PARAGUAY

1.1 Country Overview

Occupying a total area of 406,752 sq km, and with a population of 6,995,655, Paraguay borders
Argentina, Brazil and Bolivia, in South America. It is divided by the Paraguay river into the eastern region
or Paraguay Oriental and the western region or Chaco. The southeast border is formed by the Paraná
river, containing the Itaipú dam which is shared with Brazil. Paraguay has the largest hydroelectric power
plant in the world, generating nearly all of Paraguay's demand for electricity. The actual name "Paraguay"
comes from the word pararaguay meaning "from a great river". The "great river" is the Paraná River,
which is responsible for the hydroelectric power generation. Spanish and Guaraní are both official
languages in the country and most of the population speaks them. Paraguay has a subtropical to
temperate climate, with substantial rainfall in the eastern portions, becoming semi-arid in the far west.
Its primary natural resources are hydropower, timber, iron ore, manganese and limestone. Main
indurtries include sugar, cement, textiles, beverages, wood products, steel, metallurgic, electric power.
Agricultural production is based on cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (tapioca),
beef, pork, eggs, milk, timber. Paraguay is the sixth largest soy producer in the world

2.2 Forestry overview

Although Paraguay’s forest resources are immense, exploitation is limited by lack of roads and
mechanized transport facilities. About 59% of Paraguay's total land area consists of forest (23.4 million
hectares/57.7 million acres in 2000). However, much of that lies in the western Chaco, the forest
resources of which have never been exploited. Paraguay’s forests meet it’s own domestic needs for
lumber and fuelwood. However, logging for export, both legally and illegally, has reduced Paraguay’s once
abundant forests, resulting in a ban on the export of logs since the 1970s. The World Bank had
historically predicted that much of Paraguay’s primary forest cover would ultimately be exhausted.
Deforestation has occurred most rapidly in the east, because transportation costs in the remote Chaco
region have deterred loggers from using forests in that region.

Roundwood cuttings totaled 9.59 million cu m (338.5 million cu ft) in 2000, with 58% used for fuel wood.
Between 2000 and 2005, the rate of forest change increased by 9.1% to 0.92% per annum. In total,
between 1990 and 2005, Paraguay lost 12.7% of its forest cover, or around 2,682,000 hectares.
Exportation of logs was banned in 1973 in order to encourage the domestic lumber industry. The chief
forest products are quebracho, various cabinet and other tropical hardwoods, and oil of petitgrain.
Quebracho, the source of the tannin used by the leather-tanning industry, is the wood of the greatest
commercial importance. Paraguay is the world's largest producer of petitgrain oil, a perfume base distilled
from the leaves and shoots of the bitter orange tree. Since wood and charcoal are the only fuels produced
in Paraguay, about two-thirds of all wood cut is used for burning.
 PARAGUAY ECONOMIC DATA
LOCATION GEOGRAPHIC LOCATION
Central South America, northeast of Argentina 23 00 S, 58 00 W
Neighboured With Total Area
Argentina,Bolivia, Brazil 406,752 sq k
Total Land Total Water
397,302 sq km 9,450 sq km

LAND BOUNDARIES MARITIME CLAIMS

Total Area Territorial Sea
3,995 km None (landlocked)
Argentina Boundary Exclusive economic zone
1,880 km N/A
Bolivia Boundary Contiguous Zone
750 km N/A
Brazil Boundary Continental Shelf
1,365 km N/A

CLIMATE AND TERRAIN RENEWABLE WATER AND WITHDRAWAL

Climate Total renewable water resource
Subtropical to temperate 336 cu km
Elevation Points Withdrawal (Domestic / Industrial / Agriculture)
Low 46 m / High 842 m 0.49 cu km/yr
Terrain Withdrawal per capita
Grass plains some wooded hills east of Rio Paraguay; 80 cu m/yr
Gran Chaco region west of Rio Paraguay mostly low, NATURAL RESOURCES
marshy plain near the river / dry forest /thorny scrub Hydropower, timber, iron ore, manganese, limestone
Arable land perectage (2005)
7.47% ENVIRONMENT ISSUES
Permanent crop percentage (2005) Deforestation; water pollution; inadequate means for
0.24% waste disposal pose health risks for many
Other land use percentage (2005) urban residents; loss of wetlands
92.29%
Irrigated land
670 sq km (2003) NATURAL HAZARDS
Local flooding in southeast,
poorly drained plains may become boggy
 Economic Data

2.0 Economic overview

Following 61 years of Colorado Party Government, the Patriotic Alliance for Change led by Fernando Lugo
took control in August 2008. Paraguay’s’ economic situation is considered to be highly favourable. In the
last five years economic growth has been the highest since the 1970s, and prospects for the future are
relatively promising. Inflation has remained at modest levels, the fiscal position is in order, and the
country’s present external situation is also highly favourable with increases in recorded exports totaling
almost US$4.4 billion in 2008.
With more than 40% of the population living in rural areas, agriculture and agribusinesses represent
about 25% of the GDP, 30% of employment and account for almost all Paraguay’s exports.
In the period between 2004-2007, Paraguay’s Gross Domestic Product increased by an average of 4.5%
and now stands at USD €16 billion. This has been largely due to the prudent economic management
employed since 2004, which extracted Paraguay out of a severe debt and banking crisis by maintaining an
overall fiscal surplus of about 1% of GDP. The fiscal adjustment has been underpinned by a
comprehensive fiscal reform that helped to formalize key industries, such as the re-exportation of
computing products.

Paraguay still has the enormous challenge of expanding its capital base. Net Direct Foreign Investment
remains low. However, the past few years of stability have encouraged a number of noticeable
developments in it’s industries. Private investment in mobile telephony has been strong even if small in
the overall context of Paraguay’s economy.The poverty rate in Paraguay has fallen to about 35.6% in 2007
in part due to the economic recovery and also due to the social spending policies. However, absolute
poverty increased from 15.5% to 19.4% in the same period due to the rise in food prices.. With a labour
force of approximately 2.8 million, unemployment is currently estimated at 5.4% . In terms of population
literacy, 94% of its total population aged 15 and over can read and write.
 PARAGUAY POPULATION DATA

POPULATION (2009 est) MEDIAN AGE

21.9 years

Total population Male

6,995,655 21.6 years
Female
0-14 years 22.2 years
36.70%
LIFE EXPECTANCY AT BIRTH
15-64 years 75.77 years
58.10%
BIRTH RATE
65 years + 28.17 births/1,000 population
5.20%
DEATH RATE
4.46 deaths/1,000 population
POPULATION GROWTH RATES (2009 est)
MIGRATION (Net)
Growth rate (Percentage) -0.07 migrant(s)/1,000 population
2.36%
SEX RATIO (2009 est)
INFANT MORTALITY (2009 est)
Under 15 Years (2009 est)
Male (2009 est) 1.03 male(s)/female
28.77 deaths/1,000 live births 15-64 Years (2009 est)
Female (2009 est) 1.01 male(s)/female
20.38 deaths/1,000 live births 65 years + (2009 est)
Total (2009 est) 0.86 male(s)/female
24.68 deaths/1,000 live births Total Population (2009 est)
.01 male(s)/female (2009 est.)
LITERACY (2003 est) ETHNIC GROUPS

Male (2003 est) White

94.90% N/A
Female (2003 est) Mestizo
93% Mestizo (mixed Spanish and Amerindian) 95%
Total population (2003 est) Other
94% 5%
Education expenditure (2006) Amerindian
4% of GDP
 LANGUAGES RELIGIONS (2006)
Spanish (official), Guarani (official)
Roman Catholic (2006)
89.60%
Non-Catholic Christian (2006)
7.30%
Non-denominational (2006)
3.10%
Athiest / Agnostic (2006)

GOVERNMENT AND COUNTRY DATA

CONVENTIONAL LONG FORM NAME GOVERNMENTAL ADMINISTRATION DIVISIONS

Republic of Paraguay Alto Paraguay, Alto Parana, Amambay, Asuncion*,
Boqueron, Caaguazu, Caazapa, Canindeyu, Central,
LOCAL LONG FORM Concepcion, Cordillera, Guaira, Itapua, Misiones, Neembucu
Republica del Paraguay Paraguari, Presidente Hayes, San Pedro

CONVENTIONAL SHORT FORM LEGISLATIVE BRANCH

Paraguay Bicameral National Congress or Congreso Nacional
consists of the Chamber of Senators
LOCAL SHORT NAME and the Chamber of Deputies
Paraguay

FORMER NAME 2 JUDICIAL BRANCH

Supreme Court of Justice
(Nine judges appointed on the proposal of the Council of
Magistrate)
GOVERNMENT TYPE
Constitutional republic

CAPITAL POLITICAL PARTIES

Asuncion Patriotic Alliance for Change
CAPITAL CO-ORIDINATES Beloved Fatherland Party
25 16 S, 57 40 W Movimiento Union Nacional de Ciudadanos Eticos
Partido del Movimiento al Socialismo
LEGAL SYSTEM Partido Encuentro Nacional
Based on Argentine codes, Roman law, and French
codes: Partido Pais Solidario
accepts compulsory ICJ jurisdiction
VOTING
18 years of age; universal and compulsory up to age
75
HEAD OF GOVERNMENT
President Fernando Armindo LUGO Mendez
PRESIDENT
President Fernando Armindo LUGO Mendez
VICE PRESIDENT
Vice President Federico FRANCO
POLITICAL PRESSURE GROUPS
Alianza Patriotica por el Cambio
National Federation of Campesinos
Roman Catholic Church
Unitary Workers Central
Partido Encuentro Naciona
Partido Pais Solidario

ECONOMIC INDICATORS
GDP (purchasing power parity) GDP (real growth rate)

2006 (est) 2006 (est)

$25.56 billion 4.30%
2007 (est) 2007 (est)
$27.3 billion 6.80%
2008 (est) 2008 (est)
$28.89 billion 5.80%

GDP (per capita PPP) GDP (sectoral composition)

2006 (est) AGRICULTURE

$3,900 23.40%
2007 (est) INDUSTRY
$4,100 18.40%
2008 (est) SERVICES
$4,200 58.20%

LABOUR FORCE (sectoral composition) LABOUR FORCE

AGRICULTURE TOTAL (2008 est)

31% 2.839 million
INDUSTRY UNEMPLOYMENT RATE (2007 est)
17% 5.60%
SERVICES UNEMPLOYMENT RATE (2008 est)
52% 5.40%
POPULATION BELOW POVERTY LINE (2006)
FAMILY INCOME DISTRIBUTION (Gini index) 32%
 INFLATION RATE (consumer index)
LOWEST 10% (2006)
56.8 2007 est
HIGHEST 10% (2006) 8.10%
2008 est
10.20%
INVESTMENT (gross fixed)
19.6% of GDP CENTRAL BANK DISCOUNT RATE (31st Dec 2007)
BUDGET REVENUES (2008 est) 20%
$2.856 billion
BUDGET EXPENDITURES (2008 est) COMMERCIAL BANK (prime lending rate)
$2.826 billion
31st Dec 2007

PUBLIC DEBT 25%

Febuary 2008
2004 est (of GDP) 10%
39.20%
2008 est (of GDP) STOCK OF MONEY
23.20%
31st Dec 2007

STOCK OF QUASI MONEY $1.943 billion

31st Dec 2008
31st Dec 2007 $2.062 billion
$1.368 billion
31st Dec 2008 MARKET VALUE OF PUBLICLY TRADED SHARES
$1.599 billion
31st Dec 2006

STOCK OF DOMESTIC CREDIT $409.1 million

31st Dec 2007
31st Dec 2007 $NA
$2.457 billio
31st Dec 2008 ELECTRICITY
$3.098 billion ELECTRICITY (production)
70 billion kWh
PRODUCTS
ELECTRICITY (consumption)
AGRICULTURE 6 billion kWh
Cotton, sugarcane, soybeans, corn, wheat, tobacco,
beef, pork, eggs, milk; timber ELECTRICITY (exports)
INDUSTRY 64 billion kW
Sugar, cement, textiles, beverages, wood products, ELECTRICITY (imports)
steel, metallurgic, electric power 0 kWh
INDUSTRIAL PRODUCTION GROWTH RATE
 4% (2008) OIL
OIL (production)
0 bbl/day
CURRENT ACCOUNT BALANCE
OIL (consumption)
2007 est 27,410 bbl/day
$126.1 million
2008 est OIL (exports)
-$239 million 0 bbl/day

EXPORTS OIL (imports)

2007 est
$5.463 billion
2008 est NATURAL GAS
$8.152 billion NATURAL GAS (production)
EXPORT PARTNERS (2008) 0 cu m
Argentina 23.9%, Brazil 17.7%, Uruguay 13%, Chile
7.1%
Russia 6.3%, Spain 4.4% NATURAL GAS (consumption)
0 cu m

NATURAL GAS (exports)

0 cu m

EXPORT COMMODITIES NATURAL GAS (imports)

Soybeans, feed, cotton, meat, edible oils, 0 cu m
electricity, wood, leather
IMPORTS
RESERVES FX AND GOLD
2007 est
$6.008 billion 31st Dec 2007
2008 est $2.462 billion
$9.172 billion 31st Dec 2008
IMPORT PARTNERS (2008) $2.845 billion
Brazil 28.3%, US 22.9%, Argentina 12.7%, China 11.2%
EXTERNAL DEBT

31st Dec 2007

$3.096 billion
31st Dec 2008
$3.507 billion
IMPORT COMMODITIES

Road vehicles, consumer goods, tobacco, petroleum EXCHANGE RATES

products, electrical machinery, tractors, chemicals, Guarani (PYG) per US dollar
 vehicle parts 2006

STOCK OF FOREIGN INVESTMENT (in house)

2007
31st Dec 2007 5,031
$2.057 million 2008
4,337.70
STOCK OF FOREIGN INVESTMENT (abroad)

31st Dec 2007

$NA
 PARAGUAY Forest Product Industry

Development of forest plantations

In the 1950s, plantations were established by the private sector to produce fuelwood. In the 1960s, the

Centro de Demostración Forestal established some 600 ha of experimental plantations with the assistance
of the World Food Programme. In 1973, the Forestry Law and its regulations were approved. They
introduced fiscal incentives for reforestation. These incentives had a wide brief, including exemption of
land taxes, reduction of income tax for investments made in plantations and exemption of taxes and
duties on materials relating to reforestation. However, from their launch in 1973 until 1984 their use was
impractical. Thus, the incentive scheme did not result in any reforestation and it was suspended around
that time. By 1975, the total area established by the public and private sectors had reached between 1500
and 500 and 2 000 ha. By the end of 1980, it had reached 3 800 ha and by 1989, about 7 000 ha.
The Servicio Forestal Nacional (SFN) made efforts to promote forest plantations. For example, in 1992,
450 ha of fuelwood plantations were established under a reforestation project. It’s purpose was to
establish 6 000 ha of fuelwood plantations within seven years. There were other projects to establish
plantations for several purposes throughout the country.
In 1991 the Plan de Acción Forestal de Paraguay (PAFT-FOR) was created. Under this plan, to fulfill the
requirement for a forest policy, SFN drew up a forestry strategy. It included establishment of plantations
to provide sufficient raw material for the local market and to investigate plantations of new species to
reduce the pressure on natural forests (SRNMA, 1991). In 1995, the Law 536 was enacted to promote
plantation activity. Incentives are given amounting to 75 percent of the cost of establishment and
maintenance of plantations during the first few years. Since its beginning in 1998, about 43 000 ha of
plantations were established by both large-scale holders, who own 20 ha or more, and small-scale holders

The forestry sector contributes approximately three percent to the GDP. It is predicted that consumption

of timber and fuelwood will steadily increase.

Species composition

Eucalyptus have been the predominant species in plantation use. They produce both fuelwood and

timber. From the first and the second thinnings and the final harvest, 20 percent, 10 percent and
5 percent of the wood is used as fuelwood, respectively. The rest of the wood is used for industrial

purposes such as sawtimber or material for pulp and panels. Some indigenous species are planted. Melia

azedarach, Paulownia tomentosa, Toona ciliata and Pinus spp. are also planted.

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