Brief on Paraguay

Updated 20 February 2011

Introduction

Brief History
The region that is today called Paraguay consisted of numerous semi-nomadic tribes, who
were recognized for their fierce warrior traditions. They practiced a mythical polytheistic
religion, which later blended with Christianity. Spanish explorer Juan de Salazar founded
Asuncion on 15 August 1537. Paraguay declared its independence by overthrowing the
local Spanish authorities in May 1811.

The country's formative years saw three strong leaders who established the tradition of
personal rule that lasted until 1989: Jose Gaspar Rodriguez de Francia, Carlos Antonio
Lopez, and his son, Francisco Solano Lopez. The younger Lopez waged a war against
Argentina, Uruguay, and Brazil (War of the Triple Alliance, 1864-70) in which Paraguay
lost half its population. Brazilian troops occupied the country until 1874. A succession of
presidents governed Paraguay under the banner of the Colorado Party from 1880 until
1904, when the Liberal party won controlwhich lasted until 1940.

During 1930s and 1940s, Paraguayan politics were defined by the war against Bolivia, a
civil war, dictatorships and periods of extreme political instability. General Alfredo
Stroessner took power in May 1954. Elected to complete the unexpired term of his
predecessor, he was re-elected president seven times, ruling almost continuously under
the state-of-siege provision of the constitution with support from the military and the
Colorado Party. During Stroessner's 35-year reign, political freedoms were limited, and
opponents of the regime were harassed and persecuted in the name of national security
and anticommunism. Though a 1967 constitution gave legitimacy to Stroessner's control,
Paraguay gradually became isolated from the world community. In 1989, Stroessner was
overthrown in a military coup headed by Gen. Andres Rodriguez. Rodriguez won the
presidency in elections held that year. Rodriguez instituted political, legal, and economic
reforms and initiated a rapprochement with the international community.

The June 1992 constitution established a democratic system of government and

dramatically improved protection of fundamental rights. In May 1993, Colorado Party
candidate Juan Carlos Wasmosy was elected as Paraguay's first civilian president in
almost 40 years. With support from the United States, the Organization of American
States and other countries in the region, the Paraguayan people rejected an April 1996
attempt by then Army Chief General Lino Oviedo to oust President Wasmosy, taking an
important step towards strengthening democracy.

In 1998 elections, General Oviedo became the Colorado party’s candidate for president,
but when the Supreme Court upheld his conviction on charges related to the 1996 coup
attempt, he was not allowed to run and remained in confinement. His running mate, Raul
Cubas Grau, became the Colorado Party's candidate and was elected in May.
In April 2003, Nicanor Duarte Frutos was elected president. Duarte's administration
established a mixed record on attacking corruption. Duarte worked with an opposition-
controlled Congress, removing six Supreme Court justices suspected of corruption from
office and enacting major tax reforms. Macroeconomic performance improved
significantly under the Duarte administration, with inflation falling significantly, and the
government clearing its arrears with international creditors.

On 20 April 2008, former Roman Catholic bishop Fernando Lugo won the elections to
become the President. Lugo identified reduction of corruption and economic inequality as
two of his priorities.

Political System
Paraguay's highly centralized government was fundamentally changed by the 1992
constitution, which provides for a division of powers. The president, popularly elected for
a 5-year term, appoints a cabinet. The bicameral Congress consists of an 80-member
Chamber of Deputies and a 45-member Senate, elected concurrently with the president
through a proportional representation system. Deputies are elected by departments
(administrative regions) and senators are elected nationwide. Paraguay's highest judicial
body is the Supreme Court. A popularly elected governor heads each of Paraguay's 17
departments.

Economy
Paraguay has a predominantly agricultural economy, with a struggling commercial sector.
There is a large subsistence sector, including sizable urban unemployment and
underemployment, and a large underground re-export sector. The country has vast
hydroelectric resources, including the world's second-largest hydroelectric generation
facility built and operated jointly with Brazil (Itaipu Dam), but it lacks significant mineral
or petroleum resources. The government welcomes foreign investment in principle and
accords national treatment to foreign investors, but widespread corruption is a deterrent.
The economy is dependent on exports of soybeans, cotton, grains, cattle, timber, and
sugar; electricity generation, and to a degree on re-exporting to Brazil and Argentina
products made elsewhere. It is, therefore, vulnerable to the fortunes of the Argentine and
Brazilian economies. Paraguay’s GDP is around US$ 28 billion with growth rate at 3.5%
and GDP per capita at US$9,900. In 2010 Exports were around US$3.39 billion and
imports US$2.29 billion.

External Relations
Economically and geographically, Paraguay is a small Latin American Country whose
foreign policy is largely determined by the regional dynamics and the two neighboring
giants: Argentina and Brazil. It is a buffer between Brazil and Argentina and is
landlocked. Theoretically, its foreign policy aims at striking balance between the
influences of its two larger neighbors.
Paraguay is a member of the UN and some of its specialized agencies. It belongs to the
Organization of American States, the Latin American Integration Association (ALADI),
the Rio Group, MERCOSUR and UNASUR. It is closely aligned with its MERCOSUR
partners on many political, economic, and social issues. Paraguay is the only country in
South America that recognizes Taiwan and not the People's Republic of China.

Relations with the Region

Generally, Paraguay maintains friendly relations with the other countries of the region.
However, its regional foreign policy is greatly determined by its relations with, and
between Argentina and Brazil. Historically, due to economic compulsions, it used to be
aligned with Argentina, as the port of Buenos Aires provided the only access to external
markets. Paraguay depended heavily on Argentina for trade throughout the twentieth
century. During the 35 years of rule of General Alfredo Stroessner, Paraguay drifted
away from Argentina in an effort to explore ways to limit the influence of Buenos Aires
in Paraguayan affairs. Simultaneously, Brazil made moves that further pulled it away
from Argentina.

Over the years, Paraguay-Brazil relations have evolved into Paraguay’s increasing
dependence on Brazil. In the 1950s, Brazil granted Paraguay free-port privileges on the
Brazilian coast at Paranagua, and built the Friendship Bridge over the Río Paraná,
thereby linking Paranagua to Asunción. Military equipment and training in the 1980s also
were provided overwhelmingly by Brazil. In addition, Brazilian banks financed a
growing share of Paraguay's external debt in the 1980s. Because of the tremendous
infusion of money and jobs associated with Itaipu hydropower project, the Paraguayan
economy grew rapidly. The Itaipú became a symbol that Paraguay's relationship with
Brazil had become more important than its ties with Argentina.

The relations between Paraguay and Brazil reached new high after President Lula's
decision in 2009 to triple Brazil’s payments to Paraguay for electricity from Itapúa
hydro-electric plant. With the rise of Brazil as an emerging regional and international
player, and due to its heavy dependence on it, Paraguay is now firmly tilted towards
Brazil.

Paraguay-US
Outside the region, USA is the most important country with which Paraguay has
considerable and multifaceted relations. Paraguay is US’s partner in hemispheric
initiatives on counternarcotics cooperation, money laundering, trafficking in persons, and
other illicit cross-border activities. Paraguay participates in antiterrorism programs and
fora, including the Three Plus One Security Dialogue, with its neighbors and the United
States. The United States played important roles in resolving the April 1996 crisis.

The U.S. Department of State, the Drug Enforcement Administration, the Department of
Justice, and the Department of Treasury provide technical assistance, equipment, and
training for counternarcotics enforcement, combating trafficking in persons, assisting in
the development and implementation of legislations on money laundering and
counterterrorism.

There are more than a dozen U.S. multinational firms having subsidiaries in Paraguay.
These include firms in the computer, agro-industrial, telecom, banking, and other service
industries. Some 75 U.S. businesses have agents or representatives in Paraguay, and more
than 3,000 U.S. citizens reside in the country.

Bilateral Relations
Pakistan’s relations with Paraguay are friendly, but very limited. Other than interactions
at multilateral fora such as UN, the two countries have limited exchanges. With our
ongoing negotiations with MERCOSUR for a trade agreement, Paraguay assumes greater
importance for us. Notwithstanding current state of relations, the two sides can explore
various possibilities, for expanding the existing relations.

Ambassador’s Visit to Paraguay

Ambassador traveled to Paraguay from 14-19 March 2010 to present his credentials. In
addition to the credentials ceremony, Ambassador held meetings with the Chairman of
the Paraguayan Senate, Acting Foreign Minister and other Foreign Office officials and
Minister for Industries and Commerce and senior officials of his Ministry.

In his discussions at the Ministry of Foreign Affairs Ambassador laid emphasis on the
need to commence negotiations on the proposed Mercosur-Pakistan Trade Agreement. In
the meetings at the Foreign Ministry, he also exchanged views on several regional and
international issues. In the bilateral context, Paraguayan officials proposed that the two
countries sign a ‘Visa Abolition Agreement’ to which Ambassador agreed in principle.
They Paraguayan side is to present a draft text to us.

On bilateral trade, both the Industries and Commerce Minister and representatives of
Commerce and Trade Chambers and Importers Association agreed on the need to boost
bilateral trade. The Minister specifically suggested the possibility of Pakistan importing
soybean and sesame seed from Paraguay of which they are major growers. An importer
of Pakistani fabrics expressed interest in visiting Pakistan to explore possibilities of
importing some of our other textile products. It was also suggested that our businessmen
mat establish joint ventures in Paraguay, particularly in the textile sector. Labour is
relatively cheaper as compared to other Latin American countries and Paraguay could
provide a base for export of finished textile products to the Mercosur region and also
other neighbouring countries. Other areas identified for joint ventures were soya and
sesame oil production.
 Talking Points
Bilateral

Political

 Express satisfaction that Pakistan and Paraguay enjoy friendly relations.

 Pakistan and Paraguay are located in distant geo-economic and geo-political

locations, but in this age of globalization, distances matter less.

 Our two sides need to make concerted efforts to find ways and means to enhance
our relations and create better understanding and stronger ties.

 As a start, there can be exchanges between our two countries:

 Trade
 Parliamentary
 Cultural

Economic
 Bilateral trade is negligible and much below the actual potential.

 Express desire to expand bilateral trade which will be beneficial for both the
countries.

 Expo-Pakistan—2010 at Karachi – Underscore the success of the event.

 Business delegations from Paraguay should also attend this event.

 Explain Pakistan’s Strategic location: Pakistan is in a unique position to offer itself

as a trade corridor connecting Iran, Central Asia, China and South Asia.

 There is a vast potential for mutual cooperation in:

 Telecommunication
 Agriculture
 IT/Software development

Pakistan-Mercosur Trade Agreement

 Mercosur is an important economic bloc with great potential.

 Pakistan has deep interest in having trade and economic cooperation with the
Mercosur.
 Express desire for an early conclusion of a trade agreement with Mercosur.

 Solicit Paraguay’s support in this regard.

 Country Profile

Official Name: Republic of Paraguay

Capital: Asuncion

Area: 406,752sq km

Population: 6,995,655

Ethnic Groups: Mestizo (mixed Spanish and Amerindian) 95%, other 5%

Religions: Roman Catholic 89.6%, Protestant 6.2%, other Christian 1.1%, other or
unspecified 1.9%, none 1.1%

Languages: Spanish (official), Guarani (official)

Government Type: Constitutional Republic

Executive Branch: Head of State: President Fernando Armindo Lugo Mendez. The
president is both Head of state and Government

Vice President: Federico Franco

Cabinet: Council of Ministers appointed by the President

Legislative Branch: Bicameral National Congress consists of the Chamber of Senators (45
seats-members elected by popular vote to serve five-year terms) and
the Chamber of Deputies (80 seats-members elected by popular vote to
serve five-year terms)

Political Parties: Alianza Patriotica por el Cambio of Fernando Lugo; Colorado Party of
Lilian Samaniego and Movimiento Union Nacional de Ciudadanos
Eticos of Lino Cesar Oviedo Silva.

Economy

GDP (PPP): US$ 28.79 billion

GDP per Capita: US$9,900

Growth Rate: 3.5%

Inflation: 1.9%

Agricultural Cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (tapioca),

Products: fruits, vegetables; beef, pork, eggs, milk; timber

Industrial Products: Sugar, cement, textiles, beverages, wood products, steel, metallurgic,
electric power
Exports: US$3.39 billion

Export Items: Soybeans, feed, cotton, meat, edible oils, electricity, wood, leather

Imports: US$2.29 billion

Import Items: Road vehicles, consumer goods, tobacco, petroleum products,

electrical machinery, tractors, chemicals, vehicle parts

Diplomatic H.E. Mr. Alamgir Bashar Khan Babar is Ambassador of Pakistan to

Representation: Brazil concurrently accredited to Colombia
 Plan of Action
of Honorary Consulate General of Republic of the Paraguay in Islamabad
Pakistan

Paraguay is an important country in Latin America block and world and unexplored in Pakistan.

Pakistan is also important country in south Asia and in the world.

Pakistan is a country of 180 millions people and can be important market for the exports of Paraguay.

Similarly Paraguay can be important for Pakistani products, not only in Paraguay but also for whole
Latin America.

Why would you like to become Honorary Consul of Republic of Paraguay

Answer:-

1. My intention to support the Paraguay interests in Pakistan, help tourists,

businessmen & students from Paraguay to Pakistan.

2. I am a reliable and honest businessman with contacts abroad and I will do my best to
accomplish any task the foreign office of Paraguay can assign me in compliance with the
national laws of Pakistan.

3. I will promote business, commerce, cultural & bilateral relations between

two countries.

a) Economic assistance strategy to promote bilateral trade between two countries.

b) Exchange cultural between two countries.
c) Exchange of experts/skilled manpower and their training.
d) Exchange of educational programmes.
e) Provision of educational scholarship.
f) Exchange of services of charity/welfare organizations between two countries.
g)

KEY ROLE OF THE CONSULATE GENERAL OF PARAGUAY IN

PAKISTAN.

1. To introduce Paraguay country among people of Pakistan.

2. To get appropriate presence in electronic and print media.
3. To promote and maintain the foreign policy in the region.
4. To keep update news and information of Pakistan to Paraguay.
5. To develop the strategy
6.

Bilateral Relation can be further improved by establishing Consulate general In Pakistan.

Sections of the Consulate:

1. Citizen & Tourist Section.

 Emergency Contact.
 Information for Traveling / Tourist Guide Services
Security Measures for Paraguay citizenship Proposed Locations for Consulate General:

1. Sector G-6 near European Union office Islamabad.

2. F-7/1 near Saudi Embassy Islamabad

(Just 10 minutes drive from Diplomatic enclave & Foreign office of Govt. of Pakistan)

3. Embassy road Islamabad

(Just 05 minutes drive to Diplomatic enclave & Foreign office of

Govt. of Pakistan)

OBJECTIVES AND ASSIGNMENTS OF THE CONSULATE GENERAL

OF

PARAGUAY IN PAKISTAN.

h) TO promote political relations between two countries.

i) To promote trade and commerce relations between two countries.
j) To promote cultural relations and exchange of cultural shows between two countries.
k) To Exchange of professional and skilled manpower.
 l) To promote investments in Paraguay.
m) To promote exchange student/professional education between two countries.
n) To exchange of educational scholarship.
o) To exchange of trade delegations.
p) Facilitate to establish industry in Paraguay.
q) To exchange of medical/engineering students/surgeons/financial experts.
r) To share new research for the growth of two countries.
s) To empower the socio economic system of Paraguay.
t) To start the official visits of head of states.
u) Airlines access/ticketing access and opening of Airline offices in both counties.
v) To facilitate Paraguay in engineering, agriculture, education, sports goods, surgical
products, chemical sector etc.

 Medical information.
 Meetings with Business Officials.
 Arrange Briefings for investment in Paraguay & Pakistan.

2. Economic & Trade section.

The Economic Section is responsible for monitoring, promoting and managing the full range of
economic matters between Paraguay and Pakistan. The Section interacts with the Government of
Pakistan on bilateral and international economic policy issues. Consulate will report on key
sectors such as energy, aviation, telecommunications, health & education.

 The Economic Section continually interacts with Paraguay firms doing business in Pakistan and
Pakistani firms will do business in Paraguay.

3. Press & Information Section.

The press section will oversee the Press and Information Office.  We will work closely with
Pakistani print and electronic media to provide authoritative information on Paraguay
government policies and track media opinion on issues of interest to the Paraguay. Press &
Information office will conduct interviews of Paraguay officials & also press briefings of
Paraguay officials when required and prepares disseminate speeches, policy statements, press
releases, and special publications about issues or events of interest to the people of Pakistan.
These materials are generally available in both English and Pakistan's vernacular languages,
especially Urdu.

4. Public affairs.
The Public Affairs Section is comprised of the Press and Information Office and the Cultural
Affairs Office. The Office of Public Affairs explains and advocates Paraguay’s policy, acts as a
focal point for media and cultural relations.