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| >> Regional Overview >> Paraguay Overview | |||||||||||||||||||||||||||||||||||||||||
THE DEVELOPMENT CHALLENGE: Consolidating democracy is the primary U.S. national interest in Paraguay. The past 12 years since the fall of the dictatorship have seen the adoption of a new constitution, the establishment of freedom of expression, the development of a transparent and free electoral process, a considerably improved judicial system that permits public scrutiny of legal cases, and the defense of democratic institutions in the face of coup attempts and the assassination of the vice president.
Despite efforts to reduce poverty, advance economic and social reforms, improve the economy, eliminate corruption, address environmental degradation, and provide effective basic services to Paraguay's citizens, problems still persist. During 2001, the country continued its fifth consecutive year in which per capita income declined, leaving more than one-third of the population below the poverty line. The value of Paraguayan currency depreciated more than 30% against the dollar in 2001 and perceptions of corruption in the national government have led to considerable social unrest. Paraguay's external debt is about $1.6 billion, or about 27% of GDP. Approximately 30% of the population do not have regular access to health services and those services that are available are often of very low quality. A shortage of reproductive health services has contributed to high maternal mortality and one of the highest fertility levels in Latin America. Many citizens lack access to basic services such as education, potable water, sewer systems, solid waste collection, and basic infrastructure. At a minimum, Paraguayan democracy must be able to demonstrate an ability to improve economic conditions, ensure the provision of basic services to its citizens, and provide jobs for a rapidly expanding population. If democracy does not provide hope for the future, there is a real possibility that the people will lose faith in this fledgling democracy and embrace populist solutions. THE USAID PROGRAM:
USAID/Paraguay began implementing its new Strategic Plan in FY 2001. The new strategy integrates environmental and reproductive health initiatives into the overall democracy program. The two major themes that link these initiatives are: 1) the decentralization of power and authority to local levels strengthens government accountability and accessibility to citizens; and 2) a vibrant, pluralistic civil society is the basis for democratic governance. The Program Data Sheets provided below cover the four development objectives for which USAID/Paraguay is requesting funds. These four objectives concentrate on: strengthening local government and civil society; protecting the environment through better management of globally important ecoregions; decentralizing and expanding access to quality reproductive health services and reducing maternal mortality; and increasing incomes in rural areas. In FY 2002, funding will be used for activities being implemented under three ongoing objectives (democracy, environment and reproductive health). In FY 2003, in addition to the ongoing objectives, USAID will use $1 million to initiate a new economic growth program aimed at increasing the incomes of the poor. The new objective will address poverty, encourage economic reforms to expand trade, assist small landholders to obtain titles for their properties, and generate employment by expanding access by the rural poor to financial services. The specific activities to be funded by FY 2002 and FY 2003 appropriations are described in more detail in the following Program Data Sheets. ONGOING PROGRAMS FOR WHICH NO NEW FY 2002 OR FY 2003 FUNDING IS REQUESTED:The USAID program in Paraguay includes the following objectives for which USAID is not requesting new funds, but is continuing to expend funds already appropriated.
OTHER PROGRAM ELEMENTS: USAID's Democracy, Conflict, and Humanitarian Assistance Pillar, Office of U.S. Foreign Disaster Assistance, assists a network of Paraguayan organizations that coordinate efforts in disaster preparedness and emergency training activities.
OTHER DONORS: Donor coordination in Paraguay is excellent. USAID has organized donor coordination related to decentralization, judicial reform, environment, and health. USAID is the main donor working on the decentralization of power and authority to local governments with a strong civil society focus. USAID has the comparative advantage of developing innovative programs that can be tested through field experience without having to go through a lengthy process of Government of Paraguay approvals. The focus will continue to be on developing pioneer demonstration activities for other donors to replicate. USAID is unique among donors in Paraguay in that it works exclusively through non-governmental organizations. Japan is Paraguay's largest bilateral donor, followed by the United States, the European Union, Spain, and Germany. The major donors and their interests are: Japan (agriculture, health), European Union (rural development, state reform), Spain (infrastructure), and Germany (state reform). The Inter-American Development Bank, the World Bank, various United Nations agencies, the Global Environmental Facility, and the Pan-American Health Organization are major multilateral contributors. Program Data Sheets
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