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USAID Information:
External Links:
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Paraguay
The Development Challenge: Since the fall of Paraguay's dictatorship 14 years ago, the country has
adopted a new constitution, established freedom of expression, developed a transparent and free
electoral process, made improvements in the judicial system, and defended democratic institutions in the
face of severe challenges. These challenges include several coup attempts, the assassination of a vice
president, and the resignation of a president. Consolidating democracy and promoting a fair and licit
market economy are the primary U.S. national interests in Paraguay. During the past two years Paraguay
has been a valuable U.S. ally in the war on terrorism.
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During 2003, the country continued its eighth consecutive year in which per capita income was stagnant
or declined. Poverty rates increased at an alarming rate, especially in rural areas, and the value of the
Paraguayan currency depreciated significantly against the dollar. Perceptions of government corruption
are among the highest in Latin America. With the newly-elected President having taken power in August
2003, there is renewed optimism that serious problems such as poverty, corruption, environmental
degradation, and lack of effective basic services to Paraguay's citizens will be addressed. In 2002, the
Office of the President was perceived to be the second most corrupt institution in Paraguay; whereas, it is
now perceived to be the least corrupt institution. This dramatic change in perception from a year ago is
directly attributable to strong anti-corruption measures taken by President Duarte's administration. During
his first months in office, President Duarte has demonstrated a serious commitment to fighting corruption,
reactivating the economy and providing hope to the growing ranks of the poor. Enormous challenges lie
ahead.
Paraguay's external debt is approximately $2.2 billion, over 40% of its gross domestic product. While
Paraguay has historically pursued a conservative macroeconomic policy, the economic tribulations of
Brazil and Argentina (Paraguay’s two most important trading partners) and weak political will have
combined to produce worsening budget deficits and expedient short-term borrowing. A very positive
indicator of how multilateral banks now view Paraguay is the December 2003 International Monetary
Fund approval of a stand-by agreement, the first one in 50 years.
Sustainable development in Paraguay is threatened by the indiscriminate exploitation of land, water, and
wildlife resources. Economic growth is severely threatened by the depletion of Paraguay’s rich
endowment of natural resources. The once rich topsoil of the eastern border region (largely uncultivated
until the 1970s) is now severely eroded. The eastern border region sits on the largest underground water
aquifer on the continent which is being threatened by unchecked use of land.
There is limited access to quality reproductive health services in Paraguay. Approximately 35% of
pregnant women do not receive adequate pre-natal care. Citizens also lack access to other basic
services, such as education, potable water, sewerage systems, solid waste collection, and basic
infrastructure. The national government is increasingly hard pressed to provide these services, and some
local governments are struggling to compensate for these deficiencies.
At a minimum, Paraguay must be able to demonstrate an ability to improve economic conditions, ensure
the provision of basic services to its citizens, and reduce crime and corruption. If democracy does not
provide hope for the future, there is a real possibility that people will lose faith in it and select another form
of government. This is reflected in recent survey findings of the Latinobarometro poll indicating that
Paraguayans were the least satisfied in all of Latin America with democracy and the second least
satisfied with a market economy.
The USAID Program: USAID’s program focuses on four strategic objectives for which funds are
requested: economic growth, reproductive health, environmental initiatives, and democracy. Two themes
that link these objectives are: (1) a pluralistic civil society is the basis for democratic governance,
improved trade capacity (poverty alleviation), improved health and provision of services, and care of
natural resources; and (2) government responsiveness, accountability, and accessibility are strengthened
through the decentralization of power and authority to local levels and measures which promote honesty
and transparency throughout all levels of government. These activities are further described in the
following data sheets.
Other Program Elements: USAID's Democracy, Conflict, and Humanitarian Assistance Bureau, Office of
U.S. Foreign Disaster Assistance, assists Paraguayans to coordinate efforts in disaster preparedness,
emergency training activities, and disaster relief activities. The Global Development Alliance Office
awarded a grant that includes Paraguay as one of the countries to receive information technology training
and assistance to graduates looking for jobs. The Latin America and Caribbean Bureau's Office of
Regional Sustainable Development has programs to increase citizen participation, strengthen civil society
organizations, and promote human rights in Paraguay. Finally, USAID monitors a USAID centrally funded
grant to the Integrated Water Resource Management Incentive Fund.
Other Donors:
USAID has been very active in organizing a previously disjointed donor community and
continues to be successful in having other donors build upon its pioneering activities. USAID has
organized donor coordination activities in areas of decentralization, judicial reform, environment, and
health and is participating in donor programs related to competitiveness and adolescents.
In the health sector, the World Bank, the United Nations Population Fund, and USAID are collaborating
with the Ministry of Health to implement a demographic and health survey and to provide technical
assistance to develop the National Reproductive Health Plan. These are major achievements in terms of
donor coordination.
The major bilateral donors and their interests are: Japan (agriculture and health), Germany (state reform
and natural resources), and Spain (education and cultural support). The Inter-American Development
Bank, the World Bank, the European Union, various United Nations agencies, and the Global
Environmental Facility play a major role in the international development community.
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