotics, and counterterrorism. In March 2021,
of the pandemic, its impacts thus far have not been as
Secretary of State Antony Blinken spoke with President
severe as in several other Latin American countries.
Abdo Benítez, reiterating U.S. support for Paraguay as it
According to the International Monetary Fund (IMF),
struggles with the COVID-19 pandemic. In mid-2021,
Paraguay’s economy contracted by less than 1% (-0.8%) in
Under Secretary of State for Political Affairs Victoria Nuland
2020 and grew by an estimated 4.2% in 2021. In 2022,
and other officials traveled to Paraguay for the second U.S.-
drought reduced agricultural production. Observers warn
Paraguay Strategic Partnership Dialogue, which focused on
that prolonged drought, a global fertilizer shortage and
security, governance, trade, investment, and ties with allies,
inflation tied to the war in Ukraine, and supply chain
such as Taiwan. (Paraguay is the only country in South
disruptions may continue to constrain growth. The IMF
America that recognizes Taiwan and not the People’s
estimates Paraguay’s GDP growth will total 0.3% in 2022
Republic of China.)
but could accelerate to 4.5% in 2023.
As of June 2022, the U.S. government has provided more
Before the pandemic, Paraguay had been gradually
than 2 million vaccine doses and nearly $12 million in
reducing poverty. According to the U.N. Economic
COVID-19-related aid to the country. The U.S.
Commission for Latin America and the Caribbean
International Development Finance Corporation is
(ECLAC), poverty decreased from 22.3% of the population
financing $333 million toward various projects to support
in 2014 to 19.4% in 2019. However, because of the
small and medium-sized businesses in Paraguay, with some
pandemic-related downturn, ECLAC estimates that the
funds targeting women’s economic empowerment. In 2017,
poverty rate in Paraguay returned to 22.3% in 2020.
the United States and Paraguay signed a Trade and
Paraguay may again make progress on lowering poverty if
Investment Framework Agreement, which entered into
an economic recovery were to take hold.
force in March 2021, to advance commercial ties and
resolve trade-related disputes.
Security Concerns
Porous borders and ineffective law enforcement have
The United States allocated $9.6 million in bilateral aid to
contributed to rising insecurity, drug trafficking, and money
Paraguay in FY2021, including $4 million in Development
laundering, especially in the country’s northern states and
Assistance (DA) and $5.2 million in supplemental
the tri-border-area (TBA), where Paraguay borders
Economic Support Fund aid appropriated through the
Argentina and Brazil. Paraguay is a transit country for
American Rescue Plan Act of 2021 (ARPA; P.L. 117-2).
illegal drugs, especially Andean cocaine, destined for
The State Department also provided $400,000 in
neighboring countries and Europe. Paraguay also grows and
International Military Education and Training aid to
exports more marijuana than any Latin American country
strengthen the Paraguayan armed forces in FY2021. In
except Mexico.
FY2022, the State Department allocated $3.4 million for
Paraguay, and in its FY2023 congressional budget request,
Paraguay has experienced violence and kidnappings from
the State Department includes $4.4 million for Paraguay, of
the domestic armed group Paraguayan People’s Army
which $4 million is requested for DA. Humanitarian
(EPP) and its offshoot organizations since 2008. A former
organizations operating in Paraguay received an additional
vice president kidnapped in 2020 by the EPP has not been
$605,000 in FY2021 to assist the roughly 6,000 Venezuelan
rescued. U.S. officials have expressed concerns about the
migrants and refugees who have arrived since 2014 and
foreign terrorist organization Hezbollah, which is suspected
their host communities. Congress continues to be interested
of drug trafficking and money laundering activity in the
in U.S.-Paraguayan cooperation on counterterrorism,
TBA to support its operations. The State Department notes
counternarcotics, open markets, and bilateral trade, as well
although Paraguay has made progress implementing anti-
as building governmental accountability and reinforcing
money laundering and terrorism financing laws passed in
common views held on defense.
2019, prosecutions are rare, in part due to public corruption.
Joshua Klein, Presidential Management Fellow, assisted in
In February 2022, the Paraguayan National Anti-Drug
writing this In Focus product.
Secretariat (SENAD), assisted by the U.S. Drug
Enforcement Administration and other international anti-
June S. Beittel, Analyst in Latin American Affairs
crime agencies, conducted its largest antidrug and money
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Paraguay: An Overview


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