Paraguay
- Total external debt:$ 3.1 billion (World Bank 2005)
- Total external debt payments: $489 million (World Bank 2005).
- Population: 5.9 million (World Bank 2005)
- Percentage of adults who can read and write: 93.5% (HDR 2005)
- Average life expectancy: 71.3 years (HDR 2005)
- HIV prevalence: 0.4% (HDR 2005)
- Total health spending: 2.6% of GDP (HDR 2004)
- Total spending on debt service payments: 6.7% of GDP
- Annual GDP: $7.3 billion (HDR 2005)
(All figures from World Bank and UN Human Development Index, latest available (usually 2005))
Background
Paraguay is a landlocked country bordering Argentina, Brazil and Bolivia, in South America. Paraguay is divided by the Paraguay river into the eastern region or Paraguay Oriental and the western region or Chaco. The river currently produces the most hydroelectric power in the world, generating nearly all of Paraguay's demand for electricity. Paraguay’s economy today is fundamentally agrarian, with over 40 percent of the population living in rural areas. Guaraní and Spanish are both official languages in the country and most of the population speaks both of them.
Recent Political History
In 1811 Paraguay revolted against Spanish rule and became a nominal Republic. During its first 60 years of independence, it was ruled by three successive dictators. The third of these dictators waged war against Uruguay, Brazil and Argentina in 1865 to 1870, during which approximately half of the male population were killed. Following World War II, political instability within the country increased. Under the dictatorship of Alfredo Stroessner, between 1954 and 1989, there were atrocious abuses of human rights in the country. Stroessner was overthrown by the general Andres Rodriguez, who then went on to win the first multi-candidate election Paraguay had seen in decades. However, despite the new democratic constitution, corruption still prevailed in Paraguay under the successive Presidents. In 2003, a former journalist, Nicanor Duarte Frutos, became president promising to improve the economy and remove corruption.
Where has the debt come from?
Income per capita has been almost stagnant over the past 20 years although there has been some improvement in recent years, with real growth increasing. The poverty rate increased to 46% of the population in 2002, but this has since fallen to about 38% in 2005.
Debt cancellation status
Paraguay is officially classed as a lower-middle income country by the World Bank. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative. This does not take into account the size of Indonesia’s external debt in comparison to the value of exports, levels of domestic debt or what the country needs to spend on tackling poverty.
The New Economics Foundation calculates that Paraguay requires % debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.
Sources of information
World Bank
Last updated: April 2008
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