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Paraguay: An Overview

Paraguay is a landlocked country in South America
bordered by Argentina, Bolivia, and Brazil. The United
States has had good relations with Paraguay for decades,
providing assistance to counter corruption and spur trade
and economic  development. The United States and
Paraguay also work together on counterterrorism and
counternarcotics, among other security matters of interest to
some  Members  of Congress. Recently, U.S.-imposed
sanctions against top Paraguayan leaders have caused some
bilateral tensions.

Po  It ca     nvironnent
Paraguay had a turbulent political history in the 19th and
20th centuries. In the War of the Triple Alliance (1864-
1870), Paraguay lost one-quarter of its original territory to
its opponents-Argentina, Brazil, and Uruguay-and  more
than half of its population died. From 1954 to 1989,
General Alfredo Stroessner ruled as a military dictator; he
was overthrown  by a military coup. A constituent assembly
elected in 1991 promulgated a more democratic constitution
in 1992 that divides power among the president; a
bicameral congress comprising a 45-member Senate and
80-member  Chamber   of Deputies; and the judiciary, headed
by the supreme court. Paraguay has held regular elections
since 1993, but its citizens continue to face some challenges
in exercising their civil liberties and political rights.

The conservative Colorado Party (also known as the
Asociaci6n Nacional Republicana   Partido Colorado or
ANR-PC)   has dominated Paraguay's political system. It
held power for much of the 20th century, including under
the Stroessner dictatorship, and has won nearly every
election held since the democratic transition. The only
exception was in 2008, when former Catholic bishop
Fernando Lugo-affiliated  with the main opposition party,
the Partido Liberal Radical Autintico (PLRA)-won  the
presidency. The Colorado-led congress impeached Lugo in
2012, removing him  from office in a rapid process
condemned  by neighboring countries. In 2013 elections,
President Horacio Cartes (2013-2018) regained the
presidency for the ANR-PC, despite allegations of
involvement in money  laundering and narcotics trafficking.
Cartes's unsuccessful attempt in 2017 to amend the
constitution to permit him to run for reelection in 2018
sparked violent protests. The 2018 election of Mario Abdo-
Benftez (2018-2023) continued the ANR-PC's  hold on the
presidency, but intraparty divisions emerged during his
administration, generally splitting the party between
factions that support former president Cartes (known as
Honor  Colorado) and those that oppose him.

Despite the tensions within the ANR-PC, the 2023 general
elections resulted in a victory for the party over multiple
opposition parties. The ANR-PC won  the presidency,
majorities in the Chamber of Deputies and Senate, and 15


Updated October  31, 2024


of 17 state governorships. Paraguay elected Santiago Pefia,
a former finance minister under Cartes and Honor
Colorado's presidential nominee during the ANR-PC
primary, to a five-year presidential term. Pefia obtained
nearly 44% of the vote, defeating Efrafn Alegre, the
candidate representing the PLRA-led opposition alliance,
Concertaci6n Nacional, and Paraguayo Cubas, of the far-
right party Partido Cruzada Nacional. International
observers commended  the election's transparency but noted
some  irregularities.

                Paraguay   at a Glance
  Population: 7.6 million (2023 est., IMF), 95% of whom
  identify as mestizo (mixed Spanish and Indigenous Guarani
  descent)
  Area: 157,047 sq. miles, slightly smaller than California (CIA)
  GDP:  $43.0 billion (2023 est., current prices, IMF)
  Per Capita GDP: $5,686 (2023 est., current prices, IMF)
  Top Imports: electrical machinery, mineral fuels, heavy
  machinery (2023, TDM)
  Top Exports: soy beans, beef, electrical energy, cereals
  (2023, TDM)
  Key Trading Partners: Argentina (25.7%); Brazil (25.1%);
  United States (1 1.3%) (2023, total trade, TDM)
  Sources: International Monetary Fund, World Economic
  Outlook Database (IMF); Central Intelligence Agency, World
  Factbook (CIA); Trade Data Monitor (TDM).

Since Pefia's August 2023 inauguration, the government
has pursued market-oriented economic policies, supported
reforms to increase transparency in the civil service and the
public pension system, and supported measures to improve
tax collection. Pefia also has pledged increased investment
to improve security in the country. Another key priority of
Pefia's government is renegotiating the financial terms of
the binational Itaipd hydroelectric dam with Brazil.

Former president Cartes-sanctioned by the United States
for significant corruption (see below)-may exert
outsized influence on Pefia's political agenda. In October
2024, pro-Cartes members of congress passed a bill to
increase state control over nongovernmental organizations,
prompting concerns from international observers that the
bill, if signed into law, could unduly restrict civic space.
Some  observers suggest Cartes's influence also may stymy
Pefia's efforts to tackle pervasive corruption in Paraguay.

Economic and Social Conditions
Paraguay's economy  is driven largely by agricultural
exports-primarily soybeans  and beef-and  electricity
generated by the Itaipt Dam. Its reliance on climate-
dependent commodities  exports and informal labor, which

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