Paraguay

THE REPUBLIC OF PARAGUAY was originally settled by natives but was conquered by Spain during its conquest of South America. Paraguay revolted against Spain in 1811 and established itself as a republic. Between 1865 and 1870, Paraguay was involved in the War of the Triple Alliance, which ultimately cost the nation two-thirds of its male population and a good deal of territory. It took over 60 years before Paraguay's economy began to recover from the period of stagnation created by the war.

The overthrow of Paraguay's military dictator in 1989 signaled a turn toward democracy and free elections. Yet the political environment in Paraguay continues to be characterized by infighting, corruption, an outdated infrastructure, and high internal and external debts. Accusations of smuggling, drug trafficking, and money laundering in conjunction with the unstable political environment have served to keep foreign investment at a minimum.

Paraguay's market economy is largely informal, profiting from the reexport of imported consumer goods to surrounding countries and from thousands of microenterprises and urban street vendors. About 45 percent of the labor force are engaged in agriculture, much of it subsistence-level. The agricultural sector accounts for 25.3 percent of the total Gross Domestic Product (GDP). Services generate half of the GDP, and industries are responsible for the remaining 24.9 percent. Unemployment stands at 15.1 percent.

With a per capita annual income of $4,800, Paraguay is a lower-middle-income nation with a headcount poverty rate of 36 percent. Poverty rates have been increasing at the same time that social spending has decreased. Inequality is prevalent, with the richest 20 percent of the population holding 60.2 percent of resources and the poorest 20 percent sharing only 2.2 percent of resources. Paraguay is ranked 56.8 percent on the Gini Index of Human Inequality. Over 30 percent of Paraguayans live on less than $2 a day, and 14.9 percent subsist on less than $1 a day. Approximately 14 percent of the population are undernourished.

Women head up most poor households in Paraguay, and poverty has become more entrenched among indigenous women and those who live in rural areas. Women who work tend to be employed in low-paying jobs, and most women have no social security coverage. Paraguay worked with international groups to develop the Community Development Project (PRODECO) to [Page 812]provide poverty relief and promote social inclusion, but changes have been only incremental. A large number of Paraguayans have no access to health services. There are only 49 physicians for every 100,000 residents, and up to 49 percent of the people lack access to affordable essential drugs. Improvements have been made in providing access to safe drinking water and improved sanitation. Currently 78 percent of the population have access to safe drinking water, and 94 percent have access to improved sanitation.

In 1980, life expectancy in Paraguay was 65 years for males and 69 years for females. By 2005, life expectancy had increased to 74.89 years overall. With a projected life span of 77.55 years, females tend to outlive males (72.35) by over five years. Among the population of 6,347,884, the median age is 21.2 years. Almost 38 percent of the population are under the age of 14, and 4.8 percent have reached the age of 65.

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