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Paraguay - Acknowledgments


The authors wish to acknowledge the contributions of Thomas E. Weil, Jan Knippers Black, Howard I. Blutstein, David S. McMorris, Frederick P. Munson, and Charles Townsend, who wrote the 1972 edition of the Area Handbook for Paraguay. Portions of their work were incorporated into the present volume.

The authors are grateful to individuals in various agencies of the United States government and private institutions who gave their time, research materials, and special knowledge to provide information and perspective. None of these agencies or institutions is in any way responsible for the work of the authors, however.

The authors also wish to thank those who contributed directly to the preparation of the manuscript. These include Richard F. Nyrop, who reviewed all drafts and served as liaison with the sponsoring agency; Barbara Dash, Deanna D'Errico, Vincent Ercolano, Richard Kollodge, and Sharon Shultz, who edited the chapters; Martha E. Hopkins, who managed editing and production; and Barbara Edgerton, Janie L. Gilchrist, and Izella Watson, who did the word processing. Catherine Schwartzstein performed the final prepublication editorial review. The Library of Congress Printing and Processing Section performed phototypesetting, under the supervision of Peggy Pixley.

David P. Cabitto, who was assisted by Sandra K. Cotugno and Kimberly A. Lord, provided invaluable graphics support. Susan M. Lender reviewed the map drafts, which were prepared by Harriett R. Blood, David P. Cabitto, and Sandra K. Cotugno. Sandra K. Cotugno also deserves special thanks for designing the illustrations for the book's cover and the title page of each chapter.

The authors also would like to thank several individuals who provided research support. Arvies J. Staton supplied information on military ranks and insignia, and Karen M. Sturges-Vera wrote the section on geography.

Finally, the authors acknowledge the generosity of the individuals and the public and private agencies who allowed their photographs to be used in this study. We are indebted especially to those who contributed original work not previously published.


Like its predecessor, this study is an attempt to treat in a compact and objective manner the dominant social, political, economic, and military aspects of contemporary Paraguay. Sources of information included scholarly books, journals, and monographs; official reports of governments and international organizations; numerous periodicals; and interviews with individuals having special competence in Paraguayan and Latin American affairs. Measurements are given in the metric system.

Although there are numerous variations, Spanish surnames generally consist of two parts: the patronymic name followed by the matronymic. In the instance of Alfredo Stroessner Mattiauda, for example, Stroessner is his father's name, Mattiauda, his mother's maiden name. In informal use, the matronymic is often dropped. Thus, after the first mention, we have usually referred simply to Stroessner. A minority of individuals use only the patronymic. Special rules govern discussion of Francisco Solano L�pez, who is referred to throughout this book as Solano L�pez to differentiate him from his father, Carlos Antonio L�pez.


Paraguay - History


PARAGUAY WAS ONE of the first countries in South America to achieve independence. Its history since the arrival of the Spaniards in 1537 evokes images of tremendous sacrifice and suffering amid lush surroundings. Because of its small population and poverty, however, its weight among the nations of the modern world is small. At the time of the Spanish conquest in the mid1500s , Paraguay was the second most important of the Spanish dominions in South America after Peru. But its preeminence as a colony did not last because it produced no gold or silver. In the long run, however, the country's lack of precious ores proved to be a blessing because it allowed Paraguay to escape the horrors of slavery that prevailed in the mines of Peru and Mexico. The Spanish conquest and settlement proceeded more humanely in Paraguay than elsewhere in Spanish America.

The country's basic characteristics were determined during the first few decades of European rule and reinforced under the Republic of Paraguay after independence in 1811. The country has a largely egalitarian social structure. Its relatively homogeneous population of mestizos follows Spanish culture and religion but speaks the Indian language, Guaran�, at home. It also has a tradition of authoritarian rule and a concomitant lack of democratic institutions. Finally, Paraguay suffers from a paranoiainducing isolation, originally because of its location in a wilderness populated by hostile Indians, and later because of its location between powerful neighbors--Brazil and Argentina.

Partly because of its remoteness, Paraguay never had a very large European population. The colony's first governor urged Spanish men to take Indian wives to help them take their minds off returning to Spain, solve the problem of the scarcity of European women, and encourage peaceful relations between the tiny, vulnerable, European colony and its numerous Indian neighbors. Neither Spaniard nor Indian needed any prodding, however, as mixed unions predominated from the start. The Paraguayan republic's first dictator, Jos� Gaspar Rodr�guez de Francia, a criollo who distrusted his own criollo upper class, strengthened this pattern of marrying Indians. Francia forced the elite to marry Indian women, confiscated their lands, and broke their power. The disastrous 1865-70 War of the Triple Alliance, which ended with the death of Paraguayan dictator Francisco Solano L�pez, further strengthened the mestizo composition of society. At the end of the war, only 28,000 Spanish males were alive, down from 220,000. Spanish women who wanted to marry had no choice but to accept mestizo suitors.

Dictatorship is to Paraguay what constitutional democracy is to Scandinavia or Britain: it is the norm. Paraguay, a country where power has usually been centered on one man, has a history of domination by authoritarian personalities. Paraguay's authoritarianism derives from Spanish attitudes, isolation amid hostile neighbors, and political inexperience and naivet� among a population that has historically proved willing to abdicate its political rights and responsibilities. Nearly 300 years of Spanish rule rendered many Paraguayans poor, uneducated, unaware of the outside world, and lacking in experience with democracy. Furthermore, the people were nearly always under the threat of attack either from Indians or from raiders from Brazil. Indeed, its three neighbors--Brazil, Argentina, and Bolivia--each went to war with Paraguay at least once since 1810.

Francia, named "dictator for life" in 1816 by a largely uneducated nation grateful for his diplomatic and administrative expertise, set the tone by founding a despotic police state that lasted until his death in 1840. His goal was to keep the country independent at all costs. He succeeded by founding the world's first system of state socialism, sealing off the country's borders, and pouring all available resources into defense. Paraguay was the only major country in Spanish America to undergo a major social revolution as a direct result of independence. Father and son dictators Carlos Antonio L�pez and Francisco Solano L�pez succeeded Francia from 1841 to 1862 and 1862 to 1870, respectively. After the 1865-70 war, military officers began to replace civilians as politicians but this fact represented no change in the country's pattern of dictatorial rule.

Paraguay's stability diminished after 1904 when the Liberal Party (Partido Liberal--PL) ruled the nation. Paraguay had traded stable dictatorships for unstable ones. Between 1904 and 1954, Paraguay had thirty-one presidents, most of whom were removed from office by force. During the particularly unstable period between 1910 and 1912, seven presidents entered and left office. As political instability grew, so did the importance of the military in politics. Still, military rule did not predominate. Only four of eight presidents who finished their terms were military men.

A 1954 coup ushered in the Stronato, the period of rule of Alfredo Stroessner Mattiauda, who remained in power in late 1988. Few imagined in the 1950s that Stroessner's term of office would become the longest in Paraguay's history. Stroessner effectively combined political skill, hard work, and repression to gain complete control of the National Republican Association-Colorado Party (Asociaci�n Nacional Republicana-Partido Colorado) and eliminate regime opponents. By the early 1960s, all other political parties were either legitimating the political system by participating in fraudulent elections or were effectively isolated.

Although Stroessner clearly represented continuity with Paraguay's authoritarian past, he also dragged the country out of its isolation. A mammoth hydroelectric project at Itaip� on the Rio Paran� shattered Paraguay's seclusion forever by injecting billions of dollars into the economy. The project put money into the pockets of previously penniless campesinos and contributed to the emergence of the middle class. Many observers believed that economic growth unleashed demands for democratic reform in Paraguay, and, as the 1980s began, the Stroessner regime seemed increasingly under attack from its critics.


On the night of February 2, 1989, the streets of Asunci�n became a battleground as forces loyal to First Corps commander Major General Andr�s Rodr�guez staged a coup d'�tat against the government of President Alfredo Stroessner Mattiauda. Tank units of the First Cavalry Division left their �u Guaz� barracks and bombarded the headquarters of the armed forces general staff, the police, and the Presidential Escort Regiment. Elements of the air force's composite squadron also reportedly joined the rebels and carried out aerial attacks. After several hours of heavy fighting, Stroessner surrendered and offered his "irrevocable resignation from the post of president of the Republic of Paraguay and from the post of commander in chief of its armed forces"--positions that he had held since 1954. Typically for Paraguay, the coup was not a bloodless affair; estimates of the number killed ranged from Rodr�guez's claim of 27 to Western observers' assertions of up to 300.

During the fighting, the First Cavalry Division seized one of Asunci�n's radio stations and broadcast an appeal by Rodr�guez to the people of Paraguay. The military had left its barracks, the general asserted, "to defend the dignity and honor of the armed forces, for the total and complete unification of the Colorado Party (Asociaci�n Nacional Republicana-Partido Colorado) in government, for the initiation of democratization in Paraguay, for respect for human rights, and for respect for our Christian, apostolic, Roman Catholic religion." In fact, the coup was actually a struggle for political control of a post-Stroessner Paraguay.

Relying on a system of coercion and cooptation, Stroessner had brought remarkable political stability to a nation that experienced over twenty coups between 1870 and 1954. Stroessner's skillful use of the ruling Colorado Party as a dispenser of jobs and patronage was a major factor in achieving this stability. Political stability also resulted from twenty years of sustained economic growth. This was especially true during the 1970s, when construction of the Itaip� hydroelectric plant, completion of the road from Asunci�n to Puerto Presidente Stroessner and links to Brazilian Atlantic ports, land colonization along the Brazilian border, and increases in agricultural commodity prices combined to produce gross domestic product (GDP) growth of over 8 percent a year.

By the mid-1980s, however, compelling signs pointed to the twilight of the Stronato, as the Stroessner era was called. Real GDP declined in 1982 and 1983 following the completion of most construction at Itaip� and the drop in commodity prices. Foreign governments increasingly condemned and isolated the Stroessner regime for its repression of the political opposition and its reliance on electoral fraud. In addition, Stroessner turned seventy in 1982 and seemed to lose some of his legendary energy and capacity for hard work as he grew older.

It was not surprising, therefore, that leaders of the Colorado Party began to jockey for position. In the mid-1980s, the party's thirty-five-member governing board, the National Committee (Junta de Gobierno), split into rival militant (militante) and traditionalist (tradicionalista) camps. The militants were led by four key members of Stroessner's inner circle: Sabino Augusto Montanaro, minister of interior; Ad�n Godoy Jim�nez, minister of public health and social welfare; Jos� Eugenio Jacquet, minister of justice and labor; and Mario Abdo Ben�tez, the president's private secretary. Each of these men had personally profited from the Stronato and felt much more loyalty to Stroessner personally than to the Colorado Party. These militants wanted as little change as possible in any future government. Indeed, many militants promoted air force Lieutenant Colonel Gustavo Stroessner Mora as the ideal successor to his father. Juan Ram�n Chaves, the party's president since the early 1960s, headed the traditionalists. Unlike the militants, traditionalist leaders came from distinguished families who had dominated the Colorado Party prior to Stroessner. Although loyal collaborators throughout the Stronato, traditionalists also believed that continued reliance on repression would spell doom for the Colorado Party.

Although the militant-traditionalist split had been brewing since the mid-1980s, it burst into public prominence with the party's National Convention in August 1987. Montanaro employed the police to deny traditionalists access to the convention hall, thus ensuring his election as party president and the elections of Abdo Ben�tez, Godoy, and Jacquet as the three vice presidents. Stroessner, who had largely remained above the fray, soon endorsed the militants' takeover of the party. The militants continued their purge of the traditionalists over the next year, excluding them from the slate of Colorado Party congressional candidates for the February 1988 election, removing them from key positions within the government, and subjecting them to torrents of abuse in the national media.

Although clearly in control, the militants stumbled badly in late 1988 by becoming embroiled in yet another controversy with the Roman Catholic Church. In the late 1980s, the church had emerged as Stroessner's most important critic. Its newspaper and radio station broadcast accounts of human rights abuses in Paraguay. The Catholic bishops also issued numerous pastorals condemning government corruption and calling for an end to political violence against regime opponents. The government frequently responded by harassing or deporting priests. In November 1988, however, the militants overstepped the bounds of propriety in the eyes of many Paraguayans by leveling a personal attack against An�bal Maricevich Fleitas, the bishop of Concepci�n and a persistent Stroessner critic. Appearing at a Colorado Party rally, National Committee member Ram�n Aquino accused Maricevich of being a communist-follower and a drunkard, and dedicated a bottle of liquor in the name of "Maricewhiskey." Despite widespread outrage within Paraguay, the militant leadership strongly endorsed Aquino's right to free expression. Aquino soon escalated the conflict by accusing the clergy of being beholden to Cuban leader Fidel Castro Ruz and Nicaraguan president Daniel Ortega Saavedra. In response, Ismael Rol�n Silvero, the archbishop of Asunci�n, issued a decree barring Aquino from taking an active part in any religious ceremony, a measure one step short of excommunication. The Aquino episode apparently convinced many among the Paraguayan elites that the militants were too crude and unsophisticated to be trusted with the reins of government.

In addition to the Aquino affair, traditionalists benefited from the emergence of Luis Mar�a Arga�a as the de facto leader of the movement. In August 1988, Arga�a, an urbane, highly respected politician, stepped down from his post as chief justice of the Supreme Court of Justice after completing a five-year term of office. Although Arga�a was a known supporter of traditionalism, many recalled his ambiguous stance at the August 1987 party convention and wondered if he was really prepared to challenge the militants. In speeches in December 1988 and January 1989, however, Arga�a dispelled those doubts as he lashed out at the "imposters" who had seized control of the Colorado Party. Accusing the Stroessner government of becoming a police state, Arga�a thundered that those who persecute defenseless women or beat priests could not be considered Colorados or even Paraguayans. In response, Aquino accused Arga�a of being a traitor with "blue," i.e. Liberal Party (Partido Liberal), blood. Arga�a's statements gave new vitality to a movement that had been stagnating under the control of the octogenarian Chaves.

Although the militant-traditionalist battle dominated the headlines, the party's factions tacitly understood that the armed forces remained the ultimate arbiters of Paraguay's future. The armed forces, especially the senior officer corps, had benefited handsomely during the Stronato from involvement in a variety of legal and illegal businesses. Perhaps because they had so much to protect, however, many in the armed forces' upper echelon remained wary of the militants. In the late 1980s, observers felt that the army was particularly opposed to the idea of Stroessner's being succeeded by his son. Selection of an undistinguished air force officer as commander in chief would have challenged the army's status as the preeminent service and also might have necessitated the retirement of many senior officers.

Both sides in the Colorado Party power struggle also knew that General Rodr�guez's views would be critical in determining the military's stance. At first glance, Rodr�guez seemed an unlikely obstacle in the militants' path. As a young regimental commander in December 1955, Captain Rodr�guez defied his immediate superior and supported Stroessner's preemptive purge against the latter's chief rival at the time, Epifanio M�ndez Fleitas. In 1961 Stroessner selected his prot�g� Rodr�guez to head the powerful First Cavalry Division. In 1982 Stroessner reorganized the army into three corps and chose Rodr�guez to command the First--and most important-- Corps. As a result of this promotion, Rodr�guez had the best equipped units of the Paraguayan army at his disposal. The long-time professional bonds between Stroessner and Rodr�guez were also enhanced by the marriage of Stroessner's son Alfredo to Rodr�guez's daughter Marta.

But Rodr�guez's long period of service on behalf of the Stronato had apparently whetted his appetite for the presidency. Rodr�guez also had close ties with many traditionalist leaders. Finally, Alfredo and Marta's marital problems and Alfredo's reported addiction to drugs and alcohol strained the relationship of the two generals.

Stroessner and the militants thus apparently decided that the success of their plan required the neutralization of Rodr�guez. On January 12, 1989, two weeks after the promotion of his son to the rank of colonel, Stroessner announced a major reassignment of military commanders. Major General Orlando Machuca Vargas, a key ally of Rodr�guez, lost his post as Second Corps commander. The commanders of the Fifth and Seventh Infantry Divisions were sacked and replaced by officers presumed loyal to Stroessner. Stroessner also rotated the commanders of the Third, Fourth, and Sixth Infantry Divisions. The day also saw the swearing in of Stroessner loyalist Brigadier General Alcibiades Ram�n Soto Valleau as the new commander of the air force.

Stroessner apparently believed that these reassignments had eliminated Rodr�guez's ability to rally his fellow commanders and to stage a coup. Thus, the moment seemed propitious to strike directly against Rodr�guez. Citing a purported run on the national currency, the guaran�, Stroessner issued a resolution on January 27, 1989, closing all currency exchange houses in Paraguay. This action dealt a serious financial blow to Rodr�guez, whose Cambios Guaran� was one of Asunci�n's largest currency traders. On January 30, 1989, Stroessner ordered the replacement of First Corps colonels Mauricio Bartolom� D�az Delmas and Regis An�bal Romero Espinola. Finally, on February 2, 1989, Stroessner summoned Rodr�guez and ordered him to give up his direct command of units and either accept the much less significant post of minister of national defense or retire. Rodr�guez refused and several hours later called out his forces.

As it turned out, Stroessner's concerns over Rodr�guez's ambitions were not unwarranted. Two weeks after the coup, Edgar L. Ynsfr�n--minister of interior from 1956 to 1966 and leader of the Movement for Colorado Integration (Movimiento del Integraci�n Colorado) faction that was affiliated with the traditionalists-- reported that coup preparations had been under way since late December 1988. According to Ynsfr�n, Rodr�guez ordered Chaves, Arga�a, and Ynsfr�n to go into hiding immediately prior to the coup. In addition, Ynsfr�n claimed that on January 31, 1989, Rodr�guez informed key personnel in the First Corps that he would not accept the replacements of Colonels D�az and Romero. Whether Stroessner was aware of any of this background remains unknown.

In retrospect, Stroessner had overestimated the importance of the earlier command reassignments. The commanders of the Second Corps and Third Corps ignored Rodr�guez's appeal for help. But commanders of two of the three major components of the Second Corps--the Second and Fourth Infantry Divisions--and one of the three major units of the Third Corps--the Sixth Infantry Division-- pledged loyalty to Rodr�guez. In addition, all of Rodr�guez's First Corps units--the First Cavalry Division, the First Infantry Division, and the Third Infantry Division--rebelled against Stroessner. Within a week after the coup, Rodr�guez promoted the commanders of the six rebellious divisions and purged the armed forces hierarchy of Stroessner loyalists.

Hours after Stroessner's surrender, Rodr�guez assumed the presidency. Rodr�guez named a nine-member cabinet that had only one Stroessner holdover--the technocratic agriculture and livestock minister Hernando Bertoni Agr�n--and included General Machuca as interior minister, Arga�a as foreign minister, and Chaves as minister without portfolio. Rodr�guez also appointed Chaves and Arga�a as president and vice president, respectively, of the Council of State, a body that is primarily advisory in nature but that has the power to issue decrees during the legislature's recess. The traditionalist resurgence was solidified by the selection of Chaves, Arga�a, and Ynsfr�n as president, first vice president, and second vice president, respectively, of the Colorado Party, and the removal of all militants from the National Committee. Chaves also dissolved all party local committees (seccionales) and called for new party elections by March 19, 1989.

The new government went to great lengths to insist that its actions were based on the Constitution of 1967. Because the previous president had "resigned," Rodr�guez's title actually was the constitutionally mandated one of provisional president. Rodr�guez's call for a new presidential election on May 1, 1989, was consistent with Article 179 of the Constitution, which requires such an election within ninety days upon the resignation of a president who has served fewer than two years of his term. (Stroessner had begun serving his eighth term as president in August 1988.) Again consistent with the Constitution, the winner of the May 1989 election would not serve a five-year term but only the unexpired portion of Stroessner's term. Even Rodr�guez's decision on February 6, 1989, to dissolve the National Congress and to call for new elections in May--an action designed to purge the militants--was given a constitutional twist. Arga�a informed the media that Article 182 empowered the president to dissolve the legislature if the latter's actions distorted the balance of the three branches of government and adversely affected compliance with the Constitution. Arga�a also announced that the Council of State would exercise its constitutional prerogative to issue decrees during the legislature's absence.

In his first three weeks in office, Rodr�guez contended that Paraguay had become a much more democratic and open country. Indeed, much that occurred during this period would have been inconceivable under Stroessner's rule. The government announced that all political parties except the Paraguayan Communist Party (Partido Comunista Paraguayo) could complete in the May 1989 elections. This was an extraordinary turn of events for the parties comprising the National Accord (Acuerdo Nacional)--the Authentic Radical Liberal Party (Partido Liberal Radical Aut�ntico--PLRA), the Christian Democratic Party (Partido Dem�crata Cristiana), the Febrerista Revolutionary Party (Partido Revolucionario Febrerista-- PRF), and the Colorado Popular Movement (Movimiento Popular Colorado--Mopoco)--all of whose leaders had been repressed by Stroessner. Actually, Mopoco did not even have to plan for the elections because the traditionalists welcomed the movement back into the Colorado fold after thirty years in exile. The government not only authorized a National Accord rally on February 11 but also permitted it to broadcast live on television. For the first time in their history, Colorados opened their party headquarters to the opposition and warmly received an address by PLRA leader Domingo La�no. A few days after the coup, Humberto Rub�n's Radio �andut� was back on the air and the PRF's newspaper El Pueblo was publishing once again; the police had forced both to close in 1987. The new minister of education and worship stated that teachers need not join the Colorado Party as a condition of employment. Even a rapprochement with the church was in evidence. Rodr�guez and Rol�n embraced at a special mass to honor those who had died in the coup. In its first public statement, the new Council of State invited Rol�n to reoccupy the seat on the council that was reserved under the Constitution for the archbishop of Asunci�n. Rol�n had boycotted council meetings for many years as a protest against Stroessner's repression of the church.

Despite these remarkable developments, many observers remained skeptical concerning the flowering of democracy in Paraguay. From 1954 to 1987, traditionalists served as major collaborators of the Stronato. Positioned at all levels of government, traditionalists helped construct and institutionalize authoritarianism in Paraguay. For example, the Supreme Court rarely issued decisions at odds with the executive branch. Traditionalist legislators routinely enacted laws that served Stroessner's interest. After the coup, traditionalist leaders contended that Stroessner was a great president for thirty-three years but became surrounded by a group of "irresponsible, voracious politicians" in 1987. Such a contention appeared at odds with the structures of authoritarianism that had been in place by the mid-1950s.

Observers also questioned the traditionalist pledge to weed out corruption in government. Following the coup, police arrested over thirty members of Stroessner's government, including Abdo Ben�tez, Godoy, Aquino, Central Bank director C�sar Romeo Acosta, and Post Office director Modesto Esquivel. (Montanaro avoided arrest by fleeing to the Honduran embassy in Asunci�n, and Jacquet had the good fortune of being out of the country at the time of the coup.) Interior Minister Machuca announced that those arrested would be tried for corruption. Smuggling and corruption, however, did not begin in 1987 but were endemic throughout the Stronato, presumably to the benefit of many in the traditionalist camp.

Many observers also contended that President Rodr�guez had been a major practitioner of smuggling and corruption over the past thirty years. Critics charged that Rodr�guez had become a millionaire by smuggling cigarettes and whiskey into Paraguay. Rodr�guez's residence, a three-story palace reportedly modeled after Versailles, was one of the most sumptuous in Asunci�n. Rodr�guez's businesses, which were believed to include an air taxi service and a brewery in addition to his currency exchange house, reportedly benefited from the clout that the general exercised.

The most serious allegations against Rodr�guez concerned his reported involvement with narcotics trafficking. In the early 1970s, Rodr�guez allegedly protected the heroin-smuggling operation of Auguste Ricord, who used Asunci�n as a transshipment point for narcotics sent from Marseilles to New York. In 1985 police seized forty-three kilograms of cocaine from an airplane allegedly flown by Rodr�guez's personal pilot. The new president denied these allegations and pledged to wage "a firm and intransigent struggle against drug trafficking."

Less than a month after the coup, its real significance thus remained unclear. Certainly the new government was much more tolerant of opposition activities than was its predecessor. This tolerance created opportunities by allowing the opposition to organize openly for the first time. Rodr�guez's determination to project a democratic image also limited his ability to employ Stroessner's repressive tactics. But serious questions remained. The Colorado Party's organizational muscle was such that it was expected to win the May election handily, even without relying on electoral fraud. But if the opposition somehow won, many believed that the Colorados would not surrender power. Observers awaited future developments to determine if the coup was a breakthrough for democracy or the consolidation of authoritarian rule.




Early Explorers and Conquistadores

The recorded history of Paraguay began indirectly in 1516 with the failed expedition of Juan D�az de Sol�s to the R�o de la Plata Estuary, which divides Argentina and Uruguay. After Sol�s's death at the hands of Indians, the expedition renamed the estuary R�o de Sol�s and sailed back to Spain. On the home voyage, one of the vessels was wrecked off Santa Catarina Island near the Brazilian coast. Among the survivors was Aleixo Garc�a, a Portuguese adventurer who had acquired a working knowledge of Guaran�. Garc�a was intrigued by reports of "the White King" who, it was said, lived far to the west and governed cities of incomparable wealth and splendor. For nearly eight years, Garc�a patiently mustered men and supplies for a trip to the interior and finally left Santa Catarina with several European companions to raid the dominions of "El Rey Blanco."

Marching westward, Garc�a's group discovered Iguaz� Falls, crossed the R�o Paran�, and arrived at the site of Asunci�n thirteen years before it was founded. There the group gathered a small army of 2,000 Guaran� warriors to assist the invasion and set out boldly across the Chaco, a harsh semidesert. In the Chaco, they faced drought, floods, and cannibal Indian tribes. Garc�a became the first European to cross the Chaco and penetrated the outer defenses of the Inca Empire to the foothills of the Andes Mountains in present-day Bolivia, eight years in advance of Francisco Pizarro. The Garc�a entourage engaged in plundering and amassed a considerable horde of silver. Only fierce attacks by the reigning Inca, Huayna C�pac, convinced Garc�a to withdraw. Indian allies later murdered Garc�a and the other Europeans, but news of the raid on the Incas reached the Spanish explorers on the coast and attracted Sebastian Cabot to the R�o Paraguay two years later.

The son of the Genoese explorer John Cabot (who had led the first European expedition to North America), Sebastian Cabot was sailing to the Orient in 1526 when he heard of Garc�a's exploits. Cabot thought the R�o de Sol�s might provide easier passage to the Pacific and the Orient than the stormy Straits of Magellan where he was bound, and, eager to win the riches of Peru, he became the first European to explore that estuary.

Leaving a small force on the northern shore of the broad estuary, Cabot proceeded up the R�o Paran� uneventfully for about 160 kilometers and founded a settlement he named Sancti Spiritu. He continued upstream for another 800 kilometers, past the junction with the R�o Paraguay. When navigation became difficult, Cabot turned back, but only after obtaining some silver objects that the Indians said came from a land far to the west. Cabot retraced his route on the R�o Paran� and entered the R�o Paraguay. Sailing upriver, Cabot and his men traded freely with the Guaran� tribes until a strong force of Agaces Indians attacked them. About forty kilometers below the site of Asunci�n, Cabot encountered a tribe of Guaran� in possession of silver objects, perhaps some of the spoils of Garc�a's treasure. Hoping he had found the route to the riches of Peru, Cabot renamed the river R�o de la Plata, although today the name applies only to the estuary as far inland as the city of Buenos Aires.

Cabot returned to Spain in 1530 and informed Emperor Charles V (1519-56) about his discoveries. Charles gave permission to Don Pedro de Mendoza to mount an expedition to the Plata basin. The emperor also named Mendoza governor of R�o de la Plata and granted him the right to name his successor. But Mendoza, a sickly, disturbed man, proved to be utterly unsuitable as a leader, and his cruelty nearly undermined the expedition. Choosing what was possibly the continent's worst site for the first Spanish settlement in South America, in February 1536 Mendoza built a fort at a poor anchorage on the southern side of the Plata estuary on an inhospitable, windswept, dead-level plain where not a tree or shrub grew. Dusty in the dry season, a quagmire in the rains, the place was inhabited by the fierce Querand� tribe that resented having the Spaniards as neighbors. The new outpost was named Buenos Aires (Nuestra Se�ora del Buen Ayre), although it was hardly a place one would visit for the "good air."

Mendoza soon provoked the Querand�s into declaring war on the Europeans. Thousands of them and their Timb� and Charr�a allies besieged the miserable company of half-starved soldiers and adventurers. The Spaniards were soon reduced to eating rats and the flesh of their deceased comrades.

Meanwhile, Juan de Ayolas, who was Mendoza's second-in-command and who had been sent upstream to reconnoiter, returned with a welcome load of corn and news that Cabot's fort at Sancti Spiritu had been abandoned. Mendoza promptly dispatched Ayolas to explore a possible route to Peru. Accompanied by Domingo Mart�nez de Irala, Ayolas again sailed upstream until he reached a small bay on the R�o Paraguay, which he named Candelaria, the present-day Fuerte Olimpo. Appointing Irala his lieutenant, Ayolas ventured into the Chaco and was never seen again.

After Mendoza returned unexpectedly to Spain, two other members of the expedition--Juan de Salazar de Espinosa and Gonzalo de Mendoza--explored the R�o Paraguay and met up with Irala. Leaving him after a short time, Salazar and Gonzalo de Mendoza descended the river, stopping at a fine anchorage. They commenced building a fort on August 15, 1537, the date of the Feast of the Assumption, and called it Asunci�n (Nuestra Se�ora Santa Mar�a de la Asunci�n). Within 20 years, the settlement had a population of about 1,500. Transcontinental shipments of silver passed through Asunci�n on their way from Peru to Europe. Asunci�n subsequently became the nucleus of a Spanish province that encompassed a large portion of southern South America--so large, in fact, that it was dubbed "La Provincia Gigante de Indias." Asunci�n also was the base from which this part of South America was colonized. Spaniards moved northwestward across the Chaco to found Santa Cruz in Bolivia; eastward to occupy the rest of present-day Paraguay; and southward along the river to refound Buenos Aires, which its defenders had abandoned in 1541 to move to Asunci�n.


Paraguay - The Young Colony


Uncertainties over the departure of Pedro de Mendoza led Charles V to promulgate a c�dula (decree) that was unique in colonial Latin America. The c�dula granted colonists the right to elect the governor of R�o de la Plata Province either if Mendoza had failed to designate a successor or if a successor had died. Two years later, the colonists elected Irala as governor. His domain included all of present-day Paraguay, Argentina, Uruguay, most of Chile, and large parts of Brazil and Bolivia. In 1542 the province became part of the newly established Viceroyalty of Peru, with its seat in Lima. Beginning in 1559, the Audiencia of Charcas (present-day Sucre, Bolivia) controlled the province's legal affairs.

Irala's rule set the pattern for Paraguay's internal affairs until independence. In addition to the Spaniards, Asunci�n included people--mostly men--from present-day France, Italy, Germany, England, and Portugal. This community of about 350 chose wives and concubines from among the Guaran� women. Irala had several Guaran� concubines, and he encouraged his men to marry Indian women and give up thoughts of returning to Spain. Paraguay soon became a colony of mestizos, and, prompted by Irala's example, the Europeans raised their offspring as Spaniards. Nevertheless, continued arrivals of Europeans allowed for the development of a criollo elite.

The Guaran�, the Cario, Tap�, Itatine, Guarajo, Tup�, and related subgroups, were generous people who inhabited an immense area stretching from the Guyana Highlands in Brazil to the R�o Uruguay. Because the Guaran� were surrounded by other hostile tribes, however, they were frequently at war. They believed that permanent wives were inappropriate for warriors, so their marital relations were loose. Some tribes practiced polygamy with the aim of increasing the number of offspring. Chiefs often had twenty or thirty concubines whom they shared freely with visitors, yet they treated their wives well. They often punished adulterers with death. Like the area's other tribes, the Guaran� were cannibals. But they usually ate only their most valiant foes captured in battle in the hope that they would gain the bravery and power of their victims.

In contrast with the hospitable Guaran�, the Chaco tribes, such as the Payagu� (whence the name Paraguay), Guaycur�, M'bay�, Abip�n, Mocob�, and Chiriguano, were implacable enemies of the whites. Travelers in the Chaco reported that the Indians there were capable of running with incredible bursts of speed, lassoing and mounting wild horses in full gallop, and catching deer bare-handed. Accordingly, the Guaran� accepted the arrival of the Spaniards and looked to them for protection against fiercer neighboring tribes. The Guaran� also hoped the Spaniards would lead them once more against the Incas.

The peace that had prevailed under Irala broke down in 1542 when Charles V appointed Alvar N��ez Cabeza de Vaca--one of the most renowned conquistadors of his age--as governor of the province. Cabeza de Vaca arrived in Asunci�n after having lived for ten years among the Indians of Florida. Almost immediately, however, the Rio de la Plata Province--now consisting of 800 Europeans--split into 2 warring factions. Cabeza de Vaca's enemies accused him of cronyism and opposed his efforts to protect the interests of the Indians. Cabeza de Vaca tried to placate his enemies by launching an expedition into the Chaco in search of a route to Peru. This move disrupted the Chaco tribes so much that they unleashed a twoyear war against the colony, thus threatening its existence. In the colony's first of many revolts against the crown, the settlers seized Cabaza de Vaca, sent him back to Spain in irons, and returned the governorship to Irala.

Irala ruled without further interruption until his death in 1556. In many ways, his governorship was one of the most humane in the Spanish New World at that time, and it marked the transition among the settlers from conquerors to landowners. Irala kept up good relations with the Guaran�, pacified hostile Indians, made further explorations of the Chaco, and began trade relations with Peru. This Basque soldier of fortune saw the beginnings of a textile industry and the introduction of cattle, which flourished in the country's fertile hills and meadows. The arrival of Father Pedro Fern�ndez de la Torre on April 2, 1556, as the first bishop of Asunci�n marked the establishment of the Roman Catholic Church in Paraguay. Irala presided over the construction of a cathedral, two churches, three convents, and two schools.

Irala eventually antagonized the Indians, however. In the last years of his life, he yielded to pressure from settlers and established the encomienda. Under this system, setlers received estates of land along with the right to the labor and produce of the Indians living on those estates. Although encomenderos were expected to care for the spiritual and material needs of the Indians, the system quickly degenerated into virtual slavery. In Paraguay 20,000 Indians were divided among 320 encomenderos. This action helped spark a full-scale Indian revolt in 1560 and 1561. Political instability began troubling the colony and revolts became commonplace. Also, given his limited resources and manpower, Irala could do little to check the raids of Portuguese marauders along his eastern borders. Still, Irala left Paraguay prosperous and relatively at peace. Although he had found no El Dorado to equal those of Hern�n Cort�s in Mexico and Pizarro in Peru, he was loved by his people, who lamented his passing.


Paraguay - The Sword of the Word


During the next 200 years, the Roman Catholic Church--especially the ascetic, single-minded members of the Society of Jesus (the Jesuits)--had much more influence on the colony's social and economic life than the feckless governors who succeeded Irala. Three Jesuits--an Irishman, a Catalan, and a Portuguese--arrived in 1588 from Brazil. They promptly moved from Asunci�n to proselytize among the Indians along the upper R�o Paran�. Because they already believed in an impersonal, supreme being, the Guaran� proved to be good pupils of the Jesuits.

In 1610 Philip III (1598-1621) proclaimed that only the "sword of the word" should be used to subdue the Paraguayan Indians, thus making them happy subjects. The church granted extensive powers to Jesuit Father Diego de Torres to implement a new plan, with royal blessings, that foresaw an end to the encomienda system. This plan angered the settlers, whose lifestyle depended on a continuing supply of Indian labor and concubines. The settlers' resistance helped convince the Jesuits to move their base of operations farther afield to the province of Guayr� in the distant northeast. After unsuccessful attempts to "civilize" the recalcitrant Guaycur�, the Jesuits eventually put all their efforts into working with the Guaran�. Organizing the Guaran� in reducciones (reductions or townships), the hard-working fathers began a system that would last more than a century. In one of history's greatest experiments in communal living, the Jesuits had soon organized about 100,000 Guaran� in about 20 reducciones, and they dreamed of a Jesuit empire that would stretch from the Paraguay-Paran� confluence to the coast and back to the Paran� headwaters.

The new Jesuit reducciones were unfortunately within striking distance of the mamelucos, the slave-raiding, mixed-race descendants of Portuguese and Dutch adventurers. The mamelucos were based in S�o Paulo, Brazil, which had become a haven for freebooters and pirates by the early 1600s because it was beyond the control of the Portuguese colonial governor. The mamelucos survived mostly by capturing Indians and selling them as slaves to Brazilian planters. Having depleted the Indian population near S�o Paulo, they ventured farther afield until they discovered the richly populated reducciones. The Spanish authorities chose not to defend the settlements.

Spain and Portugal were united from 1580 to 1640. Although their colonial subjects were at war, the governor of Rio de la Plata Province had little incentive to send scarce troops and supplies against an enemy who was nominally of the same nationality. In addition, the Jesuits were not popular in Asunci�n, where the settlers had the governor's ear. The Jesuits and their thousands of neophytes thus had little means to protect themselves from the depredations of the "Paulistas," as the mamelucos also were called (because they came from S�o Paulo). In one such raid in 1629, about 3,000 Paulistas destroyed the reducciones in their path by burning churches, killing old people and infants (who were worthless as slaves), and carrying off to the coast entire human populations, as well as cattle. Their first raids on the reducciones netted them at least 15,000 captives.

Faced with the awesome challenge of a virtual holocaust that was frightening away their neophytes and encouraging them to revert to paganism, the Jesuits took drastic measures. Under the leadership of Father Antonio Ru�z de Montoya, as many as 30,000 Indians (2,500 families) retreated by canoe and traveled hundreds of kilometers south to another large concentration of Jesuit reducciones near the lower Paran�. About 12,000 people survived. But the retreat failed to deter the Paulistas, who continued to raid and carry off slaves until even the reducciones far to the south faced extinction. The Paulista threat ended only after 1639, when the viceroy in Peru agreed to allow Indians to bear arms. Welltrained and highly motivated Indian units, serving under Jesuit officers, bloodied the raiders and drove them off.

Victory over the Paulistas set the stage for the golden age of the Jesuits in Paraguay. The Guaran� were unaccustomed to the discipline and the sedentary life prevalent in the reducciones, but adapted to it readily because it offered them higher living standards, protection from settlers, and physical security. By 1700 the Jesuits could again count 100,000 neophytes in about 30 reducciones. The reducciones exported goods, including cotton and linen cloth, hides, tobacco, lumber, and above all, yerba mat�, a plant used to produce a bitter tea that is popular in Paraguay and Argentina. The Jesuits also raised food crops and taught arts and crafts. In addition, they were able to render considerable service to the crown by supplying Indian armies for use against attacks by the Portuguese, English, and French. At the time of the expulsion of the Jesuits from the Spanish Empire in 1767, the reducciones were enormously wealthy and comprised more than 21,000 families. Their vast herds included approximately 725,000 head of cattle, 47,000 oxen, 99,000 horses, 230,000 sheep, 14,000 mules, and 8,000 donkeys.

Because of their success, the 14,000 Jesuits who had volunteered over the years to serve in Paraguay gained many enemies. They were a continual goad to the settlers, who viewed them with envy and resentment and spread rumors of hidden gold mines and the threat to the crown from an independent Jesuit republic. To the crown, the reducciones seemed like an increasingly ripe plum, ready for picking.

The reducciones fell prey to changing times. During the 1720s and 1730s, Paraguayan settlers rebelled against Jesuit privileges and the government that protected them. Although this revolt failed, it was one of the earliest and most serious risings against Spanish authority in the New World and caused the crown to question its continued support for the Jesuits. The Jesuit-inspired War of the Seven Reductions (1750-61), which was fought to prevent the transfer to Portugal of seven missions south of the R�o Uruguay, increased sentiment in Madrid for suppressing this "empire within an empire."

In a move to gain the reducciones' wealth to help finance a planned reform of Spanish administration in the New World, the Spanish king, Charles III (1759-88), expelled the Jesuits in 1767. Within a few decades of the expulsion, most of what the Jesuits had accomplished was lost. The missions lost their valuables, became mismanaged, and were abandoned by the Guaran�. The Jesuits vanished almost without a trace. Today, a few weed-choked ruins are all that remain of this 160-year period in Paraguayan history.




Struggle with the Porte�os

The Viceroyalty of Peru and the Audiencia of Charcas had nominal authority over Paraguay, while Madrid largely neglected the colony. Madrid preferred to avoid the intricacies and the expense of governing and defending a remote colony that had shown early promise but ultimately proved to have dubious value. Thus, governors of Paraguay had no royal troops at their disposal and were instead dependent on a militia composed of colonists. Paraguayans took advantage of this situation and claimed that the 1537 c�dula gave them the right to choose and depose their governors. The colony, and in particular the Asunci�n municipal council (cabildo), earned the reputation of being in continual revolt against the crown.

Tensions between royal authorities and settlers came to a head in 1720 over the status of the Jesuits, whose efforts to organize the Indians had denied the settlers easy access to Indian labor. A full-scale rebellion, known as the Comu�ero Revolt, broke out when the viceroy in Lima reinstated a pro-Jesuit governor whom the settlers had deposed. The revolt was in many ways a rehearsal for the radical events that began with independence in 1811. The most prosperous families of Asunci�n (whose yerba mat� and tobacco plantations competed directly with the Jesuits) initially led this revolt. But as the movement attracted support from poor farmers in the interior, the rich abandoned it and soon asked the royal authorities to restore order. In response, subsistence farmers began to seize the estates of the upper class and drive them out of the countryside. A radical army nearly captured Asunci�n and was repulsed, ironically, only with the help of Indian troops from the Jesuit reducciones.

The revolt was symptomatic of decline. Since the refounding of Buenos Aires in 1580, the steady deterioration in the importance of Asunci�n contributed to growing political instability within the province. In 1617 the R�o de la Plata Province was divided into two smaller provinces: Paraguay, with Asunci�n as its capital, and R�o de la Plata, with headquarters in Buenos Aires. With this action, Asunci�n lost control of the R�o de la Plata Estuary and became dependent on Buenos Aires for maritime shipping. In 1776 the crown created the Viceroyalty of R�o de la Plata; Paraguay, which had been subordinate to Lima, now became an outpost of Buenos Aires. Located at the periphery of the empire, Paraguay served as a buffer state. The Portuguese blocked Paraguayan territorial expansion in the north, Indians blocked it--until their expulsion--in the south, and the Jesuits blocked it in the east. Paraguayans were forced into the colonial militia to serve extended tours of duty away from their homes, contributing to a severe labor shortage.

Because Paraguay was located far from colonial centers, it had little control over important decisions that affected its economy. Spain appropriated much of Paraguay's wealth through burdensome taxes and regulations. Yerba mat�, for instance, was priced practically out of the regional market. At the same time, Spain was using most of its wealth from the New World to import manufactured goods from the more industrialized countries of Europe, notably Britain. Spanish merchants borrowed from British merchants to finance their purchases; merchants in Buenos Aires borrowed from Spain; those in Asunci�n borrowed from the porte�os (as residents of Buenos Aires were called); and Paraguayan peones (landless peasants in debt to landlords) bought goods on credit. The result was dire poverty in Paraguay and an increasingly impoverished empire.

The French Revolution, the rise of Napoleon Bonaparte, and the subsequent war in Europe inevitably weakened Spain's ability to maintain contact with and defend and control its colonies. When British troops attempted to seize Buenos Aires in 1806, the attack was repulsed by the city's residents, not by Spain. Napoleon's invasion of Spain in 1808, the capture of the Spanish king, Ferdinand VII (ruled 1808, 1814-33), and Napoleon's attempt to put his brother, Joseph Bonaparte, on the Spanish throne, severed the major remaining links between metropolis and satellite. Joseph had no constituency in Spanish America. Without a king, the entire colonial system lost its legitimacy, and the colonists revolted. Buoyed by their recent victory over British troops, the Buenos Aires cabildo deposed the Spanish viceroy on May 25, 1810, vowing to rule in the name of Ferdinand VII.

The porte�o action had unforseen consequences for the histories of Argentina and Paraguay. News of the events in Buenos Aires at first stunned the citizens of Asunci�n, who had largely supported the royalist position. But no matter how grave the offenses of the ancien r�gime may have been, they were far less rankling to the proud Paraguayans than the indignity of being told to take orders from the porte�os. After all, Paraguay had been a thriving, established colony when Buenos Aires was only a squalid settlement on the edge of the empty pampas.

The porte�os bungled their effort to extend control over Paraguay by choosing Jos� Esp�nola y Pe�a as their spokesman in Asunci�n. Esp�nola was "perhaps the most hated Paraguayan of his era," in the words of historian John Hoyt Williams. Esp�nola's reception in Asunci�n was less than cordial, partly because he was closely linked to rapacious policies of the ex-governor, L�zaro de Rivera, who had arbitrarily shot hundreds of his citizens until he was forced from office in 1805. Barely escaping a term of exile in Paraguay's far north, Esp�nola fled back to Buenos Aires and lied about the extent of porte�o support in Paraguay, causing the Buenos Aires cabildo to make an equally disastrous move. In a bid to settle the issue by force, the cabildo sent 1,100 troops under General Manuel Belgrano to subdue Asunci�n. Paraguayan troops soundly thrashed the porte�os at Paraguar� and Tacuar�. Officers from both armies, however, fraternized openly during the campaign. From these contacts the Paraguayans came to realize that Spanish dominance in South America was coming to an end, and that they, and not the Spaniards, held the real power.

If the Esp�nola and Belgrano affairs served to whet nationalist passions in Paraguay, the Paraguayan royalists' ill-conceived actions that followed inflamed them. Believing that the Paraguayan officers who had whipped the porte�os posed a direct threat to his rule, Governor Bernardo de Velasco dispersed and disarmed the forces under his command and sent most of the soldiers home without paying them for their eight months of service. Velasco previously had lost face when he fled the battlefield at Paraguar�, thinking Belgrano would win. Discontent spread, and the last straw was the request by the Asunci�n cabildo for Portuguese military support against Belgrano's forces, who were encamped just over the border in present-day Argentina. Far from bolstering the cabildo's position, this move instantly ignited an uprising and the overthrow of Spanish authority in Paraguay on May 14 and 15, 1811. Independence was declared on May 17.


Paraguay - Jose Gaspar Rodriguez de Francia


Jos� Gaspar Rodr�guez de Francia was one of the greatest figures in Paraguayan history. Ruling from 1814 until his death in 1840, Francia succeeded almost single-handedly in building a strong, prosperous, secure, and independent nation at a time when Paraguay's continued existence as a distinct country seemed unlikely. He left Paraguay at peace, with government coffers full and many infant industries flourishing. Frugal, honest, competent, and diligent, Francia was tremendously popular with the lower classes. But despite his popularity, Francia trampled on human rights, imposing an authoritarian police state based on espionage and coercion. Under Francia, Paraguay underwent a social upheaval that destroyed the old elites.

Paraguay at independence was a relatively undeveloped area. Most residents of Asunci�n and virtually all rural settlers were illiterate. Urban elites did have access to private schools and tutoring. University education was, however, restricted to the few who could afford studies at the University of C�rdoba, in presentday Argentina. Practically no one had any experience in government, finance, or administration. The settlers treated the Indians as little better than slaves, and the paternalistic clergy treated them like children. The country was surrounded by hostile neighbors, including the warlike Chaco tribes. Strong measures were needed to save the country from disintegration.

Francia, born in 1766, spent his student days studying theology at the College of Monserrat at the University of C�rdoba. Although he was dogged by suggestions that his father--a Brazilian tobacco expert--was a mulatto, Francia was awarded a coveted chair of theology at the Seminary of San Carlos in Asunci�n in 1790. His radical views made his position as a teacher there untenable, and he soon gave up theology to study law. A devotee of the Enlightenment and the French Revolution, a keen reader of Voltaire, Jean-Jacques Rousseau, and the French Encyclopedists, Francia had the largest library in Asunci�n. His interest in astronomy, combined with his knowledge of French and other subjects considered arcane in Asunci�n, caused some superstitious Paraguayans to regard him as a wizard capable of predicting the future. As a lawyer, he became a social activist and defended the less fortunate against the affluent. He demonstrated an early interest in politics and attained with difficulty the position of alcalde del primer voto, or head of the Asunci�n cabildo, by 1809, the highest position he could aspire to as a criollo.

After the cuartelazo (coup d'�tat) of May 14-15, which brought independence, Francia became a member of the ruling junta. Although real power rested with the military, Francia's many talents attracted support from the nation's farmers. Probably the only man in Paraguay with diplomatic, financial, and administrative skills, Francia built his power base on his organizational abilities and his forceful personality. By outwitting porte�o diplomats in the negotiations that produced the Treaty of October 11, 1811 (in which Argentina implicitly recognized Paraguayan independence in return for vague promises of a military alliance), Francia proved that he possessed skills crucial to the future of the country.

Francia consolidated his power by convincing the insecure Paraguayan elite that he was indispensable. But at the end of 1811, dissatisfied with the political role that military officers were beginning to play, he resigned from the junta. From his retirement in his modest chacra (cottage or hut) at Ibaray, near Asunci�n, he told countless ordinary citizens who came to visit him that their revolution had been betrayed, that the change in government had only traded a Spanish-born elite for a criollo one, and that the present government was incompetent and mismanaged. In fact, the country was rapidly heading for a crisis. Not only were the Portuguese threatening to overrun the northern frontiers, but Argentina had also practically closed the R�o de la Plata to Paraguayan commerce by levying taxes and seizing ships. To make matters worse, the porte�o government agitated for Paraguayan military assistance against the Spanish in Uruguay and, disregarding the Treaty of October 11, for unification of Paraguay with Argentina. The porte�o government also informed the junta it wanted to reopen talks.

When the junta learned that a porte�o diplomat was on his way to Asunci�n, it panicked because it realized it was not competent to negotiate without Francia. In November 1812, the junta members invited Francia to take charge of foreign policy, an offer Francia accepted. In return, the junta agreed to place one-half of the army and half the available munitions under Francia's command. In the absence of anyone equal to him on the junta, Francia now controlled the government. When the Argentine envoy, Nicol�s de Herrera, arrived in May 1813, he learned to his dismay that all decisions had to await the meeting of a Paraguayan congress in late September. Meanwhile, Paraguay again declared itself independent of Argentina and expelled two junta members known to be sympathetic to union with Argentina. Under virtual house arrest, Herrera had little scope to build support for unification, even though he resorted to bribery.

The congress, which met on September 30, 1813, was certainly the first of its kind in Latin America. There were more than 1,100 delegates chosen by universal male suffrage, and many of these delegates represented the poor, rural Paraguayan majority. Ironically, the decisions of this democratically elected body would set the stage for a long dictatorship. Herrera was neither allowed to attend the sessions, nor to present his declaration; instead the congress gave overwhelming support to Francia's anti-imperialist foreign policy. The delegates rejected a proposal for Paraguayan attendance at a constitutional congress at Buenos Aires and established a Paraguayan republic--the first in Spanish America-- with Francia as first consul. Francia was supposed to trade places every four months with the second consul, Fulgencio Yegros, but Francia's consulship marked the beginning of his direct rule because Yegros was little more than a figurehead. Yegros, a man without political ambitions, represented the nationalist criollo military elite, but Francia was the more powerful because he derived his strength from the nationalist masses.


Paraguay - El Supremo Dictador


Francia, described by a historian as "the frail man in the black frock coat," admired and emulated the most radical elements of the French Revolution. Although he has been compared to the Jacobin leader Maximilien de Robespierre (1758-94), Francia's policies and ideals perhaps most closely resembled those of Fran�ois-No�l Babeuf, a French utopian who wanted to abolish private property and communalize land as a prelude to founding a "republic of equals." Francia detested the political culture of the old regime and considered himself a "revolutionary."

In essence, the government of Cara� Guaz� ("Great Se�or," as Francia was called by the poor) was a dictatorship that destroyed the power of the elite and advanced the interests of common Paraguayans. A system of internal espionage destroyed free speech. People were arrested without charge and disappeared without trial. Torture in the so-called Chamber of Truth was applied to those suspected of plotting to overthrow Francia. Francia sent political prisoners--numbering approximately 400 in any given year--to a detention camp where they were shackled in dungeons and denied medical care and even the use of sanitary facilities. In an indirect act of revenge against people who had discriminated against him because of his supposed "impure blood," Francia forbade Europeans from marrying other Europeans, thus forcing the elite to choose spouses from among the local population. Francia tightly sealed Paraguay's borders to the outside world and executed anyone who attempted to leave the country. Foreigners who managed to enter Paraguay had to remain there for the rest of their lives. Paraguayan commerce declined practically to nil. The decline ruined exporters of yerba mat� and tobacco. These measures fell most harshly on the members of the former ruling class of Spanish or Spanish-descended church officials, military officers, merchants, and hacendados (large landowners).

In 1820, four years after a Paraguayan congress had named Francia dictator for life with the title El Supremo Dictador (supreme dictator), Francia's security system uncovered and quickly crushed a plot by the elite to assassinate El Supremo. Francia arrested almost 200 prominent Paraguayans and eventually executed most of them. In 1821 Francia struck again, summoning all of Paraguay's 300 or so peninsulares (people born in Spain) to Asunci�n's main square, where he accused them of treason, had them arrested, and led them off to jail for 18 months. Francia released them only after they agreed to pay an enormous collective indemnity of 150,000 pesos (about 75 percent of the annual state budget), an amount so large that it broke their predominance in the Paraguayan economy.

One of Francia's special targets was the Roman Catholic Church. The church had provided an essential ideological underpinning to Spanish rule by spreading the doctrine of the "divine right of kings" and inculcating the Indian masses with a resigned fatalism about their social status and economic prospects. Francia banned religious orders, closed the country's only seminary, "secularized" monks and priests by forcing them to swear loyalty to the state, abolished the fuero eclesi�stico (the privilege of clerical immunity from civil courts), confiscated church property, and subordinated church finances to state control.

The common people of Paraguay benefited from the repression of the traditional elites and the expansion of the state. The state took land from the elite and the church and leased it to the poor. About 875 families received homesteads from the lands of the former seminary. The various fines and confiscations levied on the criollos helped reduce taxes for everyone else. As a result, Francia's attacks on the elite and his state socialist policies provoked little popular resistance. The fines, expropriations, and confiscations of foreign-held property meant that the state quickly became the nation's largest landowner, eventually operating fortyfive animal-breeding farms. Run by army personnel, the farms were so successful that the surplus animals were given away to the peasants.

In contrast to other states in the region, Paraguay was efficiently and honestly administered, stable, and secure (the army having grown to 1,800 regulars). Crime continued to exist during the Franciata (the period of Francia's rule), but criminals were treated leniently. Murderers, for example, were put to work on public projects. Asylum for political refugees from other countries became a Paraguayan hallmark. An extremely frugal and honest man, Francia left the state treasury with at least twice as much money in it as when he took office, including 36,500 pesos of his unspent salary, or at least several years' salary.

The state soon developed native industries in shipbuilding and textiles, a centrally planned and administered agricultural sector, which was more diversified and productive than the prior export monoculture, and other manufacturing capabilities. These developments supported Francia's policy of virtual economic autarchy.

But Francia's greatest accomplishment--the preservation of Paraguayan independence--resulted directly from a noninterventionist foreign policy. Deciding that Argentina was a potential threat to Paraguay, he shifted his foreign policy toward Brazil by quickly recognizing Brazilian independence in 1821. This move, however, resulted in no special favors for the Brazilians from Francia, who was also on good, if limited, terms with Juan Manuel Rosas, the Argentine dictator. Francia prevented civil war and secured his role as dictator when he cut off his internal enemies from their friends in Buenos Aires. Despite his "isolationist" policies, Francia conducted a profitable but closely supervised import-export trade with both countries to obtain key foreign goods, particularly armaments. A more activist foreign policy than Francia's probably would have made Paraguay a battleground amid the swirl of revolution and war that swept Argentina, Uruguay, and southern Brazil in the decades following independence.

All of these political and economic developments put Paraguay on the path of independent nationhood, yet the country's undoubted progress during the years of the Franciata took place because of complete popular abdication to Francia's will. El Supremo personally controlled every aspect of Paraguayan public life. No decision at the state level, no matter how small, could be made without his approval. All of Paraguay's accomplishments during this period, including its existence as a nation, were attributable almost entirely to Francia. The common people saw these accomplishments as Francia's gifts, but along with these gifts came political passivity and na�vet� among most Paraguayans.




Carlos Antonio L�pez

Confusion overtook the state in the aftermath of Francia's death on September 20, 1840, because El Supremo, now El Difunto (the Dead One), had left no successor. After a few days, a junta emerged, freed some political prisoners, and soon proved itself ineffectual at governing. In January 1841, the junta was overthrown. Another coup followed sixteen days later, and chaos continued until in March 1841 congress chose Carlos Antonio L�pez as first consul. In 1844 another congress named L�pez president of the republic, a post he held until his death in 1862. Paraguay had its second dictator.

L�pez, a lawyer, was one of the most educated men in the country. Until his elevation to consul, L�pez, born in 1787, had lived in relative obscurity. Although L�pez's government was similar to Francia's system, his appearance, style, and policies were quite different. In contrast to Francia, who was lean, L�pez was obese--a "great tidal wave of human flesh," according to one who knew him. L�pez was a despot who wanted to found a dynasty and run Paraguay like a personal fiefdom. Francia had pictured himself as the first citizen of a revolutionary state, whereas L�pez used the all-powerful state bequeathed by the proverbially honest Francia to enrich himself and his family.

L�pez soon became the largest landowner and cattle rancher in the country, amassing a fortune, which he augmented with the state's monopoly profits from the yerba mat� trade. Despite his greed, Paraguay prospered under El Excelent�simo (the Most Excellent One), as L�pez was known. Under L�pez, Paraguay's population increased from about 220,000 in 1840 to about 400,000 in 1860. Several highways and a telegraph system were built. A British firm began building a railroad, one of South America's first, in 1858. During his term of office, L�pez improved national defense, abolished the remnants of the reducciones, stimulated economic development, and tried to strengthen relations with foreign countries. He also took measures to reduce the threat to settled Paraguayans from the marauding Indian tribes that still roamed the Chaco. Paraguay also made large strides in education. When L�pez took office, Asunci�n had only one primary school. During L�pez's reign, more than 400 schools were built for 25,000 primary students, and the state reinstituted secondary education. L�pez's educational development plans progressed with difficulty, however, because Francia had purged the country of the educated elite, which included teachers.

Less rigorous than Francia, L�pez loosened restrictions on foreign intercourse, boosted exports, invited foreign physicians, engineers, and investors to settle in Paraguay, and paid for students to study abroad. He also sent his son Francisco Solano to Europe to buy guns.

Like Francia, L�pez had the overriding aim of defending and preserving Paraguay. He launched reforms with this goal in mind. Trade eased arms acquisitions and increased the state's income. Foreign experts helped build an iron factory and a large armory. The new railroad was to be used to transport troops. L�pez used diplomacy to protect the state's interests abroad. Yet despite his apparent liberality, Antonio L�pez was a dictator who held Paraguayans on a tight leash. He allowed Paraguayans no more freedom to oppose the government than they had had under Francia. Congress became his puppet, and the people abdicated their political rights, a situation enshrined in the 1844 constitution, which placed all power in L�pez's hands.

Under L�pez, Paraguay began to tackle the question of slavery, which had existed since early colonial days. Settlers had brought a few slaves to work as domestic servants, but were generally lenient about their bondage. Conditions worsened after 1700, however, with the importation of about 50,000 African slaves to be used as agricultural workers. Under Francia, the state acquired about 1,000 slaves when it confiscated property from the elite. L�pez did not free these slaves; instead, he enacted the 1842 Law of the Free Womb, which ended the slave trade and guaranteed that the children of slaves would be free at age twenty-five. But the new law served only to increase the slave population and depress slave prices as slave birthrates soared.

Foreign relations began to increase in importance under L�pez, who retained Paraguay's traditional mistrust of the surrounding states, yet lacked Francia's diplomatic adroitness. Initially L�pez feared an attack by the Buenos Aires dictator Rosas. With Brazilian encouragement, L�pez had dropped Francia's policy of neutrality and began meddling in Argentine politics. Using the slogan "Independence or Death," L�pez declared war against Rosas in 1845 to support an unsuccessful rebellion in the Argentine province of Corrientes. Although complications with Britain and France prevented him from moving against Paraguay, Rosas quickly established a porte�o embargo on Paraguayan goods. After Rosas fell in 1852, L�pez signed a treaty with Buenos Aires that recognized Paraguay's independence, although the porte�os never ratified it. In the same year, L�pez signed treaties of friendship, commerce, and navigation with France and the United States. Nonetheless, growing tensions with several countries, including the United States, characterized the second half of L�pez's rule. In 1858 the United States sent a flotilla to Paraguayan waters in a successful action to claim compensation for an American sailor who had been killed three years earlier.

Although he wore his distrust for foreigners like a badge of loyalty to the nation, L�pez was not as cautious as he appeared. L�pez recklessly dropped Francia's key policies of neutrality without making the hard choices and compromises about where his allegiances lay. He allowed unsettled controversies and boundary disputes with Brazil and Argentina to smolder. The two regional giants had tolerated Paraguayan independence, partly because Paraguay served to check the expansionist tendencies of the other. Both were satisfied if the other could not dominate Paraguayan affairs. At the same time, however, a Paraguay that was antagonistic to both Brazil and Argentina would give these countries a reason for uniting.


Paraguay - Francisco Solano Lopez


Born in 1826, Francisco Solano Lopez became the second and final ruler of the Lopez dynasty. He had a pampered childhood. His father raised him to inherit his mantle and made him a brigadier general at the age of eighteen. He was an insatiable womanizer, and stories abound of the cruel excesses he resorted to when a woman had the courage to turn him down. His 1853 trip to Europe to buy arms was undoubtedly the most important experience of his life; his stay in Paris proved to be a turning point for him. There, Solano Lopez admired the trappings and pretensions of the French empire of Napoleon III. He fell in love with an Irish woman named Elisa Alicia Lynch, whom he made his mistress. "La Lynch," as she became known in Paraguay, was a strong-willed, charming, witty, intelligent woman who became a person of enormous influence in Paraguay because of her relationship with Solano Lopez. Lynch's Parisian manners soon made her a trendsetter in the Paraguayan capital, and she made enemies as quickly as she made friends. Lynch bore Solano Lopez five sons, although the two never married. She became the largest landowner in Paraguay after Solano Lopez transferred most of the country and portions of Brazil to her name during the war, yet she retained practically nothing when the war ended. She buried Solano Lopez with her own hands after the last battle in 1870 and died penniless some years later in Europe.

Solano Lopez consolidated his power after his father's death in 1862 by silencing several hundred critics and would-be reformers through imprisonment. Another Paraguayan congress then unanimously elected him president. Yet Solano Lopez would have done well to heed his father's last words to avoid aggressive acts in foreign affairs, especially with Brazil. Francisco's foreign policy vastly underestimated Paraguay's neighbors and overrated Paraguay's potential as a military power.

Observers sharply disagreed about Solano Lopez. George Thompson, an English engineer who worked for the younger Lopez (he distinguished himself as a Paraguayan officer during the War of the Triple Alliance, and later wrote a book about his experience) had harsh words for his ex-employer and commander, calling him "a monster without parallel." Solano Lopez's conduct laid him open to such charges. In the first place, Solano Lopez's miscalculations and ambitions plunged Paraguay into a war with Argentina, Brazil, and Uruguay. The war resulted in the deaths of half of Paraguay's population and almost erased the country from the map. During the war, Solano Lopez ordered the executions of his own brothers and had his mother and sisters tortured when he suspected them of opposition. Thousands of others, including Paraguay's bravest soldiers and generals, also went to their deaths before firing squads or were hacked to pieces on Solano Lopez's orders. Others saw Solano Lopez as a paranoid megalomaniac, a man who wanted to be the "Napoleon of South America," willing to reduce his country to ruin and his countrymen to beggars in his vain quest for glory.

However, sympathetic Paraguayan nationalists and foreign revisionist historians have portrayed Solano Lopez as a patriot who resisted to his last breath Argentine and Brazilian designs on Paraguay. They portrayed him as a tragic figure caught in a web of Argentine and Brazilian duplicity who mobilized the nation to repulse its enemies, holding them off heroically for five bloody, horror-filled years until Paraguay was finally overrun and prostrate. Since the 1930s, Paraguayans have regarded Solano Lopez as the nation's foremost hero.

Solano Lopez's basic failing was that he did not recognize the changes that had occurred in the region since Francia's time. Under his father's rule, the protracted, bloody, and distracting birth pangs of Argentina and Uruguay; the bellicose policies of Brazil; and Francia's noninterventionist policies had worked to preserve Paraguayan independence. Matters had decidedly settled down since then in both Argentina and Brazil, as both countries had become surer of their identities and more united. Argentina, for example, began reacting to foreign challenges more as a nation and less like an assortment of squabbling regions, as Paraguayans had grown to expect. Solano Lopez's attempt to leverage Paraguay's emergence as a regional power equal to Argentina and Brazil had disastrous consequences.


Paraguay - The War of the Triple Alliance


Solano L�pez accurately assessed the September 1864 Brazilian intervention in Uruguay as a slight to the region's lesser powers. He was also correct in his assumption that neither Brazil nor Argentina paid much attention to Paraguay's interests when they formulated their policies. But he concluded incorrectly that preserving Uruguayan "independence" was crucial to Paraguay's future as a nation. Consistent with his plans to start a Paraguayan "third force" between Argentina and Brazil, Solano L�pez committed the nation to Uruguay's aid. When Argentina failed to react to Brazil's invasion of Uruguay, Solano L�pez seized a Brazilian warship in November 1864. He quickly followed this move with an invasion of Mato Grosso, Brazil, in March 1865, an action that proved to be one of Paraguay's few successes during the war. Solano L�pez then decided to strike at his enemy's main force in Uruguay. But Solano L�pez was unaware that Argentina had acquiesced to Brazil's Uruguay policy and would not support Paraguay against Brazil. When Solano L�pez requested permission for his army to cross Argentine territory to attack the Brazilian province of R�o Grande do Sul, Argentina refused. Undeterred, Solano L�pez sent his forces into Argentina, probably expecting local strongmen to rebel and remove Argentina from the picture. Instead, the action set the stage for the May 1865 signing by Argentina, Brazil, and Uruguay (now reduced to puppet status) of the Treaty of the Triple Alliance. Under the treaty, these nations vowed to destroy Solano L�pez's government.

Paraguay was in no sense prepared for a major war, let alone a war of the scope that Solano L�pez had unleashed. In terms of size, Solano L�pez's 30,000-man army was the most powerful in Latin America. But the army's strength was illusory because it lacked trained leadership, a reliable source of weapons and mat�riel, and adequate reserves. Since the days of El Supremo, the officer corps had been neglected for political reasons. The army suffered from a critical shortage of key personnel, and many of its fighting units were undermanned. Paraguay lacked the industrial base to replace weapons lost in battle, and the Argentine-Brazilian alliance prevented Solano L�pez from receiving arms from abroad. Paraguay's population was only about 450,000 in 1865--a figure lower than the number of people in the Brazilian National Guard--and amounted to less than one-twentieth of the combined allied population of 11 million. Even after conscripting for the front every able-bodied man--including children as young as ten--and forcing women to perform all nonmilitary labor, Solano L�pez still could not field an army as large as those of his rivals.

Apart from some Paraguayan victories on the northern front, the war was a disaster for Solano L�pez. The core units of the Paraguayan army reached Corrientes in April 1865. By July more than half of Paraguay's 30,000-man invasion force had been killed or captured along with the army's best small arms and artillery. The war quickly became a desperate struggle for Paraguay's survival.

Paraguay's soldiers exhibited suicidal bravery, especially considering that Solano L�pez shot or tortured so many of them for the most trivial offenses. Cavalry units operated on foot for lack of horses. Naval infantry battalions armed only with machetes attacked Brazilian ironclads. The suicide attacks resulted in fields of corpses. Cholera was rampant. By 1867 Paraguay had lost 60,000 men to casualties, disease, or capture, and another 60,000 soldiers were called to duty. Solano L�pez conscripted slaves, and infantry units formed entirely of children appeared. Women were forced to perform support work behind the lines. Mat�riel shortages were so severe that Paraguayan troops went into battle seminude, and even colonels went barefoot, according to one observer. The defensive nature of the war, combined with Paraguayan tenacity and ingenuity and the difficulty that Brazilians and Argentinians had cooperating with each other, rendered the conflict a war of attrition. In the end, Paraguay lacked the resources to continue waging war against South America's giants.

As the war neared its inevitable denouement, Solano L�pez's grip on reality--never very strong--loosened further. Imagining himself surrounded by a vast conspiracy, he ordered thousands of executions in the military. In addition, he executed 2 brothers and 2 brothers-in-law, scores of top government and military officials, and about 500 foreigners, including many diplomats. He frequently had his victims killed by lance thrusts to save ammunition. The bodies were dumped into mass graves. His cruel treatment of prisoners was proverbial. Solano L�pez condemned troops to death if they failed to carry out his orders to the minutest detail. "Conquer or die" became the order of the day.

Solano L�pez's hostility even extended to United States Ambassador Charles A. Washburn. Only the timely arrival of the United States gunboat Wasp saved the diplomat from arrest.

Allied troops entered Asunci�n in January 1869, but Solano L�pez held out in the northern jungles for another fourteen months until he finally died in battle. The year 1870 marked the lowest point in Paraguayan history. Hundreds of thousands of Paraguayans had died. Destitute and practically destroyed, Paraguay had to endure a lengthy occupation by foreign troops and cede large patches of territory to Brazil and Argentina.

Despite several historians' accounts of what happened between 1865 and 1870, Solano L�pez was not wholly responsible for the war. Its causes were complex and included Argentine anger over Antonio L�pez's meddling in Corrientes. The elder L�pez also had infuriated the Brazilians by not helping to overthrow Rosas in 1852 and by forcing Brazilian garrisons out of territory claimed by Paraguay in 1850 and 1855. Antonio L�pez also resented having been forced to grant Brazil free navigation rights on the R�o Paraguay in 1858. Argentina meanwhile disputed ownership of the Misiones district between the R�o Paran� and R�o Uruguay, and Brazil had its own ideas about the Brazil-Paraguay boundary. To these problems was added the Uruguayan vortex. Carlos Antonio L�pez had survived mainly with caution and a good bit of luck; Solano L�pez had neither.




The Postwar Period

Ruined by war, pestilence, famine, and foreign indemnities (which were never paid), Paraguay was on the verge of disintegration in 1870. But its fertile soil and the country's overall backwardness probably helped it survive. After the war, Paraguay's mostly rural populace continued to subsist as it had done for centuries, eking out a meager existence in the hinterland under unimaginably difficult conditions. The allied occupation of Asunci�n in 1869 put the victors in direct control of Paraguayan affairs. While Bolivia pressed its nebulous claim to the Chaco, Argentina and Brazil swallowed huge chunks of Paraguayan territory (around 154,000 square kilometers).

Brazil had borne the brunt of the fighting, with perhaps 150,000 dead and 65,000 wounded. It had spent US$200 million, and its troops formed the senior army of occupation in the country, so it was logical that Rio de Janeiro temporarily overshadowed Buenos Aires in Asunci�n. Sharp disagreements between the two powers prolonged the occupation until 1876. Ownership of the Paraguayan economy quickly passed to foreign speculators and adventurers who rushed to take advantage of the rampant chaos and corruption.

The internal political vacuum was at first dominated by survivors of the Paraguayan Legion. This group of exiles, based in Buenos Aires, had regarded Solano L�pez as a mad tyrant and fought for the allies during the war. The group set up a provisional government in 1869 mainly under Brazilian auspices and signed the 1870 peace accords, which guaranteed Paraguay's independence and free river navigation. A constitution was also promulgated in the same year, but it proved ineffective because of the foreign origin of its liberal, democratic tenets. After the last foreign troops had gone in 1876 and an arbitral award to Paraguay of the area between the R�o Verde and R�o Pilcomayo by an international commission headed by Rutherford B. Hayes, United States president, the era of party politics in Paraguay was free to begin in earnest. Nonetheless, the evacuation of foreign forces did not mean the end of foreign influence. Both Brazil and Argentina remained deeply involved in Paraguay because of their connections with Paraguay's rival political forces. These forces eventually came to be known as the Colorados and the Liberals.

The political rivalry between Liberals and Colorados was presaged as early as 1869 when the terms Azules (Blues) and Colorados (Reds) first appeared. The National Republican Association-Colorado Party (Asociaci�n Nacional Republicana-Partido Colorado) dominated Paraguayan political life from the late 1880s until Liberals overthrew it in 1904. The Liberal ascent marked the decline of Brazil, which had supported the Colorados as the principal political force in Paraguay, and the rise of Argentine influence.

In the decade following the war, the principal political conflicts within Paraguay reflected the Liberal-Colorado split, with Legionnaires battling Lopiztas (ex-followers of Solano L�pez) for power, while Brazil and Argentina maneuvered in the background. The Legionnaires saw the Lopiztas as reactionaries. The Lopiztas accused the Legionnaires of being traitors and foreign puppets. The situation defied neat categories, since many people constantly changed sides. Opportunism characterized this era, not ideological purity.

The Legionnaires were a motley collection of refugees and exiles who dated from Francia's day. Their opposition to tyranny was sincere, and they gravitated toward democratic ideologies. Coming home to backward, poor, xenophobic Paraguay from cosmopolitan, prosperous Buenos Aires was a big shock for the Legionnaires. Believing that more freedom would cure Paraguay's ills, they abolished slavery and founded a constitutional government as soon as they came to power. They based the new government on the standard liberal prescriptions of free enterprise, free elections, and free trade.

The Legionnaires, however, had no more experience in democracy than other Paraguayans. The 1870 constitution quickly became irrelevant. Politics degenerated into factionalism, and cronyism and intrigue prevailed. Presidents still acted like dictators, elections did not stay free, and the Legionnaires were out of power in less than a decade.

Free elections were a startling, and not altogether welcome, innovation for ordinary Paraguayans, who had always allied themselves with a patr�n (benefactor) for security and protection. At the same time, Argentina and Brazil were not content to leave Paraguay with a truly free political system. Pro-Argentine militia chief Benigno Ferreira emerged as de facto dictator until his overthrow with Brazilian help in 1874. Ferreira later returned to lead the 1904 Liberal uprising, which ousted the Colorados. Ferreira served as president between 1906 and 1908.


Paraguay - The First Colorado Era


C�ndido Bareiro, L�pez's ex-commercial agent in Europe, returned to Paraguay in 1869 and formed a major Lopizta faction. He also recruited General Bernadino Caballero, a war hero with close ties to L�pez. After President Juan Bautista Gil was assassinated in 1877, Caballero used his power as army commander to guarantee Bareiro's election as president in 1878. When Bareiro died in 1880, Caballero seized power in a coup. Caballero dominated Paraguayan politics for most of the next two decades, either as president or through his power in the militia. His accession to power is notable because he brought political stability, founded a ruling party--the Colorados--to regulate the choice of presidents and the distribution of spoils, and began a process of economic reconstruction.

Despite their professed admiration for Francia, the Colorados dismantled Francia's unique system of state socialism. Desperate for cash because of heavy debts incurred in London in the early postwar period, the Colorados lacked a source of funds except through the sale of the state's vast holdings, which comprised more than 95 percent of Paraguay's total land. Caballero's government sold much of this land to foreigners in huge lots. While Colorado politicians raked in the profits and themselves became large landowners, peasant squatters who had farmed the land for generations were forced to vacate and, in many cases, to emigrate. By 1900 seventy-nine people owned half of the country's land.

Although the Liberals had advocated the same land-sale policy, the unpopularity of the sales and evidence of pervasive government corruption produced a tremendous outcry from the opposition. Liberals became bitter foes of selling land, especially after Caballero blatantly rigged the 1886 election to ensure a victory for General Patricio Escobar. Ex-Legionnaires, idealistic reformers, and former Lopiztas joined in July 1887 to form the Centro Democr�tico (Democratic Center), a precursor of the Liberal party, to demand free elections, an end to land sales, civilian control over the military, and clean government. Caballero responded, along with his principal adviser, Jos� Segundo Decoud, and Escobar, by forming the Colorado Party one month later, thus formalizing the political cleavage.

Both groups were deeply factionalized, however, and very little ideology separated them. Colorado and Liberal partisans changed sides whenever it proved advantageous. While the Colorados reinforced their monopoly on power and spoils, Liberals called for reform. Frustration provoked an aborted Liberal revolt in 1891 that produced changes in 1893, when war minister General Juan B. Egusquiza overthrew Caballero's chosen president, Juan G. Gonz�lez. Egusquiza startled Colorado stalwarts by sharing power with the Liberals, a move that split both parties. Ex-Legionnaire Ferreira, along with the c�vico (civic) wing of the Liberals, joined the government of Egusquiza--who left office in 1898--to allow a civilian, Emilio Aceval, to become president. Liberal radicales (radicals) who opposed compromising with their Colorado enemies boycotted the new arrangement. Caballero, also boycotting the alliance, plotted to overthrow civilian rule and succeeded when Colonel Juan Antonio Ezcurra seized power in 1902. This victory was Caballero's last, however. In 1904, General Ferreira, with the support of c�vicos, radicales, and egusquistas, invaded from Argentina. After four months of fighting, Ezcurra signed the Pact of Pilcomayo aboard an Argentine gunboat on December 12, 1904, and handed power to the Liberals.


Paraguay - Liberal Decades


The revolution of August 1904 began as a popular movement, but Liberal rule quickly degenerated into factional feuding, military coups, and civil war. Political instability was extreme in the Liberal era, which saw twenty-one governments in thirty-six years. During the period 1904 to 1922, Paraguay had fifteen presidents. By 1908 the radicales had overthrown General Ferreira and the c�vicos. The Liberals had disbanded Caballero's army when they came to power and organized a completely new one. Nevertheless, by 1910 army commander Colonel Albino Jara felt strong enough to stage a coup against President Manuel Gondra. Jara's coup backfired as it touched off an anarchic two-year period in which every major political group seized power at least once. The radicales again invaded from Argentina, and when the charismatic Eduardo Schaerer became president, Gondra returned as minister of war to reorganize the army once more. Schaerer became the first president since Egusquiza to finish his four-year term.

The new political calm was shattered, however, when the radicales split into Schaerer and Gondra factions. Gondra won the presidential election in 1920, but the schaereristas successfully undermined him and forced him to resign. Full-scale fighting between the factions broke out in May 1922 and lasted for fourteen months. The gondristas beat the schaereristas decisively and held on to power until 1936.

Laissez-faire Liberal policies had permitted a handful of hacendados to exercise almost feudal control over the countryside, while peasants had no land and foreign interests manipulated Paraguay's economic fortunes. The Liberals, like the Colorados, were a deeply factionalized political oligarchy. Social conditions- -always marginal in Paraguay -- deteriorated during the Great Depression of the 1930s. The country clearly needed reforms in working conditions, public services, and education. The stage was set for an anti-Liberal nationalist reaction that would change the direction of Paraguayan history.

Paraguay's dispute with Bolivia over the Chaco, a struggle that had been brewing for decades, finally derailed the Liberals. Wars and poor diplomacy had prevented the settling of boundaries between the two countries during the century following independence. Although Paraguay had held the Chaco for as long as anyone could remember, the country did little to develop the area. Aside from scattered Mennonite colonies and nomadic Indian tribes, few people lived there. Bolivia's claim to the Chaco became more urgent after it lost its seacoast to Chile during the 1879-84 War of the Pacific. Left without any outlet to the sea, Bolivia wanted to absorb the Chaco and expand its territory up to the R�o Paraguay in order to gain a river port. In addition, the Chaco's economic potential intrigued the Bolivians. Oil had been discovered there by Standard Oil Company in the 1920s, and people wondered whether an immense pool of oil was lying beneath the entire area. Ironically, South America's two greatest victims of war and annexation in the previous century were ready to face each other in another bout of bloody combat, this time over a piece of apparently desolate wilderness.

While Paraguayans were busy fighting among themselves during the 1920s, Bolivians established a series of forts in the Paraguayan Chaco. In addition, they bought armaments from Germany and hired German military officers to train and lead their forces. Frustration in Paraguay with Liberal inaction boiled over in 1928 when the Bolivian army established a fort on the R�o Paraguay called Fort�n Vanguardia. In December of that year, Paraguayan major (later colonel) Rafael Franco took matters into his own hands, led a surprise attack on the fort, and succeeded in destroying it. The routed Bolivians responded quickly by seizing two Paraguayan forts. Both sides mobilized but the Liberal government felt unprepared for war so it agreed to the humiliating condition of rebuilding Fort�n Vanguardia for the Bolivians. The Liberal government also provoked criticism when it forced Franco, by then a national hero, to retire from the army.

As diplomats from Argentina, the United States, and the League of Nations conducted fruitless "reconciliation" talks, Colonel Jos� F�lix Estigarribia, Paraguay's deputy army commander, ordered his troops into action against Bolivian positions early in 1931. Meanwhile, nationalist agitation led by the National Independent League (Liga Nacional Independiente) increased. Formed in 1928 by a group of intellectuals, the League sought a new era in national life that would witness a great political and social rebirth. Its adherents advocated a "new democracy" that might sweep the country free of petty partisan interests and foreign encroachments. An amalgam of diverse ideologies and interests, the League reflected a genuine popular wish for social change. When government troops in October 1931 fired on a mob of League students demonstrating in front of the Government Palace, the Liberal administration of President Jos� Guggiari lost what little legitimacy it retained. The students and soldiers of the rising "New Paraguay" movement (which wanted to sweep away corrupt party politics and introduce nationalist and socialist reforms) would thereafter always see the Liberals as morally bankrupt.


Paraguay - The Chaco War and the February Revolution


When war finally broke out officially in July 1932, the Bolivians were confident of a rapid victory. Their country was richer and more populous than Paraguay, and their armed forces were larger, had a superior officer corps, and were well-trained and well-equipped. These advantages quickly proved irrelevant in the face of the Paraguayans' zeal to defend their homeland. The highly motivated Paraguayans knew the geography of the Chaco better than the Bolivians and easily infiltrated Bolivian lines, surrounded outposts, and captured supplies. In contrast, Indians from the Bolivian high plateau area, known as the Altiplano, were forced into the Bolivian army, had no real interest in the war, and failed to adapt to the hot Chaco climate. In addition, long supply lines, poor roads, and weak logistics hindered the Bolivian campaign. The Paraguayans proved more united than the Bolivians--at least initially--as President Eusebio Ayala and Colonel (later Marshal) Estigarribia worked well together.

After the December 1933 Paraguayan victory at Campo Via, Bolivia seemed on the verge of surrendering. At that moment, however, President Ayala agreed to a truce. His decision was greeted with derision in Asunci�n. Instead of ending the war with a swift victory that might have boosted their political prospects, the Liberals signed a truce that seemed to allow the Bolivians to regroup. The war continued until July 1935. Although the Liberals had successfully led Paraguay's occupation of nearly all the disputed territory and had won the war when the last truce went into effect, they were finished politically.

In many ways, the Chaco War acted as a catalyst to unite the political opposition with workers and peasants, who furnished the raw materials for a social revolution. After the 1935 truce, thousands of soldiers were sent home, leaving the regular army to patrol the front lines. The soldiers who had shared the dangers and trials of the battlefield deeply resented the ineptitude and incompetence they believed the Liberals had shown in failing to prepare the country for war. These soldiers had witnessed the miserable state of the Paraguayan army and were forced in many cases to face the enemy armed only with machetes. After what they had been through, partisan political differences seemed irrelevant. The government offended the army rank-and-file by refusing to fund pensions for disabled war veterans in 1936 while awarding 1,500 gold pesos a year to Estigarribia. Colonel Franco, back on active duty since 1932, became the focus of the nationalist rebels inside and outside the army. The final spark to rebellion came when Franco was exiled for criticizing Ayala. On February 17, 1936, units of the army descended on the Presidential Palace and forced Ayala to resign, ending thirty-two years of Liberal rule.

Outside Paraguay, the February revolt seemed to be a paradox because it overthrew the politicians who had won the war. The soldiers, veterans, students, and others who revolted felt, however, that victory had come despite the Liberal government. Promising a national and social revolution, the Febrerista Revolutionary Party (Partido Revolucionario Febrerista--PRF)--more commonly known as the Febreristas--brought Colonel Franco back from exile in Argentina to be president. The Franco government showed it was serious about social justice by expropriating more than 200,000 hectares of land and distributing it to 10,000 peasant families. In addition, the new government guaranteed workers the right to strike and established an eight-hour work day. Perhaps the government's most lasting contribution affected national consciousness. In a gesture calculated to rewrite history and erase seven decades of national shame, Franco declared Solano L�pez a national hero sin ejemplar (without precedent) because he had stood up to foreign threats and sent a team to Cerro Cor� to find his unmarked grave. The government interred his remains along with those of his father in a chapel designated the National Pantheon of Heroes, and later erected a monument to him on Asunci�n's highest hill.

Despite the popular enthusiasm that greeted the February revolution, the new government lacked a clear program. A sign of the times, Franco practiced his Mussolini-style, spellbinding oratory from a balcony. But when he published his distinctly fascist-sounding Decree Law No. 152 promising a "totalitarian transformation" similar to those in Europe, protests erupted. The youthful, idealistic elements that had come together to produce the Febrerista movement were actually a hodgepodge of conflicting political tendencies and social opposites, and Franco was soon in deep political trouble. Franco's cabinet reflected almost every conceivable shade of dissident political opinion, and included socialists, fascist sympathizers, nationalists, Colorados, and Liberal c�vicos. A new party of regime supporters, the Revolutionary National Union (Uni�n Nacional Revolucionaria), was founded in November 1936. Although the new party called for representative democracy, rights for peasants and workers, and socialization of key industries, it failed to broaden Franco's political base. In the end, Franco forfeited his popular support because he failed to keep his promises to the poor. He dared not expropriate the properties of foreign landowners, who were mostly Argentines. In addition, the Liberals, who still had influential support in the army, agitated constantly for Franco's overthrow. When Franco ordered Paraguayan troops to abandon the advanced positions in the Chaco that they had held since the 1935 truce, the army revolted in August 1937 and returned the Liberals to power.

The army, however, did not hold a unified opinion about the Febreristas. Several attempted coups served to remind President F�lix Pavia (the former dean of law at the National University) that although the February Revolution was out of power, it was far from dead. People who suspected that the Liberals had learned nothing from their term out of office soon had proof: a peace treaty signed with Bolivia on July 21, 1938, fixed the final boundaries behind the Paraguayan battle lines. In 1939 the Liberals, recognizing that they would have to choose someone with national stature to be president if they wanted to hold onto power, picked General Estigarribia, the hero of the Chaco War who had since served as special envoy to the United States. Estigarribia quickly realized that he would have to adopt many Febrerista ideas to avoid anarchy. Circumventing the die-hard Liberals in the National Assembly who opposed him, Estigarribia assumed "temporary" dictatorial powers in February 1940, but promised the dictatorship would end as soon as a workable constitution was written.

Estigarribia vigorously pursued his goals. He began a land reform program that promised a small plot to every Paraguayan family. He reopened the university, balanced the budget, financed the public debt, increased the capital of the Central Bank, implemented monetary and municipal reforms, and drew up plans to build highways and public works. An August 1940 plebiscite endorsed Estigarribia's constitution, which remained in force until 1967. The constitution of 1940 promised a "strong, but not despotic" president and a new state empowered to deal directly with social and economic problems. But by greatly expanding the power of the executive branch, the constitution served to legitimize open dictatorship.


Paraguay - Mor�nigo and World War II


The era of the New Liberals, as Estigarribia's supporters were called, came to a sudden end in September 1940, when the president died in an airplane crash. Hoping to control the government through a more malleable military man, the "Old Liberal" cabinet named War Minister Higinio Mor�nigo president. Mor�nigo had gained fame in Paraguay by heading the 1936 expedition to Cerro Cor� to retrieve L�pez's remains. The apparently genial Mor�nigo soon proved himself a shrewd politician with a mind of his own, and the Liberals resigned within a few weeks when they realized that they would not be able to impose their will on him. Having inherited Estigarribia's dictatorial powers, Mor�nigo quickly banned both Febreristas and Liberals and clamped down drastically on free speech and individual liberties. A nonparty dictator without a large body of supporters, Mor�nigo survived politically--despite the numerous plots against him--because of his astute handling of an influential group of young military officers who held key positions of power.

The outbreak of World War II eased Mor�nigo's task of ruling Paraguay and keeping the army happy because it stimulated demand for Paraguayan export products--such as meat, hides, and cotton-- and boosted the country's export earnings. More important, United States policy toward Latin America at this time made Paraguay eligible for major economic assistance. A surge of German influence in the region and Argentina's pro-Axis leanings alarmed the United States, which sought to wean Paraguay away from German and Argentine solicitation. At the same time, the United States sought to enhance its presence in the region and pursued close cooperation with Brazil, Argentina's traditional rival. To this end, the United States provided to Paraguay sizable amounts of funds and supplies under the Lend-Lease Agreement, provided loans for public works, and gave technical assistance in agriculture and health care. The United States Department of State approved of closer ties between Brazil and Paraguay and especially supported Brazil's offer to finance a road project designed to reduce Paraguay's dependence on Argentina.

Much to the displeasure of the United States and Britain, Mor�nigo refused to act against German economic and diplomatic interests until the end of the war. German agents had successfully converted many Paraguayans to the Axis cause. South America's first Nazi Party branch had been founded in Paraguay in 1931. German immigrant schools, churches, hospitals, farmers' cooperatives, youth groups, and charitable societies became active Axis backers. All of those organizations prominently displayed swastikas and portraits of Adolf Hitler.

It is no exaggeration to say that Mor�nigo headed a pro-Axis regime. Large numbers of Paraguayan military officers and government officials were openly sympathetic to the Axis. Among these officials was the national police chief, who named his son Adolfo Hirohito after the leading Axis personalities. By 1941 the official newspaper, El Pa�s, had adopted an overtly proGerman stance. At the same time, the government strictly controlled pro-Allied labor unions. Police cadets wore swastikas and Italian insignia on their uniforms. The December 1941 Japanese attack on Pearl Harbor and Germany's declaration of war against the United States gave the United States the leverage it needed, however, to force Mor�nigo to commit himself publicly to the Allied cause. Mor�nigo officially severed diplomatic relations with the Axis countries in 1942, although he did not declare war against Germany until February 1945. Nonetheless, Mor�nigo continued to maintain close relations with the heavily German-influenced Argentine military throughout the war and provided a haven for Axis spies and agents.

United States protests over German and Argentine activities in Paraguay fell on deaf ears. While the United States defined its interests in terms of resisting the fascist threat, Paraguayan officials believed their interests lay in economic expediency and were reluctant to antagonize Germany until the outcome of the war was no longer in doubt. Many Paraguayans believed Germany was no more of a threat to Paraguay's sovereignty than the United States.

The Allied victory convinced Mor�nigo to liberalize his regime. Paraguay experienced a brief democratic opening as Mor�nigo relaxed restrictions on free speech, allowed political exiles to return, and formed a coalition government. Mor�nigo's intentions about stepping down were murky, however, and his de facto alliance with Colorado Party hardliners and their thuggish Gui�n Rojo (red script) paramilitary group antagonized the opposition. The result was a failed coup d'�tat in December 1946 and full-scale civil war in March 1947.

Led by Colonel Rafael Franco, the revolutionaries were an unlikely coalition of Febreristas, Liberals, and communists, united only in their desire to overthrow Mor�nigo. The Colorados helped Mor�nigo crush the insurgency, but the man who saved Mor�nigo's government during crucial battles was the commander of the General Br�gez Artillery Regiment, Lieutenant Colonel Alfredo Stroessner Mattiauda. When a revolt at the Asunci�n Navy Yard put a strategic working-class neighborhood in rebel hands, Stroessner's regiment quickly reduced the area to rubble. When rebel gunboats threatened to dash upriver from Argentina to bombard the capital into submission, Stroessner's forces battled furiously and knocked them out of commission.

By the end of the rebellion in August, a single party--one that had been out of power since 1904--had almost total control in Paraguay. The fighting had simplified politics by eliminating all parties except the Colorados and by reducing the size of the army. Because nearly four-fifths of the officer corps had joined the rebels, fewer individuals were now in a position to compete for power. As had often happened in the past, however, the Colorados split into rival factions. The hardline guionistas, headed by the fiery left-leaning nationalist writer and publisher Natal�cio Gonz�lez, opposed democratic practices. The moderate democr�ticos, led by Federico Chaves, favored free elections and a power-sharing arrangement with the other parties. With Mor�nigo's backing, Gonz�lez used the Gui�n Rojo to cow the moderates and gain his party's presidential nomination. In the Paraguayan tradition, he ran unopposed in the long-promised 1948 elections. Suspecting that Mor�nigo would not relinquish power to Gonz�lez, a group of Colorado military officers, including Stroessner, removed Mor�nigo from office. Gonz�lez joined Mor�nigo in exile early in 1949, and Chaves became president in 1950 as the military finally allowed power to pass to the democr�ticos.

Paraguayan politics had come full-circle in a certain sense. The Chaco War had sparked the February revolution, which, in turn, sounded the death knell of the Liberal state and ushered in a revival of Paraguayan nationalism along with a reverence for the dictatorial past. The result was the constitution of 1940, which returned to the executive the power that the Liberals had stripped away. When a brief flirtation with democracy became a civil war after World War II, the Colorados, the party of the Lopiztas, were again running Paraguay. In the interim, the influence of the armed forces had increased dramatically. Since the end of the Chaco War, no Paraguayan government has held power without the consent of the army. Mor�nigo maintained order by severely restricting individual liberties but created a political vacuum. When he tried to fill it with the Colorado Party, he split the party in two, and neither faction could establish itself in power without help from the military. The institution of one-party rule, the establishment of order at the expense of political liberty, and the acceptance of the army's role of final political arbiter created the conditions that encouraged the emergence of the Stroessner regime.




The 1954 Coup

Despite his reputation as a democrat, Chaves imposed a state of siege three weeks after he took office, aiming his emergency powers at the supporters of Gonz�lez and ex-President Felipe Molas L�pez. Mounting economic problems immediately confronted the new government. Two decades of extreme political and social unrest-- including depression, war, and civil conflicts--had shattered Paraguay's economy. National and per capita income had fallen sharply, the Central Bank's practice of handing out soft loans to regime cronies was spurring inflation and a black market, and Argentina's economic woes were making themselves felt in Paraguay. Still, Chaves stayed in office without mishap; the country simply needed a rest.

By 1953, however, the seventy-three-year-old president's political support began to erode markedly. His decision to run for reelection disappointed younger men who nursed political ambitions, and rumors that Chaves would strengthen the police at the army's expense disappointed the military. Early in 1954, recently fired Central Bank Director Epifanio M�ndez Fleitas joined forces with Stroessner--at that time a general and commander in chief of the armed forces--to oust Chaves. M�ndez Fleitas was unpopular with Colorado Party stalwarts and the army, who feared that he was trying to build a following as did his hero, Juan Domingo Per�n, Argentina's president from 1946 to 1955. In May 1954, Stroessner ordered his troops into action against the government after Chaves had tried to dismiss one of his subordinates. Fierce resistance by police left almost fifty dead.

As the military "strongman" who made the coup, Stroessner was able to provide many of his supporters with positions in the provisional government. About two months later, a divided Colorado Party nominated Stroessner for president. For many party members, he represented an "interim" choice, as Mor�nigo had been for the Liberals in 1940. When Stroessner took office on August 15, 1954, few people imagined that this circumspect, unassuming forty-one- year-old commander in chief would be a master politician capable of outmaneuvering and outlasting them all. Nor was it apparent that his period of rule, known as the Stronato, would be longer than that of any other ruler in Paraguayan history.


Paraguay - The Stroessner Regime


The son of an immigrant German brewer and a Paraguayan woman, Stroessner was born in Encarnaci�n in 1912. He joined the army when he was sixteen and entered the triservice military academy, the Francisco L�pez Military College. Like Franco and Estigarribia, Stroessner was a hero of the Chaco War. He had gained a reputation for his bravery and his abilities to learn quickly and to command and inspire loyalty in troops. He was also known to be thorough and to have an unusual capacity for hard work. His extremely accurate political sense failed him only once, when he found himself in 1948 on the wrong side of a failed coup attempt and had to be driven to the Brazilian embassy in the trunk of a car, earning him the nickname "Colonel Trunk." Career considerations and an antipathy for communists possibly caused Stroessner to decide against joining the rebels in 1947. Mor�nigo found his talents indispensable during the civil war and promoted him rapidly. Because he was one of the few officers who had remained loyal to Mor�nigo, Stroessner became a formidable player once he entered the higher echelons of the armed forces.

Repression was a key factor in Stroessner's longevity. Stroessner took a hard line from the beginning in his declaration of a state of siege, which he renewed carefully at intervals prescribed by the constitution. Except for a brief period in 1959, Stroessner renewed the state of siege every three months for the interior of the country until 1970 and for Asunci�n until 1987. He was lucky from the outset; the retirement of Gonz�lez and the death of Molas L�pez had removed two of his most formidable opponents. Another helpful coincidence was the September 1955 Argentine coup that deposed Per�n, thus depriving M�ndez Fleitas of his main potential source of support. After the coup, Per�n fled to Asunci�n, where his meddling in Paraguayan politics complicated M�ndez Fleitas's position further and intensified the political struggle going on behind the scenes. Forced to play his hand after the Argentine junta compelled Per�n to depart Asunci�n for Panama in November, M�ndez Fleitas prepared to stage a coup in late December. However, Stroessner purged the military of M�ndez Fleitas's supporters and made him go into exile in 1956.

To observers, Stroessner did not seem to be in a particularly strong position. He was hardly in control of the Colorado Party, which was full of competing factions and ambitious politicians, and the army was not a dependable supporter. The economy was in bad shape and deteriorating further. Stroessner's adoption of economic austerity measures proved unpopular with military officers, who had grown used to getting soft loans from the Central Bank; with businessmen, who disliked the severe tightening of credit; and with workers, who went out on strike when they no longer received pay raises. In addition, the new Argentine government, displeased with Stroessner's cordial relations with Per�n, canceled a trade agreement.

A 1958 national plebiscite elected Stroessner to a second term, but dissatisfaction with the regime blossomed into a guerrilla insurgency soon afterward. Sponsored by exiled Liberals and Febreristas, small bands of armed men began to slip across the border from Argentina. Venezuela sent large amounts of aid to these groups starting in 1958. The following year, the new Cuban government under Fidel Castro Ruz also provided assistance.

Stroessner's response was to employ the state's virtually unlimited power by giving a free hand to the military and to Minister of Interior Edgar Ynsfr�n, who began to harass, terrorize, and occasionally murder family members of the regime's foes. A cycle of terror and counter-terror began to make life in Paraguay precarious.

The guerrillas received little support from Paraguay's conservative peasantry. The Colorado Party's peasant py nand� irregulars ("barefoot ones" in Guaran�), who had a welldeserved reputation for ferocity, often tortured and executed their prisoners. Growing numbers of people were interned in jungle concentration camps. Army troops and police smashed striking labor unions by taking over their organizations and arresting their leaders.

In April 1959, however, Stroessner grudgingly decided to heed the growing call for reform within the army and the Colorado Party. He lifted the state of siege, allowed opposition exiles to return, ended press censorship, freed political prisoners, and promised to rewrite the 1940 constitution. After two months of this democratic "spring," the country was on the verge of chaos. In late May, nearly 100 people were injured when a student riot erupted in downtown Asunci�n over a bus fare increase. The disturbance inspired the legislature to call for Ynsfr�n's resignation. Stroessner responded swiftly by reimposing the state of siege and dissolving the legislature.

An upsurge in guerrilla violence followed, but Stroessner once again parried the blow. Several factors strengthened Stroessner's hand. First, United States military aid was helping enhance the army's skills in counterinsurgency warfare. Second, the many purges of the Colorado Party had removed all opposition factions. In addition, Stroessner's economic policies had boosted exports and investment and reduced inflation, and the right-wing military coups in Brazil in 1964 and Argentina in 1966 also improved the international climate for nondemocratic rule in Paraguay.

Another major factor in Stroessner's favor was a change in attitude among his domestic opposition. Demoralized by years of fruitless struggle and exile, the major opposition groups began to sue for peace. A Liberal Party faction, the Renovation Movement, returned to Paraguay to become the "official" opposition, leaving the remainder of the Liberal Party, which renamed itself the Radical Liberal Party (Partido Liberal Radical--PLR), in exile. In return for Renovationist participation in the elections of 1963, Stroessner allotted the new party twenty of Congress's sixty seats. Four years later, PLR members also returned to Paraguay and began participating in the electoral process. By this time, the Febreristas, a sad remnant of the once powerful but never terribly coherent revolutionary coalition, posed no threat to Stroessner and were legalized in 1964. The new Christian Democratic Party (Partido Dem�crata Cristiano--PDC) also renounced violence as a means of gaining power. The exhaustion of most opposition forces enabled Stroessner to crush the Paraguayan Communist Party (Partido Communista Paraguayo--PCP) by mercilessly persecuting its members and their spouses and to isolate the exiled Colorado epifanistas (followers of Epifanio M�ndez Fleitas) and democr�ticos, who had reorganized themselves as the Popular Colorado Movement (Movimiento Popular Colorado--Mopoco).

Under "liberalization," Ynsfr�n, the master of the machinery of terror, began to outlive his usefulness to Stroessner. Ynsfr�n opposed political decompression and was unhappy about Stroessner's increasingly clear intention to stay president for life. A May 1966 police corruption scandal gave Stroessner a convenient way to dismiss Ynsfr�n in November. In August 1967, a new Constitution created a two-house legislature and formally allowed Stroessner to serve for two more five-year presidential terms.


Paraguay - International Factors and the Economy


During the 1960s and 1970s, the main foreign influences on Paraguay were Brazil and the United States. Both countries aided Paraguay's economic development in ways that enhanced its political stability. A 1956 agreement with Brazil to improve the transport link between the two countries by building roads and a bridge over the R�o Paran� broke Paraguay's traditional dependence on Argentine goodwill for the smooth flow of Paraguayan international trade. Brazil's grant of duty-free port facilities on the Atlantic Coast was particularly valuable to Paraguay.

Brazil's financing of the US$19 billion Itaip� Dam on the R�o Paran� between Paraguay and Brazil had far-reaching consequences for Paraguay. Paraguay had no means of contributing financially to the construction, but its cooperation--including controversial concessions regarding ownership of the construction site and the rates for which Paraguay agreed to sell its share of the electricity--was essential. Itaip� gave Paraguay's economy a great new source of wealth. The construction produced a tremendous economic boom, as thousands of Paraguayans who had never before held a regular job went to work on the enormous dam. From 1973 (when construction began) until 1982 (when it ended), gross domestic product (GDP) grew more than 8 percent annually, double the rate for the previous decade and higher than growth rates in most other Latin American countries. Foreign exchange earnings from electricity sales to Brazil soared, and the newly employed Paraguayan workforce stimulated domestic demand, bringing about a rapid expansion in the agricultural sector.

There were, however, several drawbacks to the construction at Itaip�. The prosperity associated with the major boom raised expectations for long-term growth. An economic downturn in the early 1980s caused discontent, which in turn led to demands for reform. Many Paraguayans, no longer content to eke out a living on a few hectares, had to leave the country to look for work. In the early 1980s, some observers estimated that up to 60 percent of Paraguayans were living outside the country. But even those people who were willing to farm a small patch of ground faced a new threat. Itaip� had prompted a tidal wave of Brazilian migration in the eastern border region of Paraguay. By the mid-1980s, observers estimated there were between 300,000 and 350,000 Brazilians in the eastern border region. With Portuguese the dominant language in the areas of heavy Brazilian migration and Brazilian currency circulating as legal tender, the area became closely integrated with Brazil. Further, most of Paraguay's increased wealth wound up in the hands of wealthy supporters of the regime. Landowners faced no meaningful land reform, the regime's control of labor organizers aided businessmen, foreign investors benefited from tax exemptions, and foreign creditors experienced a bonanza from heavy Paraguayan borrowing. Although the poorest Paraguayans were somewhat better off in 1982 than they were in the 1960s, they were worse off relative to other sectors of the population.

Closer relations with Brazil paralleled a decline in relations with Argentina. After Per�n's expulsion, Paraguay slipped from the orbit of Buenos Aires as Argentina declined politically and economically. Argentina, alarmed by Itaip� and close cooperation between Brazil and Paraguay, pressed Stroessner to agree to participate in hydroelectric projects at Yacyret� and Corpus. By pitting Argentina against Brazil, Stroessner improved Paraguay's diplomatic and economic autonomy and its economic prospects.

Stroessner also benefited from the 1950s and 1960s Cold War ideology in the United States, which favored authoritarian, anticommunist regimes. Upon reaching Asunci�n during his 1958 tour of Latin America, Vice President Richard M. Nixon praised Stroessner's Paraguay for opposing communism more strongly than any other nation in the world. The main strategic concern of the United States at that time was to avoid at all costs the emergence in Paraguay of a left-wing regime, which would be ideally situated at the heart of the South American continent to provide a haven for radicals and a base for revolutionary activities around the hemisphere. From 1947 until 1977, the United States supplied about US$750,000 worth of military hardware each year and trained more than 2,000 Paraguayan military officers in counterintelligence and counterinsurgency. In 1977 the United States Congress sharply cut military assistance to Paraguay.

Paraguay regularly voted in favor of United States policies in the United Nations (UN) and the Organization of American States (OAS). Stroessner, probably the United States' most dependable ally in Latin America, once remarked that the United States ambassador was like an extra member of his cabinet. Relations faltered somewhat during the administration of President John F. Kennedy, as United States officials began calling for democracy and land reform and threatened to withhold Alliance for Progress funds (an amount equal to about 40 percent of Paraguay's budget) unless Paraguay made progress. Although pressure of this sort no doubt encouraged Stroessner to legalize some internal opposition parties, it failed to make the Paraguayan ruler become any less a personalist dictator. Regime opponents who agreed to play Stroessner's electoral charade received rewards of privileges and official recognition. Other opponents, however, faced detention and exile. Influenced by Paraguay's support for the United States intervention in the Dominican Republic in 1965, the United States became friendlier to Stroessner in the mid-1960s under President Lyndon B. Johnson. New United States-supported military governments in Brazil and Argentina also improved United States-Paraguay ties.

Relations between Paraguay and the United States changed substantially after the election of President Jimmy Carter in 1976. The appointment of Robert White as United States ambassador in 1977 and the congressional cut-off of military hardware deliveries in the same year reflected increasing concern about the absence of democracy and the presence of human rights violations in Paraguay.


Paraguay - Toward the 1980s


After a period of inactivity, the political opposition became increasingly visible in the late 1970s. In 1977 Domingo La�no, a PLR congressman during the previous ten years, broke away to form the Authentic Radical Liberal Party (Partido Liberal Radical Aut�ntico--PLRA). La�no's charges of government corruption, involvement in narcotics trafficking, human rights violations, and inadequate financial compensation from Brazil under the terms of the Treaty of Itaip� earned him Stroessner's wrath. In 1979 La�no helped lead the PLRA, the PDC, Mopoco, and the legally recognized Febreristas--the latter angered by the constitutional amendment allowing Stroessner to seek yet another presidential term in 1978-- into the National Accord (Acuerdo Nacional). The National Accord served to coordinate the opposition's political strategy.The victim of countless detentions, torture, and persecution, La�no was forced into exile in 1982 following the publication of a critical book about ex-Nicaraguan dictator Anastasio Somoza Debayle, who was assassinated in Asunci�n in 1980.

Beginning in the late 1960s, the Roman Catholic Church persistently criticized Stroessner's successive extensions of his stay in office and his treatment of political prisoners. The regime responded by closing Roman Catholic publications and newspapers, expelling non-Paraguayan priests, and harassing the church's attempts to organize the rural poor.

The regime also increasingly came under international fire in the 1970s for human rights abuses, including allegations of torture and murder. In 1978 the Inter-American Commission on Human Rights convinced an annual meeting of foreign ministers at the OAS to pass a resolution calling on Paraguay to improve its human rights situation. In 1980 the Ninth OAS General Assembly, meeting in La Paz, Bolivia, condemned human rights violations in Paraguay, describing torture and disappearances as "an affront to the hemisphere's conscience." International groups also charged that the military had killed 30 peasants and arrested 300 others after the peasants had protested against encroachments on their land by government officials.

Paraguay entered the 1980s less isolated, rural, and backward than it had traditionally been. Political and social structures remained inflexible, but Paraguayans had changed their world views and their perceptions of themselves.

By skillfully balancing the military and the Colorado Party, Stroessner remained very much in control. Still, he was increasingly being challenged in ways that showed that his control was not complete. For example, in November 1974, police units captured seven guerrillas in a farmhouse outside of Asunci�n. When the prisoners were interrogated, it became clear that the information possessed by the guerrillas, who had planned to assassinate Stroessner, could have come only from a high Colorado official. With the party hierarchy suddenly under suspicion, Stroessner ordered the arrest and interrogation of over 1,000 senior officials and party members.He also dispatched agents to Argentina and Brazil to kidnap suspects among the exiled Colorados. A massive purge of the party followed. Although the system survived, it was shaken.

Perhaps the clearest example of cracks in Stroessner's regime was the assassination of Somoza. From Stroessner's standpoint, there were ominous similarities between Somoza and himself. Like Stroessner, Somoza had run a regime based on the military and a political party that had been noted for its stability and its apparent imperviousness to change. Somoza also had brought economic progress to the country and had skillfully kept his internal opposition divided for years. Ultimately, however, the carefully controlled changes he had introduced began subtly to undermine the traditional, authoritarian order. As traditional society broke down in Paraguay, observers saw increasing challenges ahead for the Stroessner regime.


Paraguay - Geography


Although landlocked, Paraguay is bordered and criss-crossed by navigable rivers. The R�o Paraguay divides the country into strikingly different eastern and western regions. Both the eastern region--officially called Eastern Paraguay (Paraguay Oriental) and known as the Parane�a region--and the western region--officially Western Paraguay (Paraguay Occidental) and known as the Chaco-- gently slope toward and are drained into the R�o Paraguay, which thus not only separates the two regions but unifies them. With the Parane�a region reaching southward and the Chaco extending to the north, Paraguay straddles the Tropic of Capricorn and experiences both subtropical and tropical climates.

External Boundaries

Paraguay is bounded by three substantially larger countries: Bolivia, Argentina, and Brazil. The northwestern boundary with Bolivia, extending through the low hills of the Chaco region, was set in 1938. The boundary between the Chaco and Brazil was defined in 1927; it continues from the confluence of the R�o Apa and R�o Paraguay northward along the course of the R�o Paraguay to the border with Bolivia. The northern border of the Parane�a region, set in 1872, follows the course of the R�o Paran�, the ridges of the mountains in the northeast region, and finally the course of the R�o Apa until it empties into the R�o Paraguay. Paraguay's southern border with Argentina is formed by the R�o Pilcomayo, R�o Paraguay, and R�o Paran�. These boundaries were agreed to in 1876.

<> Natural Regions
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Paraguay - Geography - Natural Regions


The two main natural regions in Paraguay are the Parane�a region--a mixture of plateaus, rolling hills, and valleys--and the Chaco region--an immense piedmont plain. About 95 percent of Paraguay's population resides in the Parane�a region, which has all the significant orographic features and the more predictable climate. The Parane�a region can be generally described as consisting of an area of highlands in the east that slopes toward the R�o Paraguay and becomes an area of lowlands, subject to floods, along the river. The Chaco is predominantly lowlands, also inclined toward the R�o Paraguay, that are alternately flooded and parched.

The Parane�a Region

The Parane�a region extends from the R�o Paraguay eastward to the R�o Paran�, which forms the border with Brazil and Argentina. The eastern hills and mountains, an extension of a plateau in southern Brazil, dominate the region, whose highest point is about 700 meters above sea level. The Parane�a region also has spacious plains, broad valleys, and lowlands. About 80 percent of the region is below 300 meters in elevation; the lowest elevation, 55 meters, is found in the extreme south at the confluence of the R�o Paraguay and R�o Paran�.

The Parane�a region is drained primarily by rivers that flow westward to the R�o Paraguay, although some rivers flow eastward to the R�o Paran�. Low-lying meadows, subject to floods, separate the eastern mountains from the R�o Paraguay.

The Parane�a region as a whole naturally divides into five physiographic subregions: the Paran� Plateau, the Northern Upland, the Central Hill Belt, the Central Lowland, and the �eembuc� Plain. In the east, the heavily wooded Paran� Plateau occupies one-third of the region and extends its full length from north to south and up to 145 kilometers westward from the Brazilian and Argentine borders. The Paran� Plateau's western edge is defined by an escarpment that descends from an elevation of about 460 meters in the north to about 180 meters at the subregion's southern extremity. The plateau slopes moderately to east and south, its remarkably uniform surface interrupted only by the narrow valleys carved by the westward-flowing tributaries of the R�o Paran�.

The Northern Upland, the Central Hill Belt, and the Central Lowland constitute the lower terrain lying between the escarpment and the R�o Paraguay. The first of these eroded extensions stretching westward of the Paran� Plateau--the Northern Upland-- occupies the portion northward from the R�o Aquidab�n to the R�o Apa on the Brazilian border. For the most part it consists of a rolling plateau about 180 meters above sea level and 76 to 90 meters above the plain farther to the south. The Central Hill Belt encompasses the area in the vicinity of Asunci�n. Although nearly flat surfaces are not lacking in this subregion, the rolling terrain is extremely uneven. Small, isolated peaks are numerous, and it is here that the only lakes of any size are found. Between these two upland subregions is the Central Lowland, an area of low elevation and relief, sloping gently upward from the R�o Paraguay toward the Paran� Plateau. The valleys of the Central Lowland's westward-flowing rivers are broad and shallow, and periodic flooding of their courses creates seasonal swamps. This subregion's most conspicuous features are its flat-topped hills, which project six to nine meters from the grassy plain. Thickly forested, these hills cover areas ranging from a hectare to several square kilometers. Apparently the weathered remnants of rock related to geological formations farther to the east, these hills are called islas de monte (mountain islands), and their margins are known as costas (coasts).

The remaining subregion--the �eembuc� Plain--is in the southwest corner of the Parane�a region. This alluvial flatland has a slight westerly-southwesterly slope obscured by gentle undulations. The R�o Tebicuary--a major tributary of the R�o Paraguay -- bisects the swampy lowland, which is broken in its central portion by rounded swells of land up to three meters in height.

The main orographic features of the Parane�a region include the Cordillera de Amambay, the Cordillera de Mbaracay�, and the Cordillera de Caaguaz�. The Cordillera de Amambay extends from the northeast corner of the region south and slightly east along the Brazilian border. The average height of the mountains is 400 meters above sea level, although the highest point reaches 700 meters. The main chain is 200 kilometers long and has smaller branches that extend to the west and die out along the banks of the R�o Paraguay in the Northern Upland.

The Cordillera de Amambay merges with the Cordillera de Mbaracay�, which reaches eastward 120 kilometers to the R�o Paran�. The average height of this mountain chain is 200 meters; the highest point of the chain, 500 meters, is within Brazilian territory. The R�o Paran� forms the Salto del Guair� waterfall where it cuts through the mountains of the Cordillera de Mbaracay� to enter Paraguayan territory.

The Cordillera de Caaguaz� rises where the other two main mountain ranges meet and extends south, with an average height of 400 meters. Its highest point is Cerro de San Joaqu�n, which reaches 500 meters above sea level. This chain is not a continuous massif but is interrupted by hills and undulations covered with forests and meadows. The Cordillera de Caaguaz� reaches westward from the Paran� Plateau into the Central Hill Belt.

A lesser mountain chain, the Serran�a de Mbaracay�, also rises at the point where the Cordillera de Amambay and Cordillera de Mbaracay� meet. The Serran�a de Mbaracay� extends east and then south to parallel the R�o Paran�; the mountain chain has an average height of 500 meters.

The Chaco Region

Separated from the Parane�a region by the R�o Paraguay, the Chaco region is a vast plain with elevations reaching no higher than 300 meters and averaging 125 meters. Covering more than 60 percent of Paraguay's total land area, the Chaco plain gently slopes eastward to the R�o Paraguay. The Gran Chaco, the entire western portion of the region, is subdivided into the Alto Chaco (Upper Chaco), bordering on Bolivia, and the Bajo Chaco (Lower Chaco), bordering on the R�o Paraguay. The low hills in the northwestern part of the Alto Chaco are the highest parts in the Gran Chaco. The main feature of the Bajo Chaco is the Estero Pati�o, the largest swamp in the country at 1,500 square kilometers.


Paraguay - Rivers


Rivers have greatly influenced the character of the country. The R�o Paraguay and R�o Paran� and their tributaries define most of the country's borders, provide all its drainage, and serve as transportation routes. Most of the larger towns of the interior, as well as Asunci�n, are river ports.

The R�o Paraguay has a total course of 2,600 kilometers, 2,300 of which are navigable and 1,200 of which either border on or pass through Paraguay. The head of navigation is located in Brazil, and during most years vessels with twenty-one-meter drafts can reach Concepci�n without difficulty. Medium-sized ocean vessels can sometimes reach Asunci�n, but the twisting course and shifting sandbars can make this transit difficult. Although sluggish and shallow, the river sometimes overflows its low banks, forming temporary swamps and flooding villages. River islands, meander scars, and oxbow (U-shaped) lakes attest to frequent changes in course.

The major tributaries entering the R�o Paraguay from the Parane�a region--such as the R�o Apa, R�o Aquidab�n, and R�o Tebicuary--descend rapidly from their sources in the Paran� Plateau to the lower lands; there they broaden and become sluggish as they meander westward. After heavy rains these rivers sometimes inundate nearby lowlands.

About 4,700 kilometers long, the R�o Paran� is the second major river in the country. From Salto del Guair�, where the river enters Paraguay, the R�o Paran� flows 800 kilometers to its juncture with the R�o Paraguay and then continues southward to the R�o de la Plata Estuary at Buenos Aires, Argentina. In general, the R�o Paran� is navigable by large ships only up to Encarnaci�n but smaller boats may go somewhat farther. In summer months the river is deep enough to permit vessels with drafts of up to three meters to reach Salto del Guair�, but seasonal and other occasional conditions severely limit the river's navigational value. On the upper course, sudden floods may raise the water level by as much as five meters in twenty-four hours; west of Encarnaci�n, however, the rocks of the riverbed sometimes come within one meter of the surface during winter and effectively sever communication between the upper river and Buenos Aires.

The rivers flowing eastward across the Parane�a region as tributaries of the R�o Paran� are shorter, faster-flowing, and narrower than the tributaries of the R�o Paraguay. Sixteen of these rivers and numerous smaller streams enter the R�o Paran� above Encarnaci�n.

Paraguay's third largest river, the R�o Pilcomayo, flows into the R�o Paraguay near Asunci�n after demarcating the entire border between the Chaco region and Argentina. During most of its course, the river is sluggish and marshy, although small craft can navigate its lower reaches. When the R�o Pilcomayo overflows its low banks, it feeds the Estero Pati�o.

Drainage in the Chaco region is generally poor because of the flatness of the land and the small number of important streams. In many parts of the region, the water table is only a meter beneath the surface of the ground, and there are numerous small ponds and seasonal marshes. As a consequence of the poor drainage, most of the water is too salty for drinking or irrigation.

Because of the seasonal overflow of the numerous westwardflowing streams, the lowland areas of the Parane�a region also experience poor drainage conditions, particularly in the �eembuc� Plain in the southwest, where an almost impervious clay subsurface prevents the absorption of excess surface water into the aquifer. About 30 percent of the Parane�a region is flooded from time to time, creating extensive areas of seasonal marshlands. Permanent bogs are found only near the largest geographic depressions, however.


Paraguay - Climate


Paraguay experiences a subtropical climate in the Parane�a region and a tropical climate in the Chaco. The Parane�a region is humid, with abundant precipitation throughout the year and only moderate seasonal changes in temperature. During the Southern Hemisphere's summer, which corresponds to the northern winter, the dominant influence on the climate is the warm sirocco winds blowing out of the northeast. During the winter, the dominant wind is the cold pampero from the South Atlantic, which blows across Argentina and is deflected northeastward by the Andes in the southern part of that country. Because of the lack of topographic barriers within Paraguay, these opposite prevailing winds bring about abrupt and irregular changes in the usually moderate weather. Winds are generally brisk. Velocities of 160 kilometers per hour have been reported in southern locations, and the town of Encarnaci�n was once leveled by a tornado.

The Parane�a region has only two distinct seasons: summer from October to March and winter from May to August. April and September are transitional months in which temperatures are below the midsummer averages and minimums may dip below freezing. Climatically, autumn and spring do not really exist. During the mild winters, July is the coldest month, with a mean temperature of about 18�C in Asunci�n and 17�C on the Paran� Plateau. There is no significant north-south variation. The number of days with temperatures falling below freezing ranges from as few as three to as many as sixteen yearly, and with even wider variations deep in the interior. Some winters are very mild, with winds blowing constantly from the north, and little frost. During a cold winter, however, tongues of Antarctic air bring subfreezing temperatures to all areas. No part of the Parane�a region is entirely free from the possibility of frost and consequent damage to crops, and snow flurries have been reported in various locations.

Moist tropical air keeps the weather warm in the Parane�a region from October through March. In Asunci�n the seasonal average is about 24�C, with January--the warmest month--averaging 29�C. Villarrica has a seasonal mean temperature of 21�C and a January mean of 27�C. During the summer, daytime temperatures reaching 38�C are fairly common. Frequent waves of cool air from the south, however, cause weather that alternates between clear, humid conditions and storms. Skies will be almost cloudless for a week to ten days as temperature and humidity rise continually. As the soggy heat nears intolerable limits, thunderstorms preceding a cold front will blow in from the south, and temperatures will drop as much as 15�C in a few minutes.

Rainfall in the Parane�a region is fairly evenly distributed. Although local meteorological conditions play a contributing role, rain usually falls when tropical air masses are dominant. The least rain falls in August, when averages in various parts of the region range from two to ten centimeters. The two periods of maximum precipitation are March through May and October to November.

For the region as a whole, the difference between the driest and the wettest months ranges from ten to eighteen centimeters. The annual average rainfall is 127 centimeters, although the average on the Paran� Plateau is 25 to 38 centimeters greater. All subregions may experience considerable variations from year to year. Asunci�n has recorded as much as 208 centimeters and as little as 56 centimeters of annual rainfall; Puerto Bertoni on the Paran� Plateau has recorded as much as 330 centimeters and as little as 79 centimeters.

In contrast to the Parane�a region, the Chaco has a tropical wet-and-dry climate bordering on semi-arid. The Chaco experiences seasons that alternately flood and parch the land, yet seasonal variations in temperature are modest. Chaco temperatures are usually high, the averages dropping only slightly in winter. Even at night the air is stifling despite the usually present breezes. Rainfall is light, varying from 50 to 100 centimeters per year, except in the higher land to the northwest where it is somewhat greater. Rainfall is concentrated in the summer months, and extensive areas that are deserts in winter become summer swamps. Rainwater evaporates very rapidly.


Paraguay - The Society


FOR MOST OF ITS HISTORY, a series of dichotomies characterized Paraguayan society. A contrast existed between rural and urban Paraguay and, even more pointedly, between Asunci�n--where economic, social, and political trends originated--and the rest of Paraguay. In rural Paraguay a divide existed between those holding legal title to land, usually the owners of large estates dedicated to commercial farming, and the mass of peasant squatters growing crops largely for their families' subsistence. Similarly, there was a gulf between the elite--educated, prosperous, city-based and - bred--and the country's poor, whether rural or urban. Finally, although most Paraguayans retained their fluency in Guaran� and this indigenous language continued to play a vital role in public life, there was a continuum of fluency in Spanish that paralleled (and reflected) the social hierarchy. These dichotomies not only continued into the 1980s but were exacerbated by the extensive, dramatic changes that had occurred in Paraguayan society since the 1960s.

Paraguayans of all classes viewed family and kin as the center of the social universe. Anyone not related through blood or marriage was regarded with reserve, if not distrust. People expected to be able to call upon extended kin for assistance as necessary and counted on them for unswerving loyalty. Godparents (whether or not they were kin) were important as well in strengthening social links within the web of kinship.

Migration was a perennial fact of life: peasants changed plots; men worked on plantations, factories, and river boats; women migrated to cities and towns to find employment in domestic service. Since the mid-nineteenth century there also had been a large contingent of emigr� Paraguayans in Argentina.

In the early 1970s, Paraguay's eastern border region--long underpopulated and undeveloped--replaced neighboring Argentina as the major destination of most Paraguayan migrants. Historically, land in the region had been held in immense plantations; the inhabitants were largely tropical forest Indians and mestizo peasant squatters. Beginning in the late 1960s, however, government land reform projects settled as many as 250,000 rural Paraguayans in agricultural colonies in this area. Many others bypassed the government entirely and settled in the region on their own.

Improvements in transportation and the construction of massive hydroelectric projects brought more far-reaching changes in the 1970s and 1980s. Economic growth drew tens of thousands of migrants--immigrants from neighboring Brazil as well as Paraguayan nationals--into the eastern border region. Their sheer numbers transformed the east from a sleepy hinterland into a maelstrom of change. In the process, both Indians and traditional small farmers were dispossessed of their lands and their traditional livelihood. As the construction projects were completed in the early 1980s, the region saw increased rural unrest as the peasants who had temporarily held jobs in construction found that there were no unclaimed agricultural lands for them to occupy.

The pace of urbanization--modest by world and Latin American standards--quickened during the boom years. Economic growth enabled the cities to absorb large numbers of rural Paraguayans who had been displaced by increased population pressures and the country's skewed land distribution. Economic downturns in the 1980s, however, stoked unrest among workers and peasants.



Paraguay - Population


The 1982 census enumerated a population of slightly more than 3 million. Demographers suggested annual growth rates from 2.5 to 2.9 percent in the late 1980s. Thus, in mid-1988, estimates of total population ranged from 4 to 4.4 million. Assuming a yearly increase of between 2.5 and 2.9 percent until the end of the century, Paraguay would have a population of 5 to 6 million by the year 2000.

Modern censuses began under the direction of the General Office of Statistics following the War of the Triple Alliance (1865-70). In 1886-87 the census enumerated nearly 330,000 Paraguayans. Beginning with the 1950 census, population counts have been conducted by the General Directorate of Statistics and Census. Censuses were taken in 1886-87, 1889, 1914, 1924, 1936, 1950, 1962, 1972, and 1982. Demographers distrust the 1889 data since the numbers do not follow the generally accepted population growth curve.

After moderate growth in the 1930s and 1940s, the annual intercensal growth rate climbed sharply in the 1950s and 1960s. Population was concentrated most densely in an arc surrounding Asunci�n east of the R�o Paraguay. The Chaco was the least settled area; the region lost population in the 1970s at an annual rate nearly equal to the national rate of population increase during the same period--a trend that observers believed continued into the 1980s. Settlement along the country's eastern border increased significantly with improvements in transportation and the construction of hydroelectric projects in the region.

Since the 1950s, the ratio of males to females had increased steadily--an unexpected trend. As a population's general level of living, basic nutrition, and sanitation improve, the proportion of women to men typically tends to rise as degenerative diseases take a greater toll on the male population and women's longevity begins to have a discernible statistical impact. Observers suggested that a partial explanation of Paraguay's unusual pattern might be the decreasing effect of the male emigration that occurred during the decade following the civil war of 1947. The ratio of males to each 100 females was highest in rural areas (107) and lowest in cities (94), reflecting a greater tendency of women to migrate to urban areas.

The 1982 census also revealed a slightly aging population. In 1982 nearly 5 percent of Paraguayans were over sixty-five years old, in contrast to 4 percent for this age-group a decade earlier. Meanwhile, the percentage under age fifteen had dropped 3 percent, to 41.8 percent.

The average age at which Paraguayan women entered their first marriage or consensual union began to rise in the 1950s. By the late 1970s, women in Asunci�n averaged 19.7 years of age at their first marriage; those in other cities were about 8 months younger and those in rural areas were a year younger. The Ministry of Public Health and Social Welfare cooperated in the family-planning efforts of a number of international agencies active in the country and managed several family- planning clinics in Asunci�n and other parts of the country. Between 1959 and 1978, the total fertility rate--an estimate of the average number of children a woman will bear during her reproductive years--declined by nearly one-third, to 4.97. Estimates put the rate at 4.6 in the mid-1980s, with 3.4 projected by the turn of the century.

Updated population figures for Paraguay.




Colonial Paraguay (basically, what is now Eastern Paraguay) lacked productive mines, strategic seaports, or lucrative plantation agriculture. Through most of the colonial era, it languished as a backwater of the Spanish Empire in the Americas, a region of small estates with a minimal number of Spanish settlers. The Guaran�-speaking Indians of the region were drawn into colonial society principally through high rates of intermarriage and concubinage with Spanish settlers, a process that created a mestizo society within a few generations. In the resulting cultural synthesis, the dominant language remained Guaran�, whereas the rest of the dominant social institutions and culture remained Hispanic.

The few remaining Hispanic overlords were largely eliminated in the upheaval of the War of the Triple Alliance, leaving a homogeneous population of mestizo farmers. Despite far-reaching changes from the 1960s to the 1980s, Paraguay remained a country of peasants engaged in subsistence farming. The basic social dichotomy was between small farmers and a narrow stratum of elite families whose diverse resources included links to industry, commerce, government, the military, and commercial agriculture. The upper class was centered in the capital and was interlinked by ties of kinship and marriage. Many, if not most, members of the elite knew each other from childhood, having grown up in the same neighborhoods and attended the same schools.

Guaran�--which, unlike many indigenous New World languages, included a written form after the Jesuits developed an orthography in the mid-sixteenth century--remained a vital element of Paraguayan national identity. Guaran� had always been one of the principal ways Paraguayans distinguished themselves from the rest of Latin America, and the 1967 Constitution recognizes Guaran� as a national language. Guaran� theater, in which both Paraguayan works and translations of European classics were performed, was popular with all levels of society. Paraguayan songs were internationally popular; lyrics in Spanish and Guaran� were a hallmark of Paraguayan culture.

Sociolinguist Joan Rubin characterized Paraguay as ". . . a Guaran�-speaking nation with a heavy incidence of Spanish-Guaran� bilingualism in which each language tends to fulfill distinct functions." Spanish had been the official language since the sixteenth century, and in the late twentieth century it remained the language of government, education, and religion. Nevertheless, Paraguayans of all classes spoke Guaran� much of the time. Language use varied by social context, however. Guaran� was appropriate in more intimate contexts. Spanish was used in more formal situations; it implied respect toward one of higher status. In families, for example, parents might use Guaran� in speaking to one another and require that their children speak to them in Spanish. The upper echelons were distinguished by their relative fluency and ease in using Spanish. By contrast, most rural Paraguayans were monolingual Guaran� speakers until as late as the 1960s.

<> Family and Kin
<> Ritual Kinship


Paraguay - Family and Kin


For Paraguayans of all social strata and backgrounds, family and kin were the primary focus of an individual's loyalties and identity. In varying degrees of closeness, depending on individual circumstances and social class, the family included godchildren, godparents, and many members of the extended family. Paraguayans felt some reserve toward anyone not able to claim relationship through kinship or marriage. Family and kin--not the community-- were the center of the social universe. An individual could expect assistance from extended kin on an ad hoc basis in times of need. Poorer Paraguayans relied particularly on their mother's relatives; the more prosperous were more even-handed in their dealings with extended kin. The country's elite buttressed its economic advantages through a web of far-reaching kinship ties. The truly elite family counted among its kindred large landholders, merchants, intellectuals, and military officers. Political allegiances also reflected family loyalties; all available kin were marshalled in support of the individual's political efforts.

Nonetheless, most people lived in nuclear families consisting of spouses and their unmarried offspring. Most families consisted of a couple and their pre-adult children or a single mother and her children. Individual adults living alone were rare. If a marriage broke up, the mother typically kept the children and home, whereas the father either formed another union or moved in with relatives until he did so. The most typical extension of the nuclear family was a form of "semi-adoption" in which well-to-do townspeople took in a child of poorer rural relatives or adopted (on a more permanent basis) the illegitimate offspring of a female relative. There were few intergenerational households. Adoption conformed to cultural norms favoring assistance to relatives, but intergenerational families were viewed as a source of conflict. This characterization also usually prevented a daughter and her children from moving back home following a divorce or separation.

The nuclear family prevailed, in part, because of the limited economic opportunities available to most families. Few of the traditional enterprises by which most Paraguayans earned a living could support more than the immediate family members.

Surveys in the late 1970s and early 1980s found that nearly 20 percent of all households were headed by a single parent--usually the mother. The incidence was highest in cities outside of Greater Asunci�n and lowest in rural areas. Households headed by a female generally were poor. Children's fathers might or might not acknowledge their offspring; in either event, admitting paternity did not obligate men to do much in the way of continued support for their children. Most single mothers worked in poorly paying jobs or a variety of cottage industries. In almost all cases, they were consigned to a sector of the economy where competition was intense and earnings low.

Within two-parent families, the male was the formal head of the household. Fathers were treated with respect, but typically had little to do with the daily management of the home. Their contact with children, especially younger ones, was limited. Women maintained ties with extended kin, ran the home, and dealt with finances; they often contributed as well to the family's income. Men spent a good deal of time socializing outside the home.

There were three kinds of marriage: church, civil, and consensual unions. Almost all adults married. Although stable unions were socially esteemed, men's extramarital affairs drew little criticism as long as they did not impinge on the family's subsistence and continued well-being. By contrast, women's sexual behavior reflected on their families and affected family stability; women were expected to be faithful as long as they were involved in a reasonably permanent union. A church wedding represented a major expense for the families involved. The common view held that a fiesta was an essential part of the ceremony and required that it be as large and costly as the two families could possibly afford. The celebrations attendant on a civil marriage or the formation of a consensual union were considerably less elaborate. Typically, the couple's families met for a small party and barbecue. Church weddings were rare among peasants--the expenses were simply beyond the reach of the average farm family. Even a civil marriage was a mark of status among peasants.

So-called illegitimacy was neither a stigma nor a particular disadvantage if the child came from a stable consensual union and could assume the father's name. But children of upper-class males and lower-class women suffered because, although their fathers recognized them as offspring, they could not use the paternal family name, nor did they have a claim to the father's inheritance. Children whose fathers were not known or would not acknowledge them lost the most status. They were typically the offspring of single mothers who themselves were very poor.

Reality was often at odds with the Paraguayan ideal of extended kinship ties. Because the poor migrated frequently and often had unstable marital unions, relatives typically were well-known only for a generation preceding and following a given individual. The wealthy were more adept at tracing lines of descent through several generations. This was a function of their greater marital stability and their vested interest in maintaining the links that tied them to potential inheritance. Relatives in prosperous families often were not as close as their less affluent counterparts, however, because the well-to-do relied less on relatives for mutual aid and were potential competitors for inheritance.


Paraguay - Ritual Kinship


Ritual kinship in the form of godparenthood (compadrazgo) played an important role in strengthening and extending the ties of kinship, as it did in much of Latin America. Parents selected godparents for a child at his or her baptism, confirmation, and marriage. The godparents were then tied to the parents as coparents . Those chosen for the child's baptism were considered the most important, and great care was exercised in their selection.

Ideally co-parents should be a married couple; they were preferred because their unions were typically more stable and they were more likely to be able to provide a home for the child should the need arise. In most communities, however, there were not enough couples to serve as godparents for all children, so single women of good reputation were frequently chosen. It was important that the person asked should be of proper character and good standing in the community.

Often parents asked a close, important relative to serve as godparent. The tie between co-parents reinforced that of kinship. The same godparents could serve for the couple's successive children, a practice that further strengthened the ties between the families involved.

A godparent was expected to see to his or her godchild's upbringing, should the parents be unable to do so. In many ways the social link between co-parents was more significant than that between godparents and godchildren. Co-parents were required to treat each other with respect and assist one another in times of need. Marriage or sexual relations between co-parents were considered incestuous; an insult to a co-parent was a grave matter, condemned by the community at large. In the countryside, ties to godparents had daily social significance; children visited their godparents often and were expected to treat them with particular respect. Not even quarrels or the death of the godchildren should break the ties between co-parents.

Compadrazgo served different purposes in rural and urban areas and among different social classes. In cities and among the more prosperous, the institution principally fulfilled the requirements for a Roman Catholic baptism. Godparents assumed the cost of the baptism and were expected to give gifts on a godchild's birthday and other significant occasions. Rarely did they have to assume the responsibility of raising a godchild; if they did, the financial wherewithal was provided through inheritance. In the countryside and among the poor, the responsibility to care for the godchild was taken more literally. If the parents were unable to care for their offspring, a godparent was expected to do so or find someone who could. Godparents should not only give gifts to the godchild on special occasions, but also assist with his or her schooling. Co-parents should come to one another's aid in times of social or economic distress.

The choice of a godparent also varied by social class. The urban and rural upper class and the urban middle class selected friends or relatives. In both groups co-parents were usually social equals. The institution had less practical significance than it had among the poor. For those of limited means, the emphasis was less on the feeling of friendship the co-parents shared and more on the potential economic benefits that the child might enjoy. Among peasants or the urban poor the choice could be either a relative or an influential benefactor (patr�n). When a patr�n agreed to serve as a godparent, the lower-class individual was entitled to more extensive dealings with the higher-status person. He or she could, for example, visit the patr�n's house and expect to be received hospitably. The patr�n expected in return absolute and unquestioning loyalty. In essence, this system satisfied the poor person's need to look above his or her class for protection, while satisfying the desire of the wealthy for a more loyal following. Where the expectations were met on both sides, compadrazgo could blunt the obvious economic disparities in small towns and the countryside. It also had important political implications. It was through such traditional kinlike ties that landholders from the ruling National Republican Association-Colorado Party (Asociaci�n Nacional Republicana--Partido Colorado) could mobilize support among the peasantry.




Rural life, like much else in Paraguay, was defined by a series of dichotomies: commercial versus subsistence agriculture, large landholdings as opposed to small farms, and landowners in contrast to squatters. Land ownership was highly concentrated, and large- scale enterprises dominated the production of lucrative commercial crops. Most farms were smaller than ten hectares. In the densely settled central region (comprising the departments of Paraguar�, Cordillera, Guair�, and Caazap�), these small landholdings constituted as much as 80 percent of all landholdings.

Although inequality underlay the system as a whole, the extensive land reserves and low population density that characterized Paraguay until the 1950s softened the impact of the disparities recorded in agricultural surveys and censuses. The largest holdings were vast ranches in the Chaco or along the country's eastern border, regions of low population density. Large estates were typically worked extensively, but custom permitted squatters to occupy the fringes with little interference. The landowner would be either unaware of their presence or undisturbed by it. Even where there were terms of rent for land, they might be as minimal as occasional labor for the landlord or gifts of produce at harvest or on the landlord's birthday. Although surveys showed that few Paraguayans owned land, fewer still paid much for the privilege of using it. Historically, squatters were useful to a landowner in a variety of informal ways. They were a pool of reserve labor, semi-obligated to work for below-average wages during labor shortages. The presence of squatters also was insurance against more serious incursions on one's lands in an environment where clear land titles were not easy to come by. Patterns of land use were deeply ingrained in any event, and they often limited a landowner's options in dealing with tenants.

The relationship between the landowner and squatters was usually transitory, but in some instances it persisted for generations as a patr�n-pe�n arrangement. The patr�n served as an advocate for his peones; they were to him the elements of a loyal following. In essence, the connection was that of client to powerful protector. It implied unquestioning loyalty and respect on the part of the pe�n.

The patr�n-pe�n relationship served as a metaphor and model for proper social relations for rural society; indeed, the terms effectively delineated social boundaries. Peasants used patr�n as a general term of respectful address in speaking to any urban person of obviously higher status. Townspeople generalized pe�n to refer to any lower-class person-- although not in direct address, because to call a person pe�n to his face would be a breach of etiquette. The relationship also colored economic relations between patr�n and pe�n; anthropologists Elman and Helen Service described contracting wage labor between the two: ". . . a patr�n hires a person as though he were asking a personal favor, and the pe�n responds as though he were obliged to grant it." Economic relations as a whole were ideally enmeshed in social ties like that of patr�n to pe�n. Storekeepers each had their loyal followings, and it was considered disloyal to shop at another shop merely to take advantage of better prices. In return, customers expected preferential treatment, small favors, and some credit when they needed it.

Peasant farming was characterized by "agricultural nomadism"; the search for a better plot or improved circumstances was perennial. Cultivation was slash-and-burn followed by a fallow period of several years. Farmers preferred land on the fringe of primary or dense secondary strands of tropical forests. Agricultural income among small farmers was not particularly tied to land tenure. A successful peasant might own, rent, or simply use the lands he farmed.

Population growth eventually increased pressure on farmland and forest reserves. The pressure was most acute in the arc stretching roughly 100 kilometers north and east of Asunci�n, where approximately half the farms and half the squatters in the country were found. By the late 1950s, squatters and landowners faced increasingly bitter confrontations over communal grazing rights and land boundaries. Large landholders called for programs to "decongest" the central area and move the squatters to less populated regions along the northern and eastern borders.

These calls led to the formation in 1963 of an agrarian reform agency--the Rural Welfare Institute (Instituto de Bienestar Rural-- IBR)--charged with the task of resettling peasants in the eastern border region, especially the departments of Alto Paran�, Canendiy�, Amambay, and Caaguaz�. Although the program resettled many families in the 1960s and 1970s, critics noted that efforts to improve the farmers' standard of living were hampered by a lack of credit, technical assistance, and infrastructure.

The eastern region enjoyed an economic boom during the building of the Itaip� hydroelectric power plant. As construction was completed, however, thousands of laborers were lost their jobs. In the meantime, the land tenure situation in the region had changed dramatically. Many large landowners sold their properties to Brazilian and other foreign agribusinesses. These new owners, more committed than their predecessors to modern farming techniques, strongly objected to the presence of peasants on their properties. In addition, thousands of Brazilian farmers entered the area to claim properties significantly cheaper than comparable lands in their own country. As a result, the erstwhile Itaip� laborers were unable to resume the practice of occupying plots as squatters. Clashes occurred between squatters and authorities throughout the mid-1980s. During the same period, the demand for farm laborers declined as the large-scale timber and soybean enterprises in the area became more mechanized.

Despite these dramatic changes in land tenure, many other aspects of rural society remained unchanged into the late 1980s. Most farming was subsistence-oriented. Given a holding of some ten hectares, a family might keep four to six hectares under actual cultivation at any given time. The traditional tool kit and technological repertoire reflected the limited economic opportunities the countryside afforded most farmers.

The family was the chief source of farm labor. Men usually cleared the land and prepared the soil; women and children planted, weeded, and harvested the crops. Men were frequently absent in search of wage labor and women were accustomed to manage the farm in their absence. Farms permanently headed by women were rare, however; a woman widowed or deserted by her spouse typically moved to a nearby town.

Neighbors frequently exchanged labor for various agricultural tasks; recipients were obliged to return the assistance when the neighbor needed help, although this arrangement was not formalized. The rate of labor exchange was greater when, as was often the case, neighbors were also relatives. Most crops had a lengthy planting and harvesting season, which spread out the periods of peak labor demand and facilitated the exchange of labor among households.

Wage labor was important to the family's subsistence. In some regions men supplemented agricultural production by gathering the yerba mat� bush--the leaves of which produced a bitter tea consumed by Paraguayans--or by hunting game. If the homestead was along a major road, women sold handicrafts. Raising livestock often was a subsidiary source of income.

The numerous small towns dotting the eastern half of the country every ten to twenty kilometers were the loci of commercial relations and all effective political and religious authority. A town's inhabitants normally included a few large commercial ranchers, wholesalers and retailers of all kinds and degrees of prosperity, small manufacturers, government officials, and a few professionals such as teachers and pharmacists. There were numerous poor people who eked out a living as servants or laborers. The occupational specialists common to rural Paraguay -- barbers, curers, and craftsmen--were typically town dwellers. Most households headed by females were urban; the women earned their livelihood as storekeepers, servants, seamstresses, laundresses, curers, midwives, or cigar-makers.

Peasants attended town functions primarily as observers. Rural families might visit a nearby town during its saint's fiesta, but church would be too far away for regular attendance. The lay functionaries who attended to many church affairs in the community were urban and prosperous. Civic events and fiestas themselves reflected enduring social distinctions based on wealth and breeding: that between la gente (the common people) and la sociedad (society, those with wealth and the required social graces). Fiestas traditionally included separate dances for the two groups that might be held on different nights or in different locations. There was little doubt about who should attend which function. The only role for la gente at the formal dance for the upper crust was as observers.




Historically, Paraguay had been an overwhelmingly rural country. The 1950 census found only about one-third of the population to be city dwellers. The human landscape for most of the country east of the R�o Paraguay -- where nearly all Paraguayans lived--was one of scattered homesteads interspersed with small towns of fewer than 1,000 inhabitants.

Most Paraguayan communities existed in varying degrees of isolation. In the late 1980s, only 20 percent of the country's roads were paved. For most people, travel was on foot or on horseback. The two-wheeled ox cart was the most common means of transport for agricultural produce.

The isolation of the countryside masked extensive migration, however. Despite rudimentary transportation facilities, the rural populace was mobile. Slash-and-burn agriculture required a lengthy fallow period, and farmers typically moved as yields declined on their plots. Rural-rural migration was the typical pattern, but the typical move was not over a long distance. According to the 1950 census, in most departments at least 70 percent of all Paraguayans were living in the department of their birth. In the densely settled departments of the central region, the proportion was 90 percent.

There were, however, several migration paths of longer distance and duration. In the first half of the twentieth century, for example, many peasants contracted to work on the yerba mat� plantations along the eastern border. Working conditions were so wretched that few workers would willingly stay on past their contracted time. Others worked on the riverboats or in timber or logging operations.

There also was a long history of Paraguayan emigration to Argentina; the 1869 Argentine census enumerated several thousand Paraguayan emigr�s. The numbers recorded rose steadily throughout the twentieth century. Estimates of Paraguayans resident in Argentina in the early 1970s ranged from 470,000 to 600,000, or 20 to 25 percent of Paraguay's total population at that time. Between 1950 and 1970, anywhere from 160,000 to 400,000 Paraguayans left their homeland for Argentina. Males predominated slightly, and male migrants tended to be younger than their female counterparts--there were few male Paraguayans over age thirty leaving for Argentina. Even low estimates suggested that approximately 55,000 women between 20 and 29 years of age emigrated between 1950 and 1972. The emigation was sufficient to have a significant impact on Paraguay's natural rate of population increase.

The majority of emigrants came from the central region--an indication of widespread underemployment in agriculture and artisanal industry in that area. Most men went to northeastern Argentina to seek better opportunities on that region's plantations as well as in the textile, tobacco, and lumber industries. The migrants generally were successful--at least they tended to find salaried employment rather than eke out an existence in selfemployment . Women, following a pattern typical of Latin American rural-urban migration for females, migrated to Buenos Aires more frequently and found employment in domestic service. Men who migrated to Buenos Aires gravitated to the construction trades.

The path to Argentina was sufficiently travelled to make the way easier for later migrants. Some Argentine companies recruited in Paraguay. Experienced emigrant workers brought friends and relatives with them when returning from visits home, thus sparing the new migrants a lengthy search for housing and employment.

From the early 1960s through the early 1980s, the departments along the country's eastern border also were a favored destination for longer-distance rural-rural migrants. Most came from the central region--an area that, as a result of out-migrations, grew in population at only half the rate for the nation as a whole during the 1972-82 intercensal period. In 1950 the central region accounted for half of Paraguay's total population, but by 1982 the proportion had declined to about 38 percent. Between 1967 and 1972, an estimated 40,000 peasants left the departments of Cordillera, Paraguar�, and Caazap� in search of better living and working conditions. These departments' share of total population declined from more than 21 percent in 1972 to less than 17 percent in 1982. During the same intercensal period, the population of the three departments grew at a scant 0.1 percent in contrast to the 2.7- percent growth rate for Paraguay as a whole.

By contrast, the eastern departments gained population dramatically during the 1972-82 period. The population of the eastern region as a whole grew at a rate more than 2.5 times the national average. The populations of both Alto Paran� and Caaguaz� grew at a rate of roughly 10 percent annually. Between 1960 and 1973, the IBR resettled an estimated 250,000 rural Paraguayans in agricultural colonies in underpopulated regions with some potential for increased agricultural production.

Despite Paraguay's essentially rural character, Asunci�n already had a well-defined role by the end of the colonial era as the hub of government, commerce and industry. Goods flowed from the capital to the individual towns of the countryside--the towns themselves exchanged little with each other. Agricultural products were routed to Asunci�n; in return, manufactured goods went out to rural areas. Asunci�n's preeminence over other cities was made sharply evident by the 1950 census. That census enumerated 7 cities with more than 5,000 inhabitants, but only 1, Asunci�n (which had a population slightly more than 200,000) with more than 20,000 residents.

Yet even Asunci�n, political scientist Paul Lewis observed, had the air of a "sleepy tropical outpost." Until the 1960s, automobiles and telephones were rare; perhaps half of the capital's homes had electricity. The city was without a piped water supply and sewage disposal system. Most families bought drinking water from peddlers who sold it door-to-door by mule.

From the 1960s through the early 1980s, however, migrants flocked to the region surrounding and including Asunci�n. The capital experienced its fastest growth in the 1960s, when its population grew roughly 3 percent annually. Although Asunci�n itself lagged during the 1970s, growing at a mere 1.6 percent per year, the metropolitan region grew at rates well above the national average.

Most migrants to Asunci�n found employment in the service sector or in small artisanal enterprises calling primarily for unskilled laborers. Despite the low wages they offered, these jobs exerted a pull for potential migrants because they were marginally better than what was available in the countryside. The Asunci�n area had long attracted rural-urban migrants, which meant that many rural dwellers considering a move could find assistance from kin who had made the move earlier. The construction boom in the 1970s also drew substantially greater numbers from rural Paraguay to Asunci�n.

Urbanization in the 1970s and early 1980s also was fueled by economic expansion along the eastern border. Spurred by the Itaip� hydroelectric project, the urban population of Alto Paran� grew 20 percent annually during the intercensal period from 1972 to 1982. The population of Puerto Presidente Stroessner, the city nearest the project, expanded nearly sixfold during the 1970s, as did the population of nearby Hernandarias. Cities in Amambay also grew during the 1970s, although at a more modest annual rate of 6 percent.

As a result of growth along the eastern border, by 1982 Paraguay had more than 30 cities with at least 5,000 inhabitants. This eastern expansion helped balance the dramatic growth occurring in Asunci�n and spared Paraguay the "hyper-urbanization" characteristic of many Latin American capitals. In 1950 the metropolitan area had accounted for about 20 percent of total population; by the early 1980s, this proportion had increased modestly to 25 percent.


Paraguay - RELIGION


In the 1980s an estimated 92 to 97 percent of all Paraguayans were Roman Catholics. The remainder were Mennonites or members of various Protestant groups. The 1967 Constitution guarantees freedom of religion, but recognizes the unique role that Catholicism plays in national life. The president must be a Roman Catholic, but clergy are enjoined from serving as deputies or senators and discouraged from partisan political activity. Relations between church and state traditionally were close, if not always cordial.

A papal decree created the Bishopric of Asunci�n in 1547, and the first bishop arrived in the diocese in 1556. In 1588 three Jesuits came with the intent of pacifying and converting the Indians. After the arrival of additional Jesuits and Franciscans, the priests began working in the southeastern area of modern Paraguay and on the shores of the R�o Paran� in parts of what is now Argentina and Brazil.

The Jesuits soon realized that they had to protect the Indians from enslavement by the growing numbers of Spanish and Portuguese if they were going to convert them. They accomplished this by settling the Indians in reducciones (townships) under Jesuit direction. At one point about 100,000 Indians lived in the reducciones; the system lasted a century and a half until the Jesuits' expulsion (1767). Following the end of the Jesuit regime, the reducci�n Indians were gradually absorbed into mestizo society or returned to their indigenous way of life.

For much of the nineteenth century, church-state relations ranged from indifferent to hostile. The new state assumed the prerogatives of royal patronage that the Vatican had accorded to the Spanish crown and sought to control bishops and the clergy. Jos� Gaspar Rodr�guez de Francia (1814-40) was committed to a secular state. He suppressed monastic orders, eliminated the tithe, instituted civil marriage, and cut off communication with the Vatican. Francisco Solano L�pez (1862-70) used the church as a branch of government, enlisting priests as agents to report on the population's disaffection and signs of subversion.

Church-state relations reached their nadir with the execution of the bishop of Asunci�n, Manuel Antonio Palacio, during the War of the Triple Alliance (1865-70). By the war's end, there were only fifty-five priests left in the country,and the church was left leaderless for eleven years.

The modern Paraguayan church was established largely under the direction of Juan Sinforiano Bogar�n (archbishop of Asunci�n, 1930- 49) and An�bal Mena Porta (archbishop of Asunci�n, 1949-69). Both envisioned a church whose role in the country's endemic political struggles was that of a strictly neutral mediator among the rival factions.

Starting in the late 1950s, the clergy and bishops were frequently at odds with the government. Confrontations began with individual priests giving sermons calling for political freedom and social justice. The activities of the clergy and various lay groups like Catholic Action (Acci�n Cat�lica) pushed the church hierarchy to make increasingly critical statements about the regime of Alfredo Stroessner Mattiauda (president since 1954).

In the 1960s the Catholic University of Our Lady of Asunci�n became a center of antiregime sentiment. Students and faculty began cooperation with workers and peasants, forming workers' organizations as an alternative to the government-sponsored union. They organized Christian Agrarian Leagues (also known as peasant leagues) among small farmers. The organizations sponsored literacy programs, welfare activities, and various types of cooperatives. In addition, Catholics operated a news magazine and radio station-- both critical of the government.

Throughout the 1970s and 1980s, there were sporadic student demonstrations and government crackdowns. The church criticized the lack of political freedom and the government's human rights record. The government's principal countermeasures included expelling foreign-born clergy and periodically closing the university, news magazine, and radio station. In response, the archbishop of Asunci�n excommunicated various prominent government officials and suspended Catholic participation at major civic and religious celebrations.

On a popular level, Catholicism was an essential component of social life. Even the poorest of homes contained pictures of the saints and a family shrine. Catholic ritual marked the important transitions in life: baptism, confirmation, marriage, and burial. Participation in the rites of the church reflected class and gender expectations. The poor curtailed or delayed rituals because of the costs involved.

Sex roles also affected religious participation. Devotion fell into the female sphere of activities. Men were not expected to show much concern about religion. If they attended mass, it was infrequently, and normally men stood in the rear of the church ready to make a quick exit. Women were supposed to be more devout. Regular participation in church services was seen as a virtue on their part. They were more likely to seek the church's blessing at critical points in the family's existence.

Religion served as perhaps the only institution in society that transcended kinship relations. Both politics and economic activities were enmeshed in the relations of kin; they reflected the family feuds and the accumulated loyalties of generations past. It was in popular religion, however, especially in the communal religious fiestas, that Paraguayans of every social stratum participated and the concerns of family and kin were, to a degree, muted. Fiestas were community and national celebrations; they served as exercises in civic pride and Paraguayan identity. Church holidays were public holidays as much as religious occasions.

The populace enjoyed the celebrations associated with fiestas, but actual belief and practice were typically uninformed by orthodox Catholic dogma. Especially in rural Paraguay, the saints associated with popular devotion were often no more than revered local figures.

Religious societies played an important role, planning and organizing local fiestas and undertaking welfare activities. Various lay brotherhoods assumed responsibility for assisting widows and children, among other duties associated with the care of the poor.




Although the vast majority of Paraguayans were mestizos and the population was largely homogeneous, minorities became an increasingly significant force during the 1970s and 1980s. Paraguay's population historically had included small numbers of immigrants from Europe, the Middle East, Asia, and Latin America. During the 1970s, however, thousands of Brazilian settlers crossed the border into Paraguay's eastern departments, dramatically affecting life there. During the same period, thousands of Koreans and ethnic Chinese settled in urban Paraguay. Finally, there were the remnants of the country's original Indian population who continued to follow an indigenous way of life.


A trickle of European and Middle Eastern immigrants began making their way to Paraguay in the decades following the War of the Triple Alliance. The government pursued a pro-immigration policy in an effort to increase population. Government records indicated that approximately 12,000 immigrants entered the port of Asunci�n between 1882 and 1907, of that total, almost 9,000 came from the Italy, Germany, France, and Spain. Migrants also arrived from neighboring Latin American countries, especially Argentina.

Most migrants--even many who began their lives in Paraguay's agricultural settlements--typically found their way into urban trades and commerce and became the backbone of the country's small middle class. Middle Easterners tended to remain culturally and socially distinct even after several generations. European and Latin American immigrants were more readily assimilated. Nonetheless, in small towns non-Paraguayan family origins were noted for generations after the original migrant's arrival.

Although most minority groups tended to prefer urban life, Japanese immigrants founded and remained in agricultural colonies. Until the twentieth century, Japanese immigration was limited by Paraguay's unwillingness to accept Asian colonists; Japanese themselves preferred the more lucrative opportunities offered by the expanding Brazilian economy. When Brazil set quotas on Asian immigration in the 1930s, however, a Japanese land company set up an agricultural settlement southeast of Asunci�n. Two more colonies near Encarnaci�n followed in the 1950s. A 1959 bilateral agreement between the Japanese and Paraguayan governments encouraged further immigration. By the 1980s there were about 8,000 Japanese settlers in agricultural colonies. The colonists made a concerted effort to preserve Japanese language and culture with varying degrees of success. Until the end of World War II, the earliest settlement supported a parallel educational system with subjects taught entirely in Japanese; the colonists eventually limited this to supplemental Japanese language classes. By the late 1960s, many Japanese children could speak in Japanese, Guaran�, and Spanish. But there was strong bias against Japanese-Paraguayan intermarriage.

Like the Japanese, most German--speaking Mennonite immigrants remained in agricultural colonies. The bulk of the Mennonite population came between the 1920s and the 1940s and established three colonies in the central Chaco. In 1926 approximately 2,000 persons left Canada after the passage of legislation requiring English to be the language of instruction in Mennonite schools. The Paraguayan government, eager to develop the Chaco, readily allowed Mennonites to conduct their own schools in German and exempted the immigrants from military service.

The original Menno Colony was followed by the establishment of the Fernheim Colony in 1930 and the Neuland Colony in 1947. These latter two groups of colonists, also German--speaking, fled religious persecution in the Soviet Union. The Fernheimers, who had higher levels of education and more exposure to urban life than did the Mennos, also founded the town of Filadelfia, which eventually became an important agricultural supply center for the central Chaco. Some Fernheimers and Neulands left the Chaco to establish small colonies in Eastern Paraguay. In the early 1980s, there were approximately 15,000 Mennonites in Paraguay; two-thirds lived in the Chaco, with the remainder in Caaguaz�, San Pedro, and Itap�a departments and in Asunci�n.

Until the 1970s, the Brazilian presence in Paraguay was relatively minor and was confined primarily to privately organized agricultural colonies along the easter border. In 1943 there were fewer than 500 Brazilian farmers in all of Paraguay; throughout the 1950s and 1960s the proportion of Brazilians in the eastern border region held constant at between 3 and 4 percent of the total population of the area.

In the early 1970s, however, Brazilian immigrants, persuaded by a variety of factors, began streaming into the region from the neighboring Brazilian state of Paran�. In 1967 the Paraguayan government repealed a statute that had prohibited foreigners from purchasing land within 150 kilometers of the country's borders. During the same era, increased mechanization of soybean production in Paran� generated a growing concentration of landholdings in that area. Brazilian farmers whose holdings were too small to support increased production costs sold their land in Brazil and bought cheap land in Paraguay. In the late 1970s, land along Paraguay's eastern frontier was seven to eight times cheaper than comparable land in Brazil. The disparity in prices drew large investors who cleared the land of saleable timber, then subdivided it and sold it to Brazilian immigrants.

Official records gave only an imprecise sense of the number of Brazilians who had come to the country. According to the 1982 census, there were 99,000 Brazilians residing in Paraguay. Most analysts discounted this figure, however, and contended that between 300,000 and 350,000 Brazilians lived in the eastern border region. Along the border, the Brazilian cruzeiro was more commonly used than the guaran�, and Portuguese was heard more often than Spanish or Guaran�. Many Paraguayan peasants and Indians were evicted from lands purchased by immigrants. The pace of land sales increased to such a point that undercapitalized Paraguayan farmers who had settled in the region as part of IBR's colonization programs were selling their lands to Brazilian farmers and financial groups.

Analysts also rejected government figures on the number of immigrants from the Republic of Korea (South Korea), Hong Kong, and Taiwan. The 1982 census reported that there were 2,700 Koreans in Paraguay, along with another 1,100 non-Korean or non-Japanese Asian immigrants. The actual number of Koreans and ethnic Chinese, however, was believed to be between 30,000 and 50,000. Virtually all Koreans and ethnic Chinese lived in Puerto Presidente Stroessner or Asunci�n and played a major role in the importation and sale of electronic goods manufactured in Asia.

<> Indians


Paraguay - Indians


Sixteenth-century Iberian explorers in South America found the Atlantic Coast of modern-day Brazil in the control of Guaran� Indians; the groups on the southern Brazilian coast, known as the Tupinamb�, had extended their territory inland to the R�o Paraguay, R�o Paran�, and R�o Uruguay. Various migrations eventually brought these and other closely related groups to the eastern flanks of the Andes.

The Spanish rapidly subjugated and assimilated the Guaran� they encountered in what later became Eastern Paraguay. High rates of intermarriage or concubinage between Spanish settlers and Guaran� women created a society that was overwhelmingly mestizo. In the resulting synthesis, the dominant social institutions and culture were Hispanic; the commonly spoken language, however, was Indian in origin.

As many as 100,000 Indians lived in Jesuit-run reducciones during the seventeenth and eighteenth centuries. After the expulsion of the Jesuits from Paraguay in 1767, the reducciones were taken over by civil authorities; subsequent mismanagement caused their population to decline. The survivors either were assimilated into the rural mestizo population or fled to the hinterland.

Over the next two centuries, relations between vestigial groups of Indians and the dominant rural Paraguayans were infrequent. When interaction occurred at all, it was often violent. Nevertheless, the War of the Triple Alliance reduced the Paraguayan population sufficiently to reduce pressure on forest lands and thus buffered the remaining tribes.

The Indians' situation remained relatively stable until the mid-twentieth century. Although much land along the eastern border was held by foreign investors, these vast estates were not worked intensively. Hunters and gatherers therefore had sufficient reserves of land, as did the more sedentary populations. Although Indians might occasionally serve as laborers, they were not pressured by other rural settlers or missionaries. In the Chaco most tribes adopted sheep and goat herding; the inhospitable nature of the region provided a natural barrier to mestizo settlement and protected many groups from outside interference until the Chaco War of 1932-35.

In the early 1980s, the Paraguayan Indian Institute (Instituto Paraguayo del Ind�gena--Indi) estimated the country's Indian population at nearly 40,000. Indi's efforts to count the Indians met with significant resistance from some indigenous leaders. Various anthropologists placed the count higher, at 50,000 to 100,000, or 1.5 to 3 percent of the total population. But all the numbers represented only the roughest of approximations.

Paraguay's indigenous peoples were divided into seventeen tribal groups representing six language families. Even in the ethnographic literature, there was confusion about the precise distinctions among tribes and the linguistic relationships involved.

In general, observers relied upon a person's self-identification and that of those in contact with him or her in categorizing the individual as an Indian. Those who viewed themselves as tribal members--separate and distinct from the national culture--and who were seen by others as indios or ind�genas, were classified as Indians. Language was a less certain cultural marker, but in general Indians spoke as their primary language neither Spanish nor the variety of Guaran� used by most Paraguayans.

Despite pride in their Guaran� heritage and language, many Paraguayans had negative feelings toward the country's remaining Indians and viewed nomadic tribes as subhuman. A survey of attitudes toward Indians in the 1970s found that 77 percent of respondents thought: "They are like animals because they are unbaptized." Indianness was a stigma; even Indians who became sedentary and Christian faced continued discrimination in employment and wages. According to estimates in the 1980s, the 3 percent of the population considered Indians accounted for roughly 10 percent of the poorest segment of Paraguayan society.

The R�o Paraguay split the country's Indians: the four groups in Eastern Paraguay all spoke varieties of Guaran�, whereas the approximately thirteen tribes of the Chaco represented five language families. In the 1970s and 1980s, the situation of specific tribes varied according to a number of circumstances. The principal factor affecting a tribe's well-being was the extent and kind of pressure brought to bear on Indians and their traditional territories by outsiders.

The Guaran� speakers of Eastern Paraguay were scattered throughout the (formerly) remote regions to the northeast, along the country's border with Brazil. Although much land occupied by Indians had been legally owned by large estates, the tribes traditionally had been able to practice slash-and-burn agriculture and hunting and gathering largely undisturbed. Members of some tribes occasionally worked as wage laborers on the immense yerba mat� plantations, whereas others had no peaceful relations with the larger society. Beginning in the 1960s, however, the tribes' customary ways of life were eroded by the IBR-sponsored settlements, the influx of Brazilian migrants, the purchase and more efficient operation of many estates by multinational firms, and the initiation of large-scale hydroelectric projects. As a result of increasing intrusions into traditional Indian lands, almost all Indians in Eastern Paraguay were involved in wage labor to some degree by the late 1970s.

For the past century, the largest tribe in Eastern Paraguay, the Pai�-Tavytera�, subsisted through a combination of slash-and-burn farming, fishing and hunting, and periodic wage labor. For them the far-reaching changes of the 1960s and 1970s meant loss of land, the depletion of hunting and fishing resources, and increased dependence on wage labor. By the early 1970s, anthropologists found malnutrition widespread and tuberculosis endemic among tribal members. Estimates of mortality during the first two years of life were as high as 50 percent. The Av�-Chirip�, to the south of the Pai� territory, had been subject to even more outside pressure: they were well on the way to being dispossessed of their traditional lands and becoming dependent on wage labor.

Contact between the Ach� tribe and the larger society had never been peaceful. During the 1960s and 1970s, a variety of rural Paraguayans raided and enslaved some of the Ach�, who continued to follow a seminomadic existence in Eastern Paraguay's forests. By the late 1970s, the Ach� survived only in a few communities run by missionaries and on a few ranches in Eastern Paraguay. Because of the Ach�'s more secure position on missions and ranches, organized raiding was largely eliminated by the early 1980s. Nonetheless, small groups of Ach� on return trips to the forest to forage and hunt were often the targets of rural Paraguayans, and reports persisted in the mid-1980s of Indians being held involuntarily by Paraguayan families.

The Chaco Indians had a more varied history of contact with outsiders. They tenaciously resisted colonial efforts at pacification and conversion. Indeed, the warlike Indians, in combination with the inhospitable Chaco terrain and climate, presented an effective barrier to Spanish expansion west of the R�o Paraguay. The Chaco Indians subsisted in a traditional manner by hunting and gathering and raising livestock. The sale of animal skins and periodic wage labor in tanning factories along the R�o Paraguay or on sugar plantations in Argentina provided a source of cash income.

The tribes lived without undue interference until the Chaco War (and the subsequent expansion of ranching in the region) and Mennonite colonization in the central Chaco. Almost all Chaco tribes became more sedentary after the war. The Mascoi-Toba speakers of the central and southeastern Chaco were especially affected, and by the 1980s many spoke only or primarily Guaran�. Some tribes that provided scouts for the army during the war later found occasional employment with military garrisons. The increase in ranching meant less land and game available to hunters and gatherers and a concomitant rise in the need for wage labor. After the government banned the sale of skins in an effort to preserve the declining animal population, the Indians became increasingly dependent on the region's cattle ranches for wage labor. Dependence also increased following the closing of most of the tanning factories. Demand for labor in ranching, however, declined precipitously as lands were cleared and fenced. In addition, the opening of the Trans-Chaco Highway meant that Indians had to compete with migrants, usually single males, from elsewhere in the country. Ranchers often preferred employing these transients to assuming responsibility for allowing Indians with families to settle and work on their ranches.

Language use among the Chaco tribes reflected the various ways that groups adapted to the presence of outsiders and the changing economy. Migration and wage labor brought with them a significant amount of intertribal marriage. Guaran� or (less frequently) Spanish came to serve as a lingua franca. In groups that had a history of several generations of labor in the tanning factories, husbands and wives from different tribes often spoke Guaran� in their home. Their children were monolingual in that tongue until they learned Spanish at school. By the 1980s, it appeared that a number of languages--Angait�, Guan�, and Mascoi-Toba among them-- might die out within the next generation. By contrast, a group of Mac'� who settled on the west bank of the R�o Paraguay under the patronage of General Juan Belaieff, whom they had assisted in the Chaco War, remained almost entirely monolingual in Mac'� except when engaged in commerce.

In the late 1970s, researchers estimated that more than half of all Indians lived on settlements under the auspices of various missionary organizations. This was particularly true of those groups whose first intensive contacts with Paraguayan society dated from the 1960s and 1970s. In the Chaco almost all Indians who were not scattered on individual ranches lived under the patronage of the missions.

Historically, official government policy had often left Indians to the care of religious groups. Until the 1960s, the government's only defined Indian policy was in the form of a 1909 law that enjoined Paraguay "to take measures leading to the conversion of the Indians to Christianity and civilization . . . ." Because the legislation permitted missionaries to acquire land for Indian settlements, some tribes were able to obtain land. At the same time, however, the law increased the tribes' dependence on missionaries as advocates in dealing with the larger society.

The missionaries offered the Indians under their care a measure of protection from the worst predations of rural Paraguayans. In some cases, mission educational programs taught in Indian languages offered the only hope that these tongues would be preserved at all. The impact of Christian proselytizing on indigenous belief and social institutions was less positive, however. Fundamentalist groups were particularly unrelenting in their efforts to eliminate indigenous beliefs. Anthropologists David Maybury-Lewis and James Howe noted that efforts to "crush witch doctors" drove a wedge between Christian and traditional believers within the same tribe. Critics charged that fundamentalist groups' aggressive proselytization destroyed Indian culture in the process of conversion.

Roman Catholics had the longest history of missionary activity. Their efforts were focused on protecting Indians from the worst effects of outside incursions, in particular forced removals from tribal lands. The philosophy of the Second Vatican Council (1962- 65) called for a process of gradual conversion that included respect for indigenous beliefs.

Anglicans had been active in the southeast Chaco since the turn of the century. By the late 1970s, the Lengua converts at the Anglican mission were generally in charge of running the settlement. The most serious problems came from overcrowding as more and more Indians displaced from elsewhere in the Chaco sought refuge at the mission.

Mennonites used Indians as a ready source of labor when they first settled in the central Chaco. As Mennonite-Indian relations became more complex, the Mennonites formed the Association of Indian-Mennonite Cooperative Services (Asociaci�n de los Servicios de Cooperaci�n Ind�gena-Mennonita--ASCIM) to proselytize and assist the Indians. As was the case with other mission settlements, the problems ASCIM faced grew as Indians forced off their lands elsewhere in the Chaco flocked to the Mennonite settlements. Although ASCIM had resettled about 5,000 Indians on their own land by the late 1970s, large numbers of landless people remained around Filadelfia, hoping for employment on Mennonite farms.

A number of secular and official organizations attempted to assist Indians over the years. Inspired by the indigenist movement that flourished in Latin America in the early twentieth century, middle- and upper-class Paraguayans founded the Indigenist Association of Paraguay (Asociaci�n Indigenista del Paraguay -- AIP) in the early 1940s. Over the years AIP campaigned for Indian rights and publicized the problems Indians faced. In the late 1970s and early 1980s, the association was active in sponsoring legal defense and regional development projects for the tribes of Eastern Paraguay and in drafting legislation that established Indi. Indi's mandate was to help Indians improve their legal status, especially in matters pertaining to employment and landholding. The efforts of Indi and other advocates for Indian rights resulted in enactment of legislation in 1981 that formally recognized the Indians' right to pursue their culture and way of life, stated that landholding was integral to the continued survival of Paraguay's Indians, and expanded the means through which communities could obtain formal legal status and title to their lands.


Paraguay - EDUCATION


Education in the colonial era was largely limited to the upper class. The wealthy either hired tutors or sent their children abroad. Although there were a few private schools in operation following the declaration of independence in 1811, they languished throughout most of the nineteenth century. The only secondary school closed in 1822. By the end of the War of the Triple Alliance, perhaps as little as 14 percent of the populace was literate.

Starting with the inauguration of the public secondary school system in 1877, public education grew steadily in the decades following the war. In 1889 the National University of Asunci�n was founded, and in 1896 the first teacher-training school began operation. By the eve of the Chaco War, there were several teachers' colleges, a number of secondary schools, and a few technical schools. The decades following the Chaco War were marked by widespread expansion of the educational system. Between the end of that war and the beginning of World War II, enrollments nearly doubled. They continued to expand in subsequent decades. Enrollments grew even faster at universities and secondary schools than at the elementary level.

Paraguay had two universities: the National University and the Catholic University. Both had branches in several interior cities. In the mid-1980s, about 20,000 students were enrolled in the National University and some 8,000 in the Catholic University. The number of applicants for university admission grew because of the growing numbers of students completing secondary school. In the mid-1970s, both universities began offering a variety of short-term degree programs in an effort to meet the increased demand for admission. The programs were designed to reduce pressure on traditional professional courses of study such as engineering, law, and medicine.

Formal education was under the direction of the Ministry of Education and Worship. The six-year cycle of primary school was free and compulsory for children from ages seven to fourteen. Secondary education consisted of two three-year programs, each leading to a baccalaureate degree. The diversified program emphasized training in the humanities and was preparatory to study at a university or teacher- training institute. The technical program was designed for students entering any of a number of postsecondary schools offering training in commerce, industry, or agriculture.

Schools were financed by the government and a variety of user sources. The Ministry of Education and Worship's budget represented slightly less than 15 percent of the government budget in the early 1980s. Virtually all of the costs of rural primary schools and nearly 90 percent of the costs of urban primary schools were covered by government funds. Public secondary schools received from half to three-quarters of their budget for current expenditures from the national government.

There was a perennial shortage of adequately trained teachers; this was especially true of rural teachers, who were often uncertified. Primary school teachers were required to complete a two-year postsecondary school training program. Secondary teachers were supposed to have an additional two years of specialized training. Curricula changes demanded extensive upgrading of teachers' skills. There were retraining programs available through the Higher Institute of Education and several regional centers.

Reforms in the 1980s attempted to make the educational system more responsive to the needs of the population. Rural Paraguayans had long faced a lack of educational facilities, materials, and teachers. The reforms attempted to meet some of these needs through multigrade programs designed to achieve a more efficient allocation of scarce resources. By the early 1980s, there were about 2,000 multigrade programs reaching more than 55,000 students.

Student enrollments increased at all levels during the 1970s and early 1980s. Overall enrollment grew nearly 6 percent per year in the late 1970s. The number of students enrolled in the basic cycle of secondary school grew from 49,000 in 1975 to 76,000 in 1980. The number of students attending primary school increased by roughly one-quarter during this period; rural school children, who historically had had very limited access to education, represented most of the increase. The number of rural children attending primary school increased by more than one-third between 1972 and 1981.

Despite the growth of school enrollments, the proportion of school-age children enrolled in classes actually remained constant or declined between 1965 and 1985. Only in higher education did enrollments grow faster than the school-age population.

In the mid-1980s, the official literacy rate was above 80 percent. More males than females were able to read and write, although literacy was increasing faster among females. About 90 percent of city dwellers could read; rural Paraguayans lagged behind their urban counterparts by about 10 percent.

Critics charged that the official literacy figures greatly overestimated the numbers who could actually read and write. They argued that the government counted as literate anyone who attended primary school--a dubious assumption given the large number of monolingual Guaran� speakers who entered but failed to complete elementary school. Such speakers represented an estimated 90 percent of the children entering rural primary schools. Many men who entered the armed forces as conscripts first learned to read during their military service.

In the early 1970s, less than 5 percent of those entering rural elementary schools finished this course of study, as compared to 30 percent of urban youngsters. Only 1 percent of rural children finished secondary school; the figure for city children was 10 percent. Rural schools also were plagued with high rates of student absenteeism and grade repetition. A 1980 survey showed a substantial improvement in the percentage of children completing the elementary school cycle. The figure for who completed their course of privacy school studies had risen to 38 percent. Although the completion rate for rural students climbed to 25 percent, this figure was substantially below that for urban youngsters.

In the late 1970s, the Ministry of Education and Worship attempted to deal with the crisis in rural education by developing a bilingual program for monolingual Guaran�. The program was designed to develop basic oral skills in Guaran� and oral and written skills in Spanish. Guaran� literature also was available at the secondary and university levels.




The Ministry of Public Health and Social Welfare was responsible for approving and coordinating all public and private activities and programs dealing with health. Other agencies involved in the health sector included the Social Insurance Institute, the Military Health Service, and the Clinical Hospital of the National University. Health services were organized through a system of four hierarchical levels, each of increasing complexity and sophistication. Health services at the first level aimed at providing basic care for the community. Intermediate levels offered services of greater complexity to towns and cities, whereas the fourth level provided specialized services to the entire nation.

Paraguay recorded impressive gains in health-care delivery in the 1970s and early 1980s. Following the government's launching of a massive immunization campaign in the late 1970s, the percentage of infants vaccinated against diphtheria, pertussis, tetanus, and measles went from 5 percent in 1977 to over 60 percent in 1984. From 1973 to 1983, the proportion of infants receivings medical care rose from 51 percent to nearly 75 percent, and prenatal care from 53 percent to nearly 70 percent. The supply of nurses relative to the population more than doubled between 1965 and 1981. By the early 1980s, surveys indicated that 60 to 70 percent of the populace had easy access to health care.

Despite these achievements, the health-care system was beset by a number of problems. First of all, the proportion of the national budget allocated to health decreased as a result of the economic downturn of the early 1980s. In addition, international health agencies noted a lack of coordination among the agencies and institutes whose work affected health. Mechanisms for gathering information about the delivery of health services were inadequate; even the reporting of vital events and infectious diseases was limited. Government health services also lacked many necessary supplies. Finally, the heavy concentration of doctors and other health providers in urban areas resulted in a shortage of personnel for rural residents.

In response to these problems, the government designed a broadly based program to augment community health organization and increase community participation. The program's objectives included upgrading the training of lay midwives, expanding health education, training traditional health practitioners and other volunteers, increasing the number of health centers in rural areas, and integrating health-care services with existing community organizations. Other priorities included lowering the morbidity and mortality rates among mothers and young children, controlling infectious diseases and diseases that could be checked through vaccination, and improving child nutrition.

The Sanitary Works Corporation (Corporaci�n de Obras Sanitarias- -Corposana) provided drinking water and sewage disposal services for towns of more than 4,000 inhabitants. The National Service for Environmental Sanitation (Servicio Nacional de Sanitaria Ambiental- -Senasa) provided the same services for smaller communities and also dealt with issues relating to national environmental health. By the mid-1980s, however, only 25 percent of the population had easy access to potable water. Like other health-related services, potable water was far more available in urban areas. About half the urban population had drinking water, whereas only 10 percent of rural residents did. Approximately half the population had access to sewage disposal services.

Sanitary conditions were not adequate to ensure proper food storage and processing. The main sources of contamination were unpasteurized milk and meat products processed in poorly refrigerated slaughterhouses.

Housing was rudimentary in much of the country; some 80 percent of Paraguayan homes were owner-built. Flooding along the country's major rivers (R�o Paraguay, R�o Paran�, and R�o Pilcomayo) and their tributaries in 1982 and 1983 destroyed much housing around Asunci�n and other river cities. Many residents continued to live in ramshackle huts years after the floods. Provision of services in such settlements was typically inadequate. The presence of rodents and insects represented a significant health risk.

In the late 1980s, life expectancy at birth was sixty-nine years for females and sixty-five for males--an increase of two years for each sex from 1965 to 1986. General mortality was 6.6 per 1,000 inhabitants in the mid-1980s. Experts projected the death rate to continue its decline to a low of approximately 5.2 per 1,000 inhabitants by the turn of the century. Heart and cerebrovascular diseases, diarrhea, cancer, and acute respiratory infections were the main causes of mortality among the population. The main infectious and parasitic diseases were malaria, Chagas' disease, diarrhea, and acute respiratory infections. Rabies was the most damaging of diseases transmitted by animals. In late 1987 Paraguay reported a total of seven known cases of acquired immune deficiency syndrome (AIDS), which had resulted in four deaths.

Although Paraguay recorded notable declines in its infant mortality rate (IMR) and postneonatal mortality rate in the early 1980s, significant regional disparities occurred. From 1981 to 1984, the IMR in Asunci�n declined by more than 25 percent; in contrast, the drop was less than 15 percent in the rest of the country. The picture for postneonatal mortality was similar: the rate in the capital declined by nearly 30 percent, whereas the rate for the rest of Paraguay fell only about 10 percent.

Through the mid-1980s, diarrhea, pneumonia, and malnutrition remained the principal threats to the health of infants and children. Among infants the death rate from malnutrition was 1.6 per 1,000; nearly 10 percent of early childhood deaths were caused by nutritional deficiencies.

In the late 1980s, Paraguay had a social security system that had been established and modified by laws in 1943, 1950, 1965, and 1973. The system, administered by the Social Insurance Institute, offered old-age pensions, invalidity pensions, survivor settlements, sickness and maternity benefits, and work-injury benefits for temporary or permanent disabilities to employed persons and to self-employed workers who elected voluntary coverage. Railroad, banking, and public employees had special systems. Both employers and employees contributed a percentage of salaries to fund the program. Employees generally contributed 9.5 percent of earnings (except, for example, pensioners who contributed only 5 percent, and teachers and professors, who contributed only 5.5 percent), employers 16.5 percent, and the government, 1.5 percent. The Social Insurance Institute operated its own clinics and hospitals to provide medical and maternal care.


Paraguay - The Economy


PARAGUAY IS A MIDDLE-INCOME COUNTRY that changed rapidly in the 1970s and 1980s as a result of hydroelectric development, agricultural colonization, construction, and cash crop exports. Nevertheless, the country's gross domestic product (GDP) in 1986 was approximately US$3.4 billion, or roughly US$1,000 per capita, ranking Paraguay only ahead of Bolivia among the Spanish-speaking countries of South America. Paraguay was the most agricultural economy of South America, and that sector influenced the performance of virtually every other sector of the economy.

Traditionally isolated and underpopulated, Paraguay was one of the last countries in Latin America to enjoy the region's rapid growth in the post-World War II period. Paraguay entered a phase of sustained economic growth in the late 1950s. Its economy grew at the fastest pace of all the Latin American countries during most of the 1970s as the Paraguayan-Brazilian project, Itaip�, the world's largest hydroelectric plant, was constructed. During that decade, cotton and soybeans came to dominate agriculture, mostly as a result of high export prices and agricultural colonization. Paraguay's economy also was characterized by a large underground sector, in which smuggling and contraband had become normal features by the 1970s.

The Paraguayan economic miracle of the 1970s came to a halt in 1982 because of the completion of construction at Itaip�, lower commodity prices for cotton and soybeans, and world recession. The economy recovered in 1984 and 1985, stagnated in 1986, and continued to expand in 1987 and 1988. Despite its rapid growth, the Paraguayan economy became increasingly dependent on soybeans and cotton for exports and overall economic dynamism. These two crops, however, remained subject to external price fluctuations and local weather conditions, both of which varied considerably.

Economic growth in the post-World War II period occurred in the context of political stability characterized by authoritarian rule and patronage politics. Government economic policies deviated little from 1954 to the late 1980s, consistently favoring a strong private-enterprise economy with a large role for foreign investment. Unlike most Latin American economies, in Paraguay import tariffs were generally low, fiscal deficits manageable, and exchange rates not overvalued. These trends faltered in the 1980s as the government took a more active part in industry, deficits rose, and the national currency was generally overvalued and devalued numerous times. Throughout the post-World War II era, Paraguay had no personal income tax, and government revenues as a percentage of GDP were among the lowest in the world.

Despite the sustained economic growth that marked the postwar period, the distribution of economic benefits was highly inequitable. Although GDP expanded rapidly in the 1970s, most economists estimated that income distribution worsened during the decade. Government spending on social services was particularly lacking. Paraguay's poverty was mostly a rural phenomenon, which increasingly involved competition for land in the eastern region near the Brazilian border, especially in the departments (administrative divisions) of Alto Paran�, Canendiy�, and Caaguaz�. Nonetheless, land tenure was not generally the acute social problem it was in many developing countries.

Although Paraguay faced significant obstacles to future economic development, it displayed extraordinary potential. Paraguay contained little oil and no precious metals or sea coasts, but the country was self-sufficient in many areas and was endowed with fertile land, dense forests, and swift rivers. The process of opening up the eastern border region to economic activity and continued agricultural expansion was expected to effect rapid changes in once-isolated Paraguay. Likewise, the development of a series of hydroelectric plants along the R�o Paran� linked Paraguay to its neighbors and provided it access to cherished energy resources and badly needed export revenues. Finally, road construction united different departments of Paraguay and provided the country its first access to the Atlantic Ocean via Brazil. These processes of infrastructure development, hydroelectric expansion, agricultural colonization, and a cash crop explosion allowed Paraguay by the late 1980s to begin to tap its potential.





Until the Spanish established Asunci�n in 1537, economic activity in Paraguay was limited to the subsistence agriculture of the Guaran� Indians. The Spanish, however, found little of economic interest in their colony, which had no precious metals and no sea coasts. The typical feudal Spanish economic system did not dominate colonial Paraguay, although the encomienda. System was established. Economic relations were distinguished by the reducciones (reductions or townships) that were established by Jesuit missionaries from the early seventeenth century until the 1760s. The incorporation of Indians into these Jesuit agricultural communes laid the foundation for an agriculture-based economy that survived in the late twentieth century.

Three years after Paraguay overthrew Spanish authority and gained its independence, the country's economy was controlled by the autarchic policies of Jos� Gaspar Rodr�guez de Francia (1814- 40), who closed the young nation's borders to virtually all international trade. Landlocked, isolated, and underpopulated, Paraguay structured its economy around a centrally administered agricultural sector, extensive cattle grazing, and inefficient shipbuilding and textile industries. After the demise of Francia, government policies focused on expanding international trade and stimulating economic development. The government built several roads and authorized British construction of a railroad.

The War of the Triple Alliance (1865-70) fundamentally changed the Paraguayan economy. Economic resources were employed in and destroyed by the war effort. Paraguay was occupied by its enemies in 1870; the countryside was in virtual ruin, the labor force was decimated, peasants were pushed into the environs of Asunci�n from the east and south, and the modernization of the preceding three decades was undone. Sleepy, self-sufficient Paraguay, whose advances in agriculture and quality of life had been the envy of many in the Southern Cone, became the most backward nation in that subregion.

To pay its substantial war debt, Paraguay sold large tracts of land to foreigners, mostly Argentines. These large land sales established the base of the present-day land tenure system, which is characterized by a skewed distribution of land. Unlike most of its neighbors, however, Paraguay's economy was controlled not by a traditional, landed elite, but by foreign companies. Many Paraguayans grew crops and worked as wage laborers on latifundios (large landholdings) typically owned by foreigners.

The late 1800s and the early 1900s saw a slow rebuilding of ports, roads, the railroad, farms, cattle stock, and the labor force. The country was slowly being repopulated by former Brazilian soldiers who had fought in the War of the Triple Alliance, and Paraguay's government encouraged European immigration. Although few in number, British, German, Italian, and Spanish investors and farmers helped modernize the country. Argentine, Brazilian, and British companies in the late 1800s purchased some of Paraguay's best land and started the first large-scale production of agricultural goods for export. One Argentine company, whose owner had purchased 15 percent of the immense Chaco region, processed massive quantities of tannin, which were extracted from the bark of the Chaco's ubiquitous quebracho (break-axe) hardwood. Large quantities of the extract were used by the region's thriving hide industry. Another focus of large-scale agro- processing was the yerba mat� bush, whose leaves produced the potent tea that is the national beverage. Tobacco farming also flourished. Beginning in 1904, foreign investment increased as a succession of Liberal Party (Partido Liberal) administrations in Paraguay maintained a staunch laissez-faire policy.

The period of steady economic recovery came to an abrupt halt in 1932 as the country entered another devastating war. This time Paraguay fought Bolivia over possession of the Chaco and rumors of oil deposits. The war ended in 1935 after extensive human losses on both sides, and war veterans led the push for general social reform. During the 1930s and 1940s, the state passed labor laws, implemented agrarian reform, and assumed a role in modernization, influenced in part by the leadership of Juan Domingo Per�n in Argentina and Get�lio Dornelles Vargas in Brazil. The 1940 constitution, for example, rejected the laissez-faire approach of previous Liberal governments. Reformist policies, however, did not enjoy a consensus, and by 1947 the country had entered into a civil war, which in turn initiated a period of economic chaos that lasted until the mid-1950s. During this period, Paraguay experienced the worst inflation in all of Latin America, averaging over 100 percent annually in the 1950s.

After centuries of isolation, two devastating regional wars, and a civil war, in 1954 Paraguay entered a period of prolonged political and economic stability under the authoritarian rule of Alfredo Stroessner Mattiauda. Stroessner's economic policies took a middle course between social reform, desarrollismo, and laissez-faire, all in the context of patronage politics. Relative to previous governments, Stroessner took a fairly active role in the economy but reserved productive activities for the local and foreign private sectors. The new government's primary economic task was to arrest the country's rampant and spiraling price instability. In 1955 Stroessner fired the country's finance minister, who was unwilling to implement reforms, and in 1956 accepted an International Monetary Fund ( IMF) stabilization plan that abolished export duties, lowered import tariffs, restricted credit, devalued the currency, and implemented strict austerity measures. Although the sacrifice was high, the plan helped bring economic stability to Paraguay. Labor unions retaliated with a major strike in 1958, but the new government, now firmly established, quelled the uprising and forced many labor leaders into exile; most of them remained there in the late 1980s.

By the 1960s, the economy was on a path of modest but steady economic growth. Real GDP growth during the 1960s averaged 4.2 percent a year, under the Latin American average of 5.7 percent but well ahead of the chaotic economy of the two previous decades. As part of the United States-sponsored Alliance for Progress, the government was encouraged to expand its planning apparatus for economic development. With assistance from the Organization of American States (OAS), the Inter-American Development Bank (IDB), and the United Nations Economic Commission for Latin America (ECLA), in 1962 Paraguay established the Technical Planning Secretariat (Secretar�a T�cnica de Planificaci�n--STP), the major economic planning arm of the government. By 1965 the country had its first National Economic Plan, a two-year plan for 1965-66. This was followed by another two-year plan (1967-68) and then a series of five-year plans. Five-year plans--only general policy statements--were not typically adhered to or achieved and played a minimal role in Paraguay's economic growth and development. Compared with most Latin American countries, Paraguay had a small public sector. Free enterprise dominated the economy, export promotion was favored over import substitution, agriculture continued to dominate industry, and the economy remained generally open to international trade and market mechanisms.

In an economic sense, the 1970s constituted Paraguay's miracle decade. Real GDP grew at over 8 percent a year and exceeded 10 percent from 1976 to 1981--a faster growth rate than in any other economy in Latin America. Four coinciding developments accounted for Paraguay's rapid growth in the 1970s. The first was the completion of the road from Asunci�n to Puerto Presidente Stroessner and to Brazilian seaports on the Atlantic, ending traditional dependence on access through Argentina and opening the east to many for the first time. The second was the signing of the Treaty of Itaip� with Brazil in 1973. Beyond the obvious economic benefits of such a massive project, Itaip� helped to create a new mood of optimism in Paraguay about what a small, isolated country could attain. The third event was land colonization, which resulted from the availability of land, the existence of economic opportunity, the increased price of crops, and the newly gained accessibility of the eastern border region. Finally, the skyrocketing price of soybeans and cotton led farmers to quadruple the number of hectares planted with these two crops. As the 1970s progressed, soybeans and cotton came to dominate the country's employment, production, and exports.

These developments shared responsibility for establishing thriving economic relations between Paraguay and the world's sixth largest economy, Brazil. Contraband trade became the dominant economic force on the border between the two countries, with Puerto Presidente Stroessner serving as the hub of such smuggling activities. Oblservers contended that contraband was accepted by many Paraguayan government officials, some of whom were reputed to have benefited handsomely. Many urban dwellers' shelves were stocked with contraband luxury items.

The Paraguayan government's emphasis on industrial activity increased noticeably in the 1970s. One of the most important components of the new industrial push was Law 550, also referred to as Law 550/75 or the Investment Promotion Law for Social and Economic Development. Law 550 opened Paraguay's doors even further to foreign investors by providing income-tax breaks, duty-free capital imports, and additional incentives for companies that invested in priority areas, especially the Chaco. Law 550 was successful. Investments by companies in the United States, Europe, and Japan comprised, according to some estimates, roughly a quarter of new investment. Industrial policies also encouraged the planning of more state-owned enterprises, including ones involved in producing ethanol, cement, and steel.

Much of Paraguay's rural population, however, missed out on the economic development. Back roads remained inadequate, preventing peasants from bringing produce to markets. Social services, such as schools and clinics, were severely lacking. Few people in the countryside had access to potable water, electricity, bank credit, or public transportation. As in other economies that underwent rapid growth, income distribution was believed to have worsened in Paraguay during the 1970s in both relative and absolute terms. By far the greatest problem that the rural population faced, however, was competition for land. Multinational agribusinesses, Brazilian settlers, and waves of Paraguayan colonists rapidly increased the competition for land in the eastern border region. Those peasants who lacked proper titles to the lands they occupied were pushed to more marginal areas; as a result, an increasing number of rural clashes occurred, including some with the government.

In the beginning of the 1980s, the completion of the most important parts of the Itaip� project and the drop in commodity prices ended Paraguay's rapid economic growth. Real GDP declined by 2 percent in 1982 and by 3 percent in 1983. Paraguay's economic performance was also set back by world recession, poor weather conditions, and growing political and economic instability in Brazil and Argentina. Inflation and unemployment increased. Weather conditions improved in 1984, and the economy enjoyed a modest recovery, growing by 3 percent in 1984 and by 4 percent in 1985. But in 1986 one of the century's worst droughts stagnated the economy, permitting no real growth. The economy recovered once again in 1987 and 1988, growing between 3 and 4 percent annually. Despite the economy's general expansion after 1983, however, inflation threatened its modest gains, as did serious fiscal and balance-of-payments deficits and the growing debt.




Fiscal Policy

In the 1970s, the government pursued cautious fiscal policies and achieved large surpluses on the national accounts, mainly as a result of the vibrant growth in the second half of the decade. By the early 1980s, there were growing demands for increased government expenditure for social programs. By 1983, the first fiscal year of increased government spending and the first full year of a recession, the government had entered into a significant fiscal crisis as the budget deficit reached nearly 5 percent of GDP (the deficit had been only 1 percent of GDP in 1980). In 1984 the government imposed austere measures to remedy national accounts. Cuts in current expenditures curtailed already meager social and economic programs. In addition, from 1983 to 1986, real wages of government employees were allowed to drop by 37 percent. Capital expenditures were cut back more seriously. Capital expenditures as a percentage of total expenditure dropped from 31 percent in 1984 to 10 percent by 1986. Austerity measures were successful in economic terms, and by 1986 budget deficits were under 1 percent of GDP. In 1986 the government announced a highprofile Adjustment Plan, which continued previous policies of expenditure cutbacks but also proposed more structural changes in fiscal and monetary policies. The most prominent of these was a proposal for the country's first personal income tax. Many observers characterized the plan as mainly rhetorical, however, citing the government's lack of political will to implement many of its proposals.

Despite the government's ability to control budgetary matters, fiscal policy faced two new and growing problems in the 1980s. The first was the poor financial performance of state-owned enterprises. The overall public-sector deficit, which reached 7 percent of GDP in 1986, had swelled in part because of the high operating costs of parastatals (state-owned enterprises), which accounted for 44 percent of the overall deficit in 1986. Rather than continually increasing the price of utilities and the services of parastatals, the government accepted the loss to avoid the inflationary pressures of increasing costs to consumers. This policy, however, was seen by critics as only a stopgap measure, short of more painful structural solutions, such as examining the financial viability of certain parastatals. The second growing fiscal problem in the 1980s directly involved the country's complex exchange-rate system. Created in July 1982, the multitiered system allowed a preferential exchange rate for the imports of certain government-owned companies. It was the Central Bank, however, that forfeited the losses involved in these exchange transactions, which were recorded as part of the overall public-sector deficit. In 1986 Central Bank losses of this kind accounted for nearly half of all the public sector's deficit. Again to avoid inflation, the government chose to maintain the multitiered system, at least in the short run.

Monetary Policy

In 1943 the guaran� replaced the gold peso (which had been pegged to the Argentine peso) as the national currency, laying the foundation for the country's contemporary monetary system. Guaran�es are issued exclusively by the Central Bank (Banco Central) in notes of 1, 10, 100, 500, 1,000, 5,000 and 10,000 and as coins of 1, 5, 10, and 50 guaran�es. One guaran� is worth 100 c�ntimos.

Changes in banking laws in the 1940s set the stage for the creation of the county's new Central Bank, which was established in 1952, replacing the Bank of Paraguay and the earlier Bank of the Republic. As the center of the financial system, the Central Bank was charged with regulating credit, promoting economic activity, controlling inflation, and issuing currency. As a result of the growth in the financial system, a new general banking law was introduced in 1973, authorizing greater Central Bank regulation of commercial banks, mortgage banks, investment banks, savings and loans, finance companies, and development finance institutions, among others. In 1979 the Central Bank also began to regulate the nations' growing capital markets.

The Central Bank also controlled monetary policy. One of the major aims of monetary policy in the 1980s was price stability. After experiencing extreme price instability--a familiar threat to the economies of the Southern Cone--in the 1940s and 1950s, Paraguay entered into two decades of price stability, credit expansion, economic growth, and a stable exchange rate. Inflation was only 38 percent in the 1960s, a dramatic turnaround from the 1,387-percent figure recorded during the previous decade. Although the rate climbed to 240 percent in the 1970s, it remained far below the postwar level. The pace of inflation accelerated in the 1980s, however, after the economic downturn in 1982. Inflation, as measured by Paraguay's consumer price index, reached an annual rate of 27 percent in 1986 and climbed to well over 30 percent in 1987. Government authorities wrestled with how to control inflation without implementing policies that could unleash even greater inflation and popular discontent. Although influenced by many factors, inflation in the 1980s was exacerbated by fiscal deficits, exchange-rate losses of the Central Bank, the exchange-rate system in general, the country's declining terms of trade, and the inflation of neighboring trading partners, Brazil and Argentina.

The Central Bank regulated the allocation of credit, the supply of credit, and the country's interest rate in an attempt to promote economic growth and restrain inflation. The Central Bank held considerable control over the national banking system, but many regulations were loosely enforced.

Exchange-Rate Policy

From 1960 to 1982, Paraguay enjoyed extraordinary exchange-rate stability as the guaran� remained pegged to the United States dollar at g126=US$1. After the virtual financial chaos of 1947-54, this stability was especially welcome in Paraguay. Although the country's exchange rate was overvalued in the 1970s, it was not until the 1982 recession that the government devalued the guaran�.

Exchange-rate policy in the 1980s came to be characterized by numerous devaluations and almost annual changes in the number of exchange rates employed. In early 1988 five exchange rates were in use, making exchange-rate policy very complicated. The first rate of g240=US$1 was used for the imports of certain state-owned enterprises and for external debt service payments. The second rate of g320=US$1 was applied to petroleum imports and petroleum derivatives. The third rate of g400=US$1 was reserved for disbursements of loans to the public sector. The fourth rate of g550=US$1 was used for agricultural inputs and most exports. The fifth rate, the only one not set by the Central Bank, was a freemarket rate set by the commercial banks. The free-market rate, which was applied to most of the private sector's nonoil imports, exceeded g900=US$1 by 1988. Exchange-rate adjustments were expected to continue in the late 1980s.

One of the most distinctive and complex features of the nation's exchange-rate policy was a system of official minimum export prices for selected agricultural commodities. The system, called Aforo, was essentially a way of guaranteeing foreign-exchange earnings to the Central Bank. Aforo values, assessed by the government immediately before a harvest or slaughter, designated the minimum prices exporters should receive for the goods and determined what percentage of foreign-exchange earnings must be turned over to the Central Bank. The difference between the Aforo price and the actual price was traded in the free-exchange market. In 1987 the official export rate for Aforos was g550=US$1, whereas the free-market rate was upwards of g900=US$1. Lower Aforos generally made Paraguayan exporters more competitive but guaranteed less revenue to the Central Bank. Aforos were one of several government policies that fueled contraband trading.

As the manipulation of Aforos demonstrated, exchange-rate policy was an important economic policy tool of the Paraguayan government and directly affected most sectors of the economy. Although the government ostensibly intended to reduce the gaps among the various tiers of the exchange rate, it was reluctant to reunify the rates in fear of greatly speeding inflation. Paradoxically, however, the multitiered exchange-rate system increased inflationary pressures in numerous indirect ways. One of its most important effects was the fall in Central Bank reserves associated with the exchange-rate subsidies for parastatals, a policy that created a growing publicsector deficit. Likewise, Central Bank losses encouraged a more expansionary monetary policy, most notably through rediscounting rates. An overvalued exchange rate also hampered export growth in general, which in turn aggravated Paraguay's balance-of-payments deficits and potentially its external debt.


Paraguay - LABOR


Paraguay's labor force surpassed 1.4 million in 1986, or approximately 37 percent of the country's estimated population. Government statistics recorded an unemployment rate of 14 percent in 1986, but that figure dropped to 8 percent in 1987. Estimates of unemployment varied widely outside Paraguayan government circles. For example, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) estimated unemployment as high as 18 percent in 1986 with as much as 50 percent underemployment in urban areas. Males dominated the official labor force, accounting for 79 percent of registered workers. Women were visibly a much higher percentage of the work force than official statistics reflected. But, unlike in most Latin American countries, Paraguay's female labor force was not growing faster than the male labor force; males were expected to continue to constitute a disproportionate share of the labor force for some time to come.

Statistics on the distribution of labor by economic sector in 1987 showed 48 percent of workers in agriculture, 31 percent in services, and 21 percent in industry. Males dominated agricultural labor, whereas women were most prominent in the services sector. The country maintained the highest percentage of labor in agriculture in all of South America and one of the lowest services percentages on the continent. Nevertheless, according to data from the IDB, a large portion of the labor force in Asunci�n was in the informal sector, generally in services. In fact, Asunci�n ranked second among Latin American cities in the percentage of labor force in the informal sector.

Unlike most Latin American countries, the distribution of Paraguay's labor force had changed little in thirty-five years. In 1950 agriculture comprised 55 percent of the labor force, services 25 percent, and industry 20 percent. The greatest fluctuations within economic sectors during the 1980s occurred in the construction industry, which was directly affected by hydroelectric development. After the end of Itaip�'s construction phase in the early 1980s, observers estimated that the number of construction workers dropped from 100,000 to 25,000, but they expected that the start-up of construction at the Yacyret� hydroelectric project would restore many of those jobs.

Comprehensive labor laws had been passed since 1961, but they were not universally enforced. Laws theoretically regulated maximum hours to be worked per week, child labor, union activities, female labor, maternity leave, holidays, and social security and established a minimum wage. Minimum wages, in effect since 1974, were set by the Labor Authority according to geographic location and task performed. Minimum wages in the 1970s and 1980s did not keep pace with inflation, and the real minimum wage was eroding. The real wages of the work force at large, however, eroded even more quickly than minimum wages over the same period. Employees typically worked from 6:00 A.M. to 8:00 P.M. with an almost universal midday siesta.

Organized labor provided the best example of the loose enforcement of labor laws. Although the country's labor laws permitted free association by labor unions, most labor movements had been thwarted by the government since 1958, the year of a major strike by the Paraguayan Confederation of Workers (Confederaci�n Paraguaya de Trabajadores--CPT). There was a growing independent workers' movement developing in the 1980s, which was fueled mostly by dissatisfaction with the declining real wage of the Paraguayan worker. Nonetheless, unionized labor remained dominated by the CPT, which was generally more progovernment than prolabor and rarely challenged government policy.




Throughout Paraguay's history, agriculture has been the mainstay of the economy. This trend continued unabated in the late 1980s as the agricultural sector generally accounted for 48 percent of the nation's employment, 23 percent of GDP, and 98 percent of export earnings. The sector comprised a strong food and cash crop base, a large livestock subsector, and a vibrant timber industry.

Growth in agriculture was very rapid from the early 1970s to the early 1980s, a period when cotton and soybean prices soared and cropland under cultivation expanded as a result of agricultural colonization. Growth in agriculture slowed from an average of 7.5 percent annual growth in the 1970s to approximately 3.5 percent in the mid- to late 1980s. Agricultural output was routinely affected by weather conditions. Flooding in 1982 and 1983 and severe droughts in 1986 hurt not only agriculture, but, because of the key role of the sector, virtually every other sector of the economy as well.

In the aggregate, however, the advances experienced by the sector during the 1970s and 1980s did not reach many of the small farmers, who continued to use traditional farming methods and lived at a subsistence level. Despite the abundance of land, the distribution of the country's farmlands remained highly skewed, favoring large farms. Epitomizing the country's economic activity in general, the agricultural sector was consolidating its quick expansion over the two previous decades and only beginning to tap its potential in the late 1980s.

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Paraguay - Land Tenure


The history of land tenure in Paraguay is distinct from that in most Latin American countries. Although there had been a system of land grants to conquistadors, Paraguay was distinguished by Jesuit reducciones that dominated rural life for over a century. After the expulsion of the Jesuits in 1767 and later the Spanish, the state had become the owner of 60 percent of the country's land by the mid-1800s. Large tracts of land were sold, mostly to Argentines to pay the country's war debt from the War of the Triple Alliance. This was the beginning of the concentration of land in Paraguay not in the hands of the Spanish or of a local elite but rather of foreign investors. Land policy remained controversial until the 1930s, when there was a broader consensus for the titling of land to users of the land and mediating between latifundio and minifundio (small landholding). After 1954 multinational agribusinesses, mostly Brazilian and American, played an increasing role in the economy, often purchasing enormous tracts of land devoted to raising cattle, cotton, soybeans, and timber.

The most recent data on land tenure was the agricultural census of 1981, which followed earlier major agricultural censuses of 1956 and 1961. The most striking change from 1956 to 1981 was the kind of ownership of the farms. In the 1956 census, 49 percent of all farmers squatted on their land compared with only 30 percent in the 1981 census. This data suggested an increasing interest on the part of small farmers in obtaining title to their land in the face of growing land pressures. The 1981 census also indicated that 58 percent of all farms were owned outright and 15 percent were sharecropper farms; the 1956 census showed that 39 percent of farms belonged to farmers and 12 percent were worked by sharecroppers.

Another striking element of the 1981 agricultural census was the great disparity between small and large landholdings. According to the census, 1 percent of the nation's more than 273,000 farms covered 79 percent of the nation's farmland in use. These large farms had an average landholding of almost 7,300 hectares. Many of the largest holdings were cattle farms in the Chaco region. By contrast, the smallest farms, which made up 35 percent of all farms, covered only 1 percent of the land, making the average size of a minifundio 1.7 hectares, or less than was necessary for one family's subsistence. Still, the 1981 census figures were somewhat more encouraging than those in the 1956 census, which showed that 1 percent of farms covered 87 percent of the land, and 46 percent of farms covered only 1 percent of the farmland. Another encouraging trend that the census quantified was the declining number of farms under 5 hectares in size and the growth of small to medium-size farms (5 to 99.9 hectares).

Despite these positive trends, the 1981 census pointed to an increasing problem of landlessness. Census figures indicated that roughly 14 percent of all peasants were landless. Landlessness historically had been mitigated by the undeveloped nature of the eastern border region. Because the owners of estates in the region used only a portion of their holdings, peasants could squat on the properties without retribution. Land pressures also were alleviated by the vast tracts of untitled land in the east. Beginning in the 1960s, however, competition for land in the area increased dramatically. Many estate owners sold their lands to agribusinesses; the new proprietors, who were committed to an efficient and extensive use of their holdings, sometimes called upon the government to remove squatters from the lands.

Squatters also came into competition with Paraguayan colonists and Brazilian immigrants. Thousands of colonists were resettled in the eastern region under the government's agrarian reform program. The Brazilian immigration occurred as a result of a dramatic increase in land prices in the 1970s in the neighboring Brazilian state of Paran�. Many farmers sold their properties and crossed into Paraguay, where land was much cheaper. By the late 1980s, at least half of the population in the departments of Canendiy� and Alto Paran� was Brazilian.


Paraguay - Land Reform and Land Policy


After decades of public controversy over government land policy, two important agrarian laws were enacted in 1963 that guided land policy through the late 1980s. The Agrarian Statute, as the laws were called, limited the maximum size of a single landholding to 10,000 hectares in Eastern Paraguay and 20,000 hectares in the Chaco, with landholdings in excess of this size subject to taxes or possible purchase. This law, however, like many of the laws involved in economic policy, was enforced only loosely or not at all. A more fundamental component of the Agrarian Statute was the creation of the Rural Welfare Institute (Instituto de Bienestar Rural--IBR). The IBR, which superceded the Agrarian Reform Institute, became the central government agency mandated to plan colonization programs, issue land titles to farmers, and provide new colonies with support services such as credit, markets, roads, technical assistance, and other social services as available. From 1963 to the late 1980s, the IBR titled millions of hectares of land and created hundreds of colonies, directly affecting the circumstances of roughly one-quarter of the population. In the late 1980s, the IBR remained the key government agency, along with the Ministry of Agriculture and Livestock, in serving the land needs of small farmers.

Although the IBR played an important role in stimulating the celebrated "March to the East," the exodus from Paraguay's central zone to the eastern border region that began in the 1960s was a spontaneous process. The task of the IBR was so enormous and its resources so limited that many of the country's farmers bypassed the institute in order to participate in the eastward land grab. Thousands of Paraguayans took it upon themselves to trek eastward to the abundant, fertile, but forested land of Alto Paran�, Itap�a, and other eastern departments. Many of the colonists were pioneers in the truest sense, clearing densely forested areas for farming mostly by axe. Few farmers had access to institutional credit, and these newly colonized areas generally lacked schools, roads, and other amenities.


Paraguay - Land Use


Paraguay comprises a total of 40.6 million hectares of land. But based on soil surveys, analysts have estimated that only one-fifth of that area is appropriate for normal crop production. According to the 1981 agricultural census, 7 percent of the land was dedicated to crop production, 20 percent to forestry, 26 percent to livestock, and 47 percent to other purposes. These figures indicated the great agricultural potential that remained in Paraguay in the late 1980s. One of the most important trends in Paraguayan agriculture was the increase in the percentage of land under cultivation, which had been only 2 percent in 1956. Livestock activity fluctuated greatly during the 1970s and 1980s but generally had increased, rising above the 22-percent land use reported in 1956. The improved utilization of agricultural resources resulted from increased colonization, favorable price movements for cash crops, further mechanization, and infrastructural improvements connecting produce with markets.

For agricultural purposes, the country can be divided into three regions: the Chaco, the central region, and the eastern region. The semiarid Chaco contained extensive grazing land that supported 40 percent of the country's livestock. Although the Chaco region covered 60 percent of the country's land mass, it contained only 3 percent of the population and accounted for less than 2 percent of crop production. With the exception of the Mennonite colonies in the central Chaco, there was little crop activity. A more suitable location for crops was the central region in the vicinity of Asunci�n, where traditional crop production had dominated since peasants were pushed toward the capital at the end of the War of the Triple Alliance. But government policies since the 1960s had favored breaking up minifundios in the central region and establishing larger, more efficient farms in the fertile eastern border region, which is endowed with rich, varied soils, well distributed annual rainfalls, and millions of hectares of hardwood forests. Together these regions cover some 16 million hectares, 40 percent of the country's land and approximately 98 percent of the country's crop land. Agricultural surveys in the east, the new focus of agricultural activity, have determined that 30 percent of the region is suitable for intensive agriculture, 40 percent for livestock, 20 percent for moderate agriculture or livestock use, and 10 percent for forestry.

The country's land use changed rapidly in the 1970s and 1980s as foreign investment, Paraguayan and Brazilian colonists, the construction of Itaip�, favorable commodity prices, and new infrastructure all contributed to the penetration of the dense eastern region. Increased prices for soybeans and cotton beginning in the early 1970s changed the Paraguayan landscape more drastically than any other factor. By the late 1980s, cotton and soybeans accounted for over 1.1 million hectares, or over 40 percent of all land in crops and contributed over 60 percent of exports. Although government policies favored export crops, the rapid expansion of cash crops was largely a direct response that Paraguay's free-market economy made to the rise in the international demand for these products.


Paraguay - Crops


Export Crops

Soybeans had replaced cotton as the country's most important crop by the 1980s. A relatively new crop for Paraguay, soybeans were not produced in any quantity until 1967, when they were introduced as the summer rotation crop in a national plan for selfsufficiency in wheat. After soybean prices nearly tripled in 1973, however, much of the land slated for wheat was sown with soybeans instead. As the lucrative nature of soybean cultivation and processing became apparent, several large agribusinesses from Brazil, the United States, and Italy engaged in large-scale, commercial production of soybeans and soybean oil. It is difficult to exaggerate the drastic growth soybeans enjoyed in Paraguay. In 1970 soybeans covered only 54,600 hectares and had an annual production of over 75,000 tons. By 1987 soybeans covered some 718,800 hectares, more than any other crop, with an annual output of 1 million tons and export revenues of approximately US$150 million. The soybean crop grew primarily in the newly colonized departments of Itap�a, Alto Paran�, Canendiy�, and Amambay. Soybeans were produced principally for the world market anf sold both as a raw bean and as a processed oil, which was also consumed locally. Soybean prices generally rose beginning in 1970s but experienced significant fluctuations in the early to mid-1980s before recovering in the late 1980s. The major constraint on growth in soybean output, besides price fluctuations, was the lack of storage, drying facilities, and local processing capacity.

Cotton was one of Paraguay's oldest crops, grown since the time of the Jesuit missions. The government encouraged cotton production after the crop was nearly wiped out by the War of the Triple Alliance. Cotton was especially suited to the Paraguayan climate and soils and was grown primarily by small farmers in the central region. Cotton farming also experienced extremely rapid growth in the 1970s and 1980s. In 1970 only 46,900 hectares were sown with cotton, producing a volume of over 37,000 tons. By 1985, however, 385,900 hectares were covered with cotton, yielding almost 159,000 tons. Those figures had dropped to 275,000 hectares and 84,000 tons during the drought of 1986. Foreign-owned, large-scale, commercial production in the eastern border region was surpassing central region production in the late 1980s. Despite the advances in cotton production, cotton cultivation in the 1980s was still characterized by low yields and a low technological level. Even more so than soybeans, cotton suffered wide price fluctuations, and many small farmers who came to rely on cotton revenues in the 1970s became vulnerable to external price fluctuations in the following decade. Some cotton fiber was used domestically, but about 80 percent of the country's crop was processed into cotton lint at more than ten textile-processing factories. Cotton exports in 1987 earned about US$100 million, with most exports going to Uruguay, Britain, France, the Federal Republic of Germany (West Germany), and Japan.

Another key export crop was tobacco. Used domestically for centuries, cigarettes and cigars also earned foreign exchange. During parts of the early 1900s, tobacco was Paraguay's principal agricultural export to Western Europe. Tobacco production slowed in the 1970s with the advent of massive soybean and cotton production. Another reason for the tobacco crop's decline was the inability of the domestic cigarette factories to improve quality control and compete with smuggled brands. Wide price fluctuations of tobacco also explained dwindling production. Despite these difficulties, tobacco made a slight recovery in the 1980s. The area cultivated rose from 7,600 hectares in 1980 to over 8,000 hectares in 1987. Output increased from 11,500 to 12,000 tons. Tobacco was grown throughout Paraguay, mostly by small farmers. Cigarettes and cigars were exported to Argentina, France, and Spain. Tobacco exports were valued at approximately US$9 million in 1987.

Coffee was another export crop but of much less importance. Cultivated since the times of the Jesuits, coffee was grown in the central and eastern border regions for local and export markets. Most modern coffee production methods derived from the practices of German colonists in the eastern region. Coffee production boomed in the late 1970s but waned in the early 1980s. In the late 1980s, coffee output rose again, following a pattern of fluctuating production based on price movements. In 1987 approximately 9.2 million hectares of coffee yielded 18.4 million tons of exports with an estimated value of US$44.7 million.

Sugarcane remained an important cash crop for small farmers in the late 1980s. Unlike many countries in the Western Hemisphere, Paraguay saw sugarcane as a crop of the future, not because of its use for refined sugar and molasses, but as an input to ethanol, an increasingly popular energy alternative for the country. Sugarcane was planted in Paraguay as early as 1549 with seedlings from Peru, and sugar had been exported since 1556. After the devastation of Paraguay's two major wars, however, local output did not meet domestic demand until the mid-1900s, after which exports were revived. Since then, sugar production has fluctuated with price changes but generally has increased. Paraguay's climate is appropriate for sugarcane cultivation, but traditional methods and inefficient small-scale production limited harvests. Besides low yields, the industry suffered from outdated milling facilities and high production costs. Sugar production, however, was expected to be modernized and increasingly commercialized as a result of its high government priority as an input to an alternative energy source. Some 65,000 hectares of sugarcane produced 3.2 million tons of sugar in 1987, including 7,500 tons of sugar exports valued at US$2.3 million. These figures were highs for the decade.

Numerous crops were grown partially or entirely for their value as exported processed oils. Oilseeds represented one of Paraguay's largest agro-industries. One of Latin America's largest oilseed exporters, Paraguay processed cottonseed, soybean, peanut, coconut, palm, castor bean, flaxseed, and sunflower-seed oils. Industrial countries in particular consumed oilseeds as a lower-priced substitute for more traditional oils, which also were higher in cholesterol. Some oil was used locally as well. Paraguay also produced a number of nonvegetable oils, such as tung oil and petitgrain oil. Tung oil, derived from tung nuts, was used as a drying agent in paints. Petit-grain oil, derived from Paraguay's bitter oranges, was used in cosmetics, soaps, perfumes, and flavorings. In the 1980s Paraguay remained one of the world's leading exporters of petit-grain oil.

Food Crops

Manioc (cassava), maize, beans, and peanuts, the four basic crops of the Guaran� Indians, were still the country's major food crops in the 1980s. Manioc, the staple of the Paraguayan diet, had been cultivated in nearly every area of the country for centuries. Called mandioca in Paraguay, the root crop was the main starch of the diet. Manioc did not experience the rapid explosion of cultivation that cotton, soybean, and maize did. Nevertheless, manioc yields ranked as some of the best in Latin America. In 1986 about 220,000 hectares produced 3.4 million tons of manioc. These figures compared favorably with 1976 data, which recorded 106,500 hectares producing 1.6 million tons.

Maize, or was Paraguay's most rapidly growing food crop. From the early 1960s to the late 1980s, corn output multiplied rapidly, covering more hectares than any crop except soybeans. After the doubling of both hectares cultivated and total output in the 1970s, corn production accelerated even further in the 1980s, mostly because of continued agricultural colonization. In 1980 approximately 376,600 hectares yielded 584,700 tons of corn, compared with an unprecedented 547,000 hectares of corn in 1987, which harvested 917,00 tons. Like manioc, maize was grown throughout the country, but the departments of Itap�a, Paraguar�, Caaguaz�, and Alto Paran� were responsible for most of the harvest. White corn was the traditional corn of Paraguay, but yellow, highyield hybrids were increasingly common, especially on larger farms. Most corn went to domestic human consumption; roughly a third of domestic corn consumption took place in the form of feed grain for the livestock sector. In addition, some surplus corn was exported to Brazil and Argentina, depending on weather conditions and annual output.

Other principal food crops included beans, peanuts, sorghum, sweet potatoes, and rice. Many types of beans were grown in Paraguay, including lima beans, french beans, and peas. Since the 1970s, however, bean production had been declining because of the profitability of other crops. Peanuts, a traditional though marginal crop, expanded in the 1970s and 1980s and often were intercropped with cotton. Peanuts also were processed as an oilseed. Sorghum, a drought-resistant crop, was grown primarily as feed for livestock and was considered a potential crop for the arid Alto Chaco. Sweet potatoes, another main staple crop, like many other food crops, did not expand significantly in the 1970s, and harvests contracted measurably in the 1980s. Rice production, by contrast, expanded after high-yield varieties were introduced in the 1960s. Rice is not a dietary staple in Paraguay as it is in many Latin American countries, but it is popular and consumed in ever-greater quantities. Self-sufficient in rice, Paraguay showed potential as a regional exporter because of its rich soils and irrigation potential along the R�o Paran�.

After attempting for twenty years to become self-sufficient in wheat production, Paraguay reached wheat self-sufficiency in 1986. For two decades, the government's national wheat program had encountered numerous obstacles: seeds inappropriate for Paraguay's climate, skyrocketing prices for alternative crops, poor weather, blight infection, and a lack of proper farming practices. From 1976 to 1986, however, the number of hectares covered with wheat multiplied some sixfold, from 24,200 to over 140,000. Wheat output reached 233,000 tons in 1986, 33,000 tons above national consumption. In 1987 approximately 175,000 hectares of wheat fields yielded 270,000 tons, a record high. Over half of all wheat was grown in Itap�a, where most soil testing, tractors, and fertilizers were used. Despite the rapid expansion, wheat production in the 1980s was hurt by floods, droughts, and cheap contraband, all of which caused flour mills to operate at about half of capacity. Smuggled Brazilian flour sometimes was half the price of Paraguayan flour. Future growth in the wheat industry was constrained by a lack of adequate grain-cleaning and storage facilities.

Paraguayans cultivated numerous other fruits, vegetables, and spices for both domestic consumption and export. Most common were citrus fruits, which were ideal for Paraguay's subtropical and tropical climate. Paraguay also produced pineapples, which according to some sources originated in Paraguay, and peaches, which were farmed commercially by fruit companies from the United States. Bananas, plums, strawberries, pears, avocados, guavas, papayas, mangoes, grapes, apples, watermelon, and other melons were cultivated to varying degrees as well. Vegetable production included gourds, squash, tomatoes, and carrots. Onions and garlic were widely grown and commonly used in cooking.

A uniquely Paraguayan crop was the yerba mat� plant. Yerba mat� was grown throughout the country--especially Eastern Paraguay -- for both domestic and regional markets. Large-scale production was traditionally dominated by Argentine and British interests. Despite its popularity, yerba mat� output fell significantly in the 1970s and 1980s, as farmers switched to more lucrative crops.

Paraguay was also believed to be an expanding producer of marijuana in the 1980s. One United States Congressional report in the 1980s estimated annual production at 3,000 tons.


Paraguay - Livestock


Raising and marketing livestock, a traditional source of livelihood in Paraguay, remained a major segment of agriculture and the economy at large during the 1980s. Livestock output accounted for roughly 30 percent of agricultural production and about 20 percent of the sector's exports. The raising of livestock represented more than a quarter of total land use and 80 percent of all capital investment in agriculture. Paraguay's vigorous livestock sector also was responsible for the country's high per capita production and consumption of meat and dairy goods. It was estimated that 40 percent of the country's land was especially suited for livestock and some 20 percent generally suitable. Endowed with plentiful grazing lands, Paraguay had vast potential for livestock development.

After the importation of 7 cows and a bull by the Spanish in the mid-1550s, the country's cattle herds swelled to some 3 million head by the time of the War of Triple Alliance, the largest herds in the Southern Cone. As with every other sector of the Paraguayan economy, the war devastated the country's livestock sector, leaving only 15,000 head. It was not until World War I that domestic demand was met locally and significant exports left the country. By the end of World War II, beef exports had become a major foreignexchange earner. Beef production and exports fluctuated considerably in the postwar period because of international price movements, weather conditions, government pricing policies, and other factors. In 1987 the country's cattle herd stood at about 8 million head with an annual slaughter rate of 1 million head. In that same year, 75 percent of the slaughter went to the domestic market and the remaining 25 percent to the export market.

Cattle, mostly beef cattle, were found throughout the countryside. The Chaco region was best known for its contribution to cattle raising because of its lack of crops and its sprawling ranches. Nevertheless, the cattle population density of Eastern Paraguay, 0.6 head per hectare, was actually higher than that of the Chaco region, 0.3 head per hectare.

The country's breeding stock was primarily Spanish criollo, although over the years considerable crossbreeding with English breeds and zebu cattle from Brazil had taken place. Although cattle were numerous in Paraguay, the country lacked a sufficient number of pure-bred breeding cattle. The livestock sector also suffered from a low calving percentage, a high mortality rate, and a long fattening period for steers. Artificial insemination was increasingly common. To a certain extent, cattle raising reflected the disparities in agriculture in general. There were numerous farmers who owned only a few head of relatively unproductive cattle that were slaughtered for the local market under relatively poor sanitary conditions. By contrast, extremely large cattle ranches typically were owned by expatriates and butchered more productive animals for both national and international markets.

Seventy slaughterhouses for the domestic market and eight for the export market operated in the 1980s. Local slaughterhouses often could not pass sanitary inspections, but government inspection efforts were focused on improving quality control of exports to meet the stringent regulations of foreign beef markets. The country's beef exports expanded until 1974, when Paraguay lost access to European Economic Community (EEC) markets and lower world prices further stagnated output. Beef exports responded strongly but erratically in the 1980s as the government's minimum export price system and contraband activity undercut greater export efforts. For example, beef exports were a mere 3,100 tons in 1985, 48,000 tons in 1986, and 18,000 tons in 1987, the last being the more typical figure. The 1986 boom in beef exports was the direct result of beef shortages in Brazil caused by price controls under its "Cruzado Plan." Paraguay's principal export markets were Brazil, Peru, Chile, the EEC (specialty items only), Colombia, Uruguay, and Saudi Arabia. Missing from official 1987 data, however, was the unregistered sale of an estimated 300,000 head of cattle along the Brazilian border.

Official government policy favored strong cattle development and exports, a view articulated in national livestock programs since the early 1960s. A major policy tool to promote livestock growth was the FG. The FG was not only the major lender to the industry, but it also provided certain veterinary equipment and medicine, encouraged quality control in meat and dairy products, and operated a model farm in the Chaco.

Dairy cattle represented only a small fraction of the total herd. Most milk production occurred at an estimated 400 dairy farms in Asunci�n, Puerto Presidente Stroessner, Encarnaci�n, and Filadelfia. The best yields came from holstein-friesian dairy cattle followed by crossbreeds and criollo. High feed costs and the general inefficiency of small dairy farmers slowed the growth of the industry. The country produced approximately 180 million liters of milk a year in the late 1980s.

Other livestock activity including poultry farming and the swine industry. Some of the most productive poultry farming took place in the Mennonite colonies, in Japanese colonies in the eastern border region, and in the greater Asunci�n area. Observers estimated that there were over 14 million chickens, 400,000 ducks, 55,000 turkeys, and several other types of fowl. Egg production stood at 600 million per year in the late 1980s and was growing at about 4 percent a year. Pig farming was a relatively minor activity, engaged in mostly by small farmers. The pork industry's greatest structural problems were the high cost of feed and consumer preferences for beef. Government policy emphasized self-sufficiency in feed grown on small pig farms. Paraguay's swine population amounted to roughly 1.3 million in the late 1980s and had grown at a rate of 6 percent a year in the first half of the decade.


Paraguay - Forestry and Fishing


Forestlands constituted approximately one-third of Paraguay's total area. Utilized for fuelwoods, timber exports, and extracts, the country's wooded areas constituted a key economic resource. Approximately half of all woodlands contained commercially valuable timber. In the 1980s about 4 million hectares were being lumbered commercially. Forestry data was only a broad estimate, however, as a full third of timber production was believed to be exported illegally to Brazil. Registered forestry exports accounted for about 8 percent of total exports during most of the 1980s. Forests have played an important role in the economy since the 1800s with the processing of yerba mat� and the resilient quebracho. Because of a general decline in tannin exports, however, the quebracho played a correspondingly less important role in forestry.

Officially, Paraguay produced over 1 million cubic meters of lumber a year in the 1980s. Trees were processed at over 150 small, mostly outdated sawmills that produced wood products for the paper, cardboard, construction, and furniture industries and for export. Trees also fueled the country's railroad and largest steel mill. The country's woodlands contained over forty-five species of wood suitable for export, but fewer than ten species were exported in quantity. Paraguay was recognized as an exporter of fine timber, and its wood exports were internationally competitive. In 1987 lumber exports to Argentina, Brazil, and Mexico earned US$50 million in foreign exchange.

Despite the abundance of premium forests, deforestation was progressing at an alarming rate, about 150,000 to 200,000 hectares per year. The rapid depletion of Paraguay's woods was caused by the clearing of virgin forests associated with agricultural colonization, the farming practice of land-clearing and treeburning , and the felling of trees for charcoal and the other fuelwoods that accounted for 80 percent of household energy consumption.

Although the country contained enormous installed energy capacity, fuelwood remained the most important domestic source of energy in the 1980s. In fact, Paraguay's per capita consumption of fuelwood was the highest in all of Latin America and the Caribbean and nearly three times the level of other South American countries. The deforestation question was complicated by the distribution of forestlands and population. Southeast Paraguay was being deforested the most rapidly. From the mid-1970s to the mid-1980s, that region's forestland decreased from just under 45 percent of all land to 30 percent. The Chaco maintained a large number of forestlands and shrubs, but they could not be economically exploited.

Government policy was slow to respond to deforestation because of the traditional abundance of forests as well as the generally laissez-faire dynamics of the land colonization process. In 1973 the government established a National Forestry Service under the Ministry of Agriculture and Livestock to protect, conserve, and expand the country's forests. The service, however, was hindered by a lack of resources, staff, serious government initiatives, and public education on the problem of deforestation. The planting of fast-growing trees and modernization of the lumber industry were recommended by the government, but only about 7,000 hectares of new forests were seeded annually in the mid-1980s. Given these levels of deforestation and reforestation, analysts estimated that few commercial lumbering lands would be available by the year 2020.

For landlocked Paraguay, fishing was only a minor industry. It focused on more than 230 freshwater fish species in the country's rivers and streams. Only fifty or so species of fish were eaten, dorado and pac� being the most popular. Some fishing companies, mostly family operations, maintained boats, refrigeration facilities, and marketing outlets.


Paraguay - ENERGY


Massive capital investments in hydroelectric projects along Paraguay's river borders with Brazil and Argentina in the 1970s and 1980s were the most salient characteristic of the country's energy sector and the economy at large. Although not a traditionally significant part of the national economy, the energy sector became an important contributor to the country's balance of payments as Paraguay prepared to become the world's largest exporter of electricity in the 1990s. The rapid growth in energy investment in the 1970s rippled throughout the nation's economy, stimulating the explosive growth of the eastern border region. The construction industry derived the greatest benefits from the hydropower projects, but the manufacturing, agricultural, and transportation sectors also gained from the sudden growth in the east. Paraguay was expected to surpass the United States in the mid-1990s as the world's leader in per capita installed electricity.

Commercial energy represented only one-third of total energy consumption, mostly imported petroleum for the transportation sector. Paraguay was 100 percent dependent on foreign oil. Oil exploration had taken place sporadically since the 1940s, but no significant petroleum deposits had been found by 1988. Paraguay, however, was the most unexplored country in South America in terms of petroleum. Paraguay was increasingly experimenting with renewable alternatives to fossil fuels, such as sugar-based ethanol, an octane enhancer. Mining accounted for only 0.4 percent of GDP in 1986.

<> Itaip�, Yacyret�, and Corpus


Paraguay - Itaip�, Yacyret�, and Corpus


Only superlatives adequately describe the grandeur of the Itaip� hydroelectric power plant. Itaip� was the world's largest hydroelectric power plant, located on one of the world's five largest river systems. Itaip�'s cost was estimated at US$19 billion, but no exact figure was calculated. The plant's dam, small compared to those at some hydroelectric plants, nonetheless required the diversion of the entire R�o Paran�, including the permanent flooding of the spectacular Guair� Falls and of some 235,000 hectares of land. Over a 5-year period, the concrete poured each day would have been sufficient to construct a 350-story building. More importantly, the project created an "Itaip� euphoria" that brought jobs to 100,000 Paraguayans, instilled a renewed pride in the country, and strengthened the nations's image vis-�-vis its giant neighbor and largest economic partner, Brazil.

The Itaip� project began with the signing of the Treaty of Itaip� between Paraguay and Brazil on April 26, 1973. The treaty created a binational authority--Itaip� Binacional--to see that the two countries shared equally in the plant's operation. Itaip� provided Paraguay unprecedented employment opportunities and capital investment, but inadequate planning on the part of the government and the private sector hindered the country's ability to reap the project's full potential. Approximately 80 percent of the plant's construction was performed by local Paraguayan-Brazilian industry. Because the Paraguayan parliament demanded early on that Paraguay receive a fair share of the project's work, Paraguay was officially earmarked for 50 percent of all major contracts. In reality, Paraguay's small industrial sector was no match for Brazil's more technologically advanced industries. Observers believed that Brazilian companies actually rendered 75 percent of the total workload and provided almost all the key inputs such as steel, cement, machinery, and special technical expertise. Even housing materials for Paraguayan construction workers were smuggled in from Brazil.

After five years of labor, the R�o Paran� was diverted, and from 1978 to 1982 key construction was completed on the plant, dam, and spillways. Brazil's serious economic problems in 1983 and 1984 slowed the completion of the dam, but overall delays were reasonable by regional standards. Electricity was first generated on October 25, 1984, more than a decade after the signing of the treaty.

Electrical operations were slowly developing at Itaip� in the late 1980s, and full capacity was not expected to be reached until 1992. Because of delays in Brazil's sixty-cycles-per-second system, the plant's fifty-cycle units were the first to produce commercially, and this electricity went to Paraguay. Itaip� was so colossal, however, that ANDE could process only about 30 percent of the output of 1 of Itaip�'s 18 generators at peak output. As stipulated in the treaty, Brazil and Paraguay bought their electricity from the binational power facility at predetermined rates. Because Paraguay was expected to use only a tiny fraction of its power for the foreseeable future, it sold most of its share back to Brazil, also at a predetermined rate, including normal compensation and royalties.

The major debate over Itaip� in the late 1980s revolved around the low prices that Paraguay had negotiated in the original treaty. What Brazil paid Paraguay for electricity was one-ninth what Paraguay was scheduled to receive from Argentina under the Treaty of Yacyret�, signed just seven months after Itaip�. After twelve years of indecision about how to adjust the Treaty of Itaip�, on January 25, 1985, Paraguay and Brazil signed five revisions to cover matters of financial compensation. Paraguay gained significantly from the 1985 revisions, but most analysts believed Paraguay deserved still greater compensation for its electricity. Further revisions were likely before the end of the century.

The Yacyret� project, although generally overshadowed by the colossal Itaip� project, was one of Latin America's major publicsector projects in the 1980s. Established hastily by Argentina's Peronist government on December 13, 1973, the Yacyret� project was stalled for years as a consequence of regional maneuvering, lobbying by the Argentine nuclear and oil industries, and political instability in Argentina. After ten years of delays, the first major engineering contract finally was awarded in June 1983. As with Itaip�, Yacyret� was hindered by the general lack of physical infrastructure at the dam site. Also as with Itaip�, Paraguayan firms did not receive equal work, despite stipulations in the initial agreement. Construction of the dam and the hydroelectric plant continued throughout the 1980s, but the major construction phase did not begin until the late 1980s, and numerous delays-- mostly political--persisted. Yacyret� was not expected to become fully operational until the mid-1990s, more than twenty years after the treaty's signing and at a cost of as much as US$10 billion, five times the original calculation.

An early point of contention between Paraguay and Argentina was the percentage of each country's land that would be flooded for the project's dam; more than 1,690 square kilometers would be needed--a larger area than was flooded for Itaip�. It esd sgreed that flooding was to be just about equally divided. Another disagreement involved Paraguay's exchange-rate policies. Exchange rates determined the final price Argentina would pay for the plant's electricity. This issue continued to be negotiated in the late 1980s.

When completed, Yacyret� would be roughly one-quarter of the size of Itaip�, with an initial installed capacity of 2,700 megawatts and an annual generation capacity in excess of 17,500 gigawatt hours. Yacyret�'s electricity per unit would be more expensive to generate than Itaip�'s, and the unit price Paraguay would eventually receive was expected to be much greater. None of the electricity produced by Yacyret� was intended for use by Paraguayans; it was to be sold back to a binational body that would manage the plant. But the gearing up of key construction activity at Yacyret� in the late 1980s was expected to give a boost to the Paraguayan economy, which was suffering from what one observer termed the "post-Itaip� blues." Observers believed that the Argentine-Paraguayan project would provide renewed construction jobs, large capital inflows, and eventually badly needed foreignexchange revenues. The binational project also would provide seriously needed bridges, highways, improved river transport at the port of Encarnaci�n, and even increased irrigation potential for nearby rice fields.

Located midway between Itaip� and Yacyret� on the R�o Paran� was the proposed site of the Corpus hydroelectric power plant. After years of preparations, Corpus remained in the planning stage in the late 1980s because of the slow progress at Yacyret�. Hydrologically linked with Itaip� and Yacyret�, the Corpus plant was designed to make optimal use of the falls at Itaip� and the currents of tributary rivers. In order to integrate and maximize the various projects along the R�o Paran�, in October 1979 Paraguay, Argentina, and Brazil signed the Itaip�-Corpus Accord, which set specific regulations for the projects and improved communication among the countries. Although planning was still not final in 1988, Corpus was expected to be comparable in size to Yacyret�. When operable, Corpus would raise Paraguay's electricity output to an estimated 300 times its domestic demand. Beyond Corpus, Argentina and Paraguay also planned several smaller hydroelectric power plants downstream from Yacyret�, including Itat�-It�-Cor� and others. Future hydroelectric development along the river would continue to be coordinated by the Combined Technical Commission for the Development of the R�o Paran�.


Paraguay - Oil


Paraguay imported 100 percent of its oil in the late 1980s. Oil was imported primarily from Algeria because Paraguay's only petroleum refinery was designed for "Saharan blend" oil. The refinery, located at Villa Elisa, had a 7,500-barrels-per- day capacity, very small by Latin American standards. Paraguay's refinery capability was limited in terms of products, causing the country to import high-priced derivatives such as aviation fuel, premium gasoline, and asphalt. The price of oil was high because of the complex transportation required through Argentina on the R�o Paran� and R�o Paraguay. Paraguayan Petroleum (Petr�leos Paraguayos--Petropar)--owned 60 percent by the government and 40 percent by the private firm Paraguayan Refinery (Refiner�a Paraguaya)--imported all of the country's petroleum. Petropar was generally viewed as a profitable and well-managed enterprise. Esso Standard (Exxon), Paraguay Shell, and the Paraguayan company Copetrol marketed all petroleum products to the public with the exception of diesel and fuel oil, which were sold by Petropar.

Paraguay became increasingly concerned with its oil dependence following the quadrupling of world oil prices in the autumn of 1973. Although there was enough growth in other sectors of the economy to offset the negative consequences, the crisis nonetheless rekindled the interest of policy makers in oil exploration. As a result, the legislature passed sweeping new regulations to promote oil exploration by multinational companies. Despite having some of the most liberal petroleum legislation in the world, Paraguay's limited prospects and severe lack of infrastructure in the Chaco dissuaded most companies from drilling, however. Indeed, from 1944 to 1986 only forty-three wells had been drilled in Paraguay.

Foreign firms conducted petroleum exploration under the supervision of the Ministry of Public Works and Communications. Most oil exploration in the 1980s took place in Carandayty Basin on Paraguay's western border with Bolivia and in the Curupaity, Pirity, and Pilcomayo basins bordering Argentina. Active exploration in Bolivia near its border with Paraguay and oil discoveries in Argentina only fifteen kilometers from Paraguay's border heightened expectations of oil discoveries in Paraguay. Because of Paraguay's complicated geology, however, oil exploration was more difficult than originally anticipated and required sophisticated Brazilian technology. With or without oil discoveries, the government was contemplating the construction of an oil pipeline to Brazilian ports to import oil, or, in the case of a large oil discovery, to transport oil exports.


Paraguay - INDUSTRY


Industry, especially the manufacturing sector, historically was linked to agricultural processing until the 1970s, when the construction of hydroelectric plants and new industrial incentives began to broaden the industrial base. Industry was composed principally of manufacturing and construction. Paraguay had no real mining sector, but the manufacture of construction materials included limited mining activity. Manufacturing and construction in the economy in the late 1980s remained dependent on developments in other sectors, such as agriculture and energy, for their growth. Although industry was becoming more visible in Paraguay in the 1980s, industry's share of GDP actually declined in the 1970s and 1980s because of more rapid growth in agriculture.


Manufacturing accounted for 16.3 percent of GDP in 1986 and employed roughly 13 percent of the labor force, making Paraguay one of the least industrialized nations in Latin America. Manufactured exports, by most definitions, accounted for less than 5 percent of total exports; when semiprocessed agricultural products were included, however, that figure reached 77 percent. The growth of the country's manufacturing industries was hampered by numerous structural obstacles. These included a small internal market, limited physical infrastructure, costly access to seaports, a historical lack of energy production, and the openness of Paraguay's economy to the more industrialized economies of Brazil and Argentina. Another significant factor was the ubiquity and profitability of smuggling operations, which encouraged importing and reexporting rather than production.

Paraguay's earliest manufacturing industries processed hides and leather from its abundant cattle and tannin from quebracho trees. Small-scale manufacturing, especially textiles, flourished under the Francia dictatorship, when the nation's borders were closed. The War of the Triple Alliance, however, devastated what little industry and infrastructure the country had, causing Paraguay to enter the twentieth century as an almost completely agricultural society. Land sales to foreigners stimulated increased agricultural processing in the early twentieth century, including meat packing and the processing of flour, oilseeds, sugar, beer, and pectin extract. After the early 1900s, small-scale manufacturing in all subsectors grew at a slow, but steady pace, with some of the fastest growth occurring because of the shortages during World War II.

The government's role in promoting industry increased in the postwar era, and in 1955 the Stroessner government undertook the country's first industrial census. Over the next twenty years, the government enacted a number of industrial incentive measures, the most important of which was Law 550. Law 550 promoted exportoriented industries or those that would save foreign exchange. It also provided liberal fiscal incentives for companies to develop specific areas of the country, especially the departments of Alto Paraguay, Nueva Asunci�n, Chaco, and Boquer�n. Incentives for business were related mostly to import-duty exemptions, but they included a variety of tax breaks and placed no restrictions on foreign ownership. Approximately one-fourth of all new manufacturing investment from 1975 to 1985 was registered under Law 550. Most foreign investments originated from Brazil, West Germany, the United States, Portugal, and Argentina in that order of importance. The dynamic processes of agricultural colonization and hydroelectric development, combined with such attractive industrial incentives, caused manufacturing to grow at an unprecedented rate in the late 1970s and early 1980s.

Unlike many other Latin American governments, which followed an import-substitution industrial policy, the Paraguayan government had played a minimalist role in the economy through most of the postwar era, curtailing import tariffs and maintaining a realistic exchange rate. In the 1980s, however, Paraguay's exchange rate became overvalued and several state-owned heavy industry plants became operational.

In the late 1980s, the major subsectors of manufacturing were food, beverages, and tobacco; textiles, clothing, leather, and shoes; wood and related products; and chemicals, petroleum, and plastics. Despite some increases in heavy industry in the economy during the 1970s and 1980s, Paraguayan industry was generally small-scale. Manufacturing production remained focused on consumer goods, and capital goods comprised under 5 percent of industrial output. In fact, in the 1980s Paraguay did not contain even one of Latin America's 1,000 largest companies, at least some of which were found in most other countries in the region. Virtually every subsector of Paraguay's manufacturing was characterized by numerous small- to medium-sized firms and a few large firms, which often were foreign owned. Most companies operated well below their capacity.

The food, beverages, and tobacco subsector has been the core manufacturing activity throughout Paraguay's history. In the late 1980s, this subsector continued to dominate, accounting for about 45 percent of industrial activity, depending on agricultural output in a given year. Agro-processing involved a large number of small, inefficient, and often family-run firms as well as a small number of large, efficient, and usually foreign-owned firms. The larger firms produced only the most lucrative items, such as oilseeds, meats, and various beverages, often for export. Some of the most common small-scale producers manufactured milled items, baked goods, sugar and molasses, dairy products, candy, manioc flour, vinegar, coffee, and tobacco. Along with raw agricultural produce, processed and semiprocessed food generated nearly all of the country's exports in the late 1980s. But, as with other manufacturing subsectors, the profitability of the food subsector often was impaired by contraband items from Brazil and Argentina, such as flour, meat, or dairy products. Paraguayan goods crossed borders unofficially, as well, thus lowering official exports.

The second most important manufacturing activity also relied on agricultural inputs for its base. Utilizing Paraguay's rich endowment of hardwood trees, the wood subsector represented about 15 percent of all industrial activity and contributed over 8 percent of exports in the 1980s. The most voluminous wood export was lumber, which was produced by hundreds of small sawmills throughout the central and eastern border regions. In addition to saw wood, mills also produced a variety of milled wood, plywood, chipboard, and parquet flooring. Although the country cut and processed only a fraction of its hundreds of species, Paraguayan wood was known for its quality. The country also contained several small paper companies and one large paper and cardboard factory located at Villeta.

Textiles, clothing, leather, and shoes comprised the third largest manufacturing subsector. These industries were traditional, grounded in the nation's abundance of inputs like cotton fibers, cattle hides, and tannin extract. The subsector accounted for about 10 percent of all manufacturing. The textile industry performed spinning, weaving, and dyeing operations and produced finished fabrics that amounted to over 100 million tons in 1986. Most fabrics were derived from cotton fibers, but a growing number of synthetic and wool fibers also were produced. Textile production provided inputs to approximately sixty clothing firms that operated under capacity and were generally inefficient. As with so many other manufacturers, clothing companies met stiff competition from widespread unregistered imports, which often originated in Asia and typically entered across the Brazilian border. The leather industry was characterized by 200 or so small tanneries dotting the Paraguayan countryside. In addition, many medium and two large tanneries fashioned leather goods. The leather industry operated at only about 40 percent of capacity, however. The shoe industry comprised a few hundred small workshops and a dozen or so mediumsized firms, which produced some 5 million pairs of leather and synthetic shoes a year.

The processing of petroleum, chemicals, and plastics repreated an increasing activity. In the late 1980s, this subsector represented less than 5 percent of industrial activity, but its share of manufacturing output was expanding because of the growth of heavy industry in Paraguay, especially industry related to the energy sector. The country also produced fertilizers, industrial gases, tanning chemicals, varnishes, and detergents. In 1987 a group of Japanese investors was considering the construction of a new fertilizer plant with a 70,000-ton capacity per year. Since the early 1980s, ethanol was being produced in large quantities, and the government was considering producing methanol. Also processed were paints, soaps, candles, perfumes, and pharmaceuticals. One of Paraguay's fastest growing industries was the new, relatively modern plastics subsector, which supplied a wide variety of goods to the local market.


Paraguay - Government


ON FEBRUARY 14, 1988, General Alfredo Stroessner Mattiauda was elected for his eighth consecutive term as president of the Republic of Paraguay. Stroessner, the candidate of the National Republican Association-Colorado Party (Asociaci�n Nacional Republicana-Partido Colorado), officially won 88.7 percent of the vote. At the time of the election, the president was seventy-five and in his thirty-fourth year of rule. He had held power longer than any other Paraguayan and was five years ahead of Cuba's Fidel Castro Ruz for longevity in office in the hemisphere. Among contemporary international leaders, only Kim Il Sung of the Democratic People's Republic of Korea (North Korea) and Todor Zhivkov of Bulgaria had been in power longer. When Stroessner first took office in August 1954, Juan Domingo Per�n was president of Argentina, Getulio Dornelles Vargas was president of Brazil, and Dwight D. Eisenhower was president of the United States.

Stroessner's enduring power was based on the twin pillars of the armed forces and the Colorado Party. The former--from which he emerged and in which he maintained positions as commander in chief of the armed forces and commander in chief of the army--provided the institutional base for order and stability. The latter, of which he wrested control in the mid-1950s, furnished the links with large sectors of society, provided for mobilization and support, and allowed him to legitimate his rule through periodic elections. The overall system, based on these two institutional pillars, functioned through a combination of coercion and cooptation involving a relatively small sector of the population in the slightly industrialized and partly modernized country.

As Stroessner and the enduring small group of supporters around him aged, the regime was increasingly unable to respond to popular demands to begin a transition toward democracy, despite much speculation in the mid-1980s that change was in the air. The demands for change originated from a variety of sources, both foreign and domestic. As the neighboring republics of Argentina, Bolivia, Brazil, and Uruguay underwent political transitions from authoritarian to democratic regimes in the early 1980s, Paraguay was often considered with Chile, on the far side of the Andes, the only remaining analogous regime in South America. Pressure from these new democracies for a similar transition in Paraguay was low; however, in the 1980s the United States was clearly in favor of a political opening for a peaceful transition in the post-Stroessner era. Support for democracy with broad participation, as well as a pointed critique of the Stroessner regime's human rights policies, also were prominent in the speeches of Pope John Paul II during his visit to Paraguay in May 1988.

In addition to the external isolation and foreign pressure, there were important internal pressures for a transition. After very high rates of economic growth in the 1970s, Paraguay's economy stagnated in the 1980s. In addition, the external debt nearly doubled during the same period. Within Paraguay the major opposition political parties, which had formed a National Accord (Acuerdo Nacional) in 1979, began to promote public demonstrations in April 1986. This growing, heterogeneous movement was joined in its opposition by other organizations and movements, including the Roman Catholic Church and sectors of business, labor, and university students.

Despite these pressures, Stroessner was once again nominated by the Colorado Party for the 1988 election, although the nomination split the party into a number of competing factions. The state of siege declared by Stroessner in 1954 was finally lifted in April 1987, but opposition politicians and leaders of movements were arbitrarily arrested, meetings broken up, and demonstrations violently repressed. With the closing of the daily ABC Color in March 1984, the weekly El Pueblo in August 1987, and Radio �andut� in January 1987, of the independent media, only the Roman Catholic Church's Radio Caritas and its weekly Sendero remained. Under these conditions, most opposition parties advocated abstention or blank voting in the elections. The church also registered its reservations on the validity of the elections by admitting the acceptability of blank voting.

Paraguay had had barely two years of democratic rule by law in its entire history. It lacked any tradition of constitutional government or liberal democracy to serve as a reference point. Traditionally, out-of-power groups had proclaimed their democratic commitment but repressed their opponents when they took over the reins of power. Thus, a transition to democracy for Paraguay would not mean a return to a previous status, as in the case of its neighbors, but rather the creation of democracy for the first time.





Constitutional Development

The Republic of Paraguay is governed under the Constitution of 1967, which is the fifth constitution since independence from Spain in 1811. The Constitutional Governmental Regulations approved by Congress in October 1813 contained seventeen articles providing for government by two consuls, Jos� Gaspar Rodr�guez de Francia and Fulgencio Yegros. The framers also provided for a legislature of 1,000 representatives. Recognizing the importance of the military in the embattled country, the framers gave each consul the rank of brigadier general and divided the armed forces and arsenals equally between them. Within ten years, however, both Yegros and the legislature had been eliminated and Francia ruled until his death in 1840.

In 1841 Francia's successor, Carlos Antonio L�pez, asked the legislature to revise the constitution. Three years later, a new constitution granted powers to L�pez that were as broad as those under which Francia had governed. Congress could make and interpret the laws, but only the president could order that they be promulgated and enforced. The constitution placed no restrictions on the powers of the president beyond limiting his term of office to ten years. Despite this limitation, Congress subsequently named L�pez dictator for life. He died in 1862 after twenty-one years of unchallenged rule.

At the end of the disastrous War of the Triple Alliance (1865- 70), a Constituent Assembly adopted a new constitution in November 1870, which, with amendments, remained in force for seventy years. The constitution was based on principles of popular sovereignty, separation of powers, and a bicameral legislature consisting of a Senate and a Chamber of Representatives. Although its tenor was more democratic than the two previous constitutions, extensive controls over the government and the society in general remained in the hands of the president.

In 1939 President Jos� Felix Estigarribia responded to a political stalemate by dissolving Congress and declared himself absolute dictator. To dramatize his government's desire for change, he scrapped the constitution and promulgated a new one in July 1940. This constitution reflected Estigarribia's concern for stability and power and thus provided for an extremely powerful state and president. The president, who was chosen in direct elections for a term of five years with reelection permitted for one additional term, could intervene in the economy, control the press, suppress private groups, suspend individual liberties, and take exceptional actions for the good of the state. The Senate was abolished and the Chamber of Representatives limited in power. A new advisory Council of State was created, modeled on the experience of corporatist Italy and Portugal, to represent group interests including business, farmers, bankers, the military, and the Roman Catholic Church. The military was responsible for safeguarding the constitution.

After taking power in 1954, President Stroessner governed for the next thirteen years under the constitution of 1940. A constituent assembly convoked by Stroessner in 1967 maintained the overall framework of the constitution of 1940 and left intact the broad scope of executive power. Nevertheless, it reinstated the Senate and renamed the lower house the Chamber of Deputies. In addition, the assembly allowed the president to be reelected for another two terms beginning in 1968.

The Constitution of 1967 contains a preamble, 11 chapters with 231 articles, and a final chapter of transitory provisions. The first chapter contains eleven "fundamental statements" defining a wide variety of topics, including the political system (a unitary republic with a representative democratic government), the official languages (Spanish and Guaran�), and the official religion (Roman Catholicism). The next two chapters deal with territory, civil divisions, nationality, and citizenship. Chapter four contains a number of "general provisions," such as statements prohibiting the use of dictatorial powers, requiring public officials to act in accordance with the Constitution, and entrusting national defense and public order to the armed forces and police, respectively.

Chapter five, with seventy-nine articles, is by far the longest section of the Constitution and deals in considerable detail with the rights of the population. This chapter purportedly guarantees the population extensive liberty and freedom, without discrimination, before the law. In addition to the comprehensive individual rights, spelled out in thirty-three articles, there are sections covering social, economic, labor, and political rights. For example, Article 111 stipulates that "The suffrage is the right, duty, and public function of the voter. . . . Its exercise will be obligatory within the limits to be established by law, and nobody can advocate or recommend electoral abstention." The formation of political parties is also guaranteed, although parties advocating the destruction of the republican regime or the multiparty representative democratic system are not permitted. This chapter also specifies five obligations of citizens, including obedience to the Constitution and laws, defense of the country, and employment in legal activities.

Chapter six identifies agrarian reform as one of the fundamental factors for the achievement of rural well-being. It also calls for the adoption of equitable systems of land distribution and ownership. Colonization is projected as an official program involving not only citizens but also foreigners.

Chapters seven through ten concern the composition, selection, and functions of the legislature, executive, judiciary, and attorney general, respectively. Chapter eleven discusses provisions for amending or rewriting the Constitution. The final chapter contains transitory articles, the most important of which states that for purposes of eligibility and reeligibility of the president, account will be taken of only those terms that will be completed since the presidential term due to expire on August 15, 1968. The only constitutional amendment, that of March 25, 1977, modifies this article to allow the president to succeed himself without limit.

The Executive

The Constitution of 1967 states that government is exercised by the three branches in a system of division of powers, balance, and interdependence. Nonetheless, in the late 1980s the executive completely overshadowed the other two, as had historically been the case in Paraguay. The president's extensive powers are defined in Article 180. He is commander in chief of the armed forces and officially commissions officers up to and including the rank of lieutenant colonel or its equivalent and, with the approval of the Senate, the higher ranks. The president appoints, also with the Senate's consent, ambassadors and other officials posted abroad and members of the Supreme Court. Judges at other levels also are named by the president following the Supreme Court's approval. The president selects the attorney general after consulting the Council of State and with the approval of the Senate. The president also appoints lower level public officials, including the rector of the National University, the heads of the Central Bank and the National Development Bank, and the members of the Rural Welfare Institute (Instituto de Bienestar Rural--IBR) and the National Economic Council. The Constitution has no provision for impeachment by the National Congress of either the president or his ministers.

Only the president can appoint and remove cabinet ministers and define functions of the ministries that they head. The Constitution does not limit the maximum number of ministries but stipulates that there must be at least five. In 1988 there were ten ministries. These were--ranked according to total expenditures for 1987-- national defense; education and worship; interior; public health and social welfare; public works and communications; agriculture and livestock; finance; foreign relations; justice and labor; and industry and commerce.

The president also names the members of the Council of State, the nature of which is defined under Articles 188 through 192 of the Constitution. The Council of State is composed of the cabinet ministers, the archbishop of Asunci�n, the rector of the National University, the president of the Central Bank, one senior retired officer from each of the three services of the armed forces, two members representing agricultural activities, and one member each from industry, commerce, and labor. The last five members are selected from within their respective organizations and their names submitted to the president for consideration. All are appointed and removed by the president. The Council meets periodically during the three months that the National Congress is in recess and can meet at other times should the president so request. Its function is to render opinions on topics submitted by the president, including proposed decree laws, matters of international politics or of an economic or financial nature, and the merits of candidates proposed for the position of attorney general. Nonetheless, the Council is generally not consulted on important policy decisions.

In addition to the powers already stipulated, the president has the right to declare a state of siege as defined in Articles 79 and 181. The state of siege provision, which was also part of the constitution of 1940, empowers the president to abrogate constitutional rights and guarantees, including habeas corpus, in times of internal or external crises. Within five days of a state of siege, the president must inform the National Congress of the reasons for it, the rights that are being restricted, and its territorial scope, which may include the whole country or only a part. Article 79 stipulates that the state of siege can be only for a limited period. Nonetheless, when Stroessner came into power in 1954, he declared a state of siege and had it renewed every three months for the interior of the country until 1970 and for Asunci�n until 1987.

The National Congress also granted Stroessner complete discretion over internal order and the political process through supplemental legislation, including the Law for the Defense of Democracy of October 17, 1955, and Law 209, "In Defense of Public Peace and Liberty of Person," of September 18, 1970. The latter, formulated in response to perceived guerrilla threats, significantly strengthens the executive's hand in dealing with political challenges.

In addition to the powers derived from the Constitution, the president also has the right of ecclesiastical patronage. Under the terms of a concordat with the Vatican, the state is expected to maintain the property of the Roman Catholic Church and support the clergy, in return for which the president nominates candidates for all clerical offices, including parish priests. Although the president's nominations are not strictly binding on the Holy See, historically there has been little tendency to ignore his preferences.

In order to be eligible for the presidency, an individual must be a native Paraguayan, at least forty years of age, Roman Catholic, and characterized by moral and intellectual features qualifying him for the position. The president is chosen for a five-year term in direct general elections that must be held at least six months before the expiration date of the incumbent's term. The term of office begins on August 15, with the first term having begun in 1968. There is no provision for a vice president. In the event of the president's death, resignation, or disability, Article 179 provides for convocation of the National Congress and Council of State within twenty-four hours to designate a provisional president. If at least two years of the term have elapsed, the provisional president serves out the full term of five years. If fewer than two years have elapsed, elections are to be held within three months, and the successful candidate is to complete the five-year term of office.

The Legislature

The National Congress is a bicameral legislature, consisting of a popularly elected Senate and Chamber of Deputies. The Constitution stipulates that the Senate have at least thirty members and the Chamber of Deputies sixty, plus alternates. In the 1988 general elections, thirty-six senators and twenty-one alternates were elected as well as seventy-two deputies and fortytwo alternates. The alternates serve in the place of the senators or deputies in the case of death, resignation, or temporary disability. The two houses meet in regular sessions every year from April 1 to December 20. Special sessions may be convened outside this period by the president, who may also extend the regular sessions. Members of both houses must be native-born Paraguayans; whereas deputies need be only twenty-five years of age, senators must be at least forty. Members of the clergy and armed forces officers on active duty may not be elected to the National Congress. Also prohibited are those affiliated with a commercial enterprise that operates a public service or has obtained a concession from the government. Members of both houses are elected for five-year terms coinciding with terms served by the president. There is no restriction concerning reelection.

The functions of the National Congress are stipulated in the twenty-one items of Article 149 and include the following: the enactment, amendment, and repeal of laws; the establishment of political divisions of the country and municipal organizations; the authorization for contracting loans in connection with banking, currency, and exchange matters; the annual enactment of the national budget; the approval or rejection of treaties, conventions, and other international agreements; the granting of amnesty; the formulation of electoral laws; and the approval, modification, or refusal of decree laws. The Senate and Chamber of Deputies have different specific functions. The former deals primarily with the ratification of treaties and national defense, the approval of nominations to other organs, and, on the initiative of the Chamber, the judgment of members of the Supreme Court of Justice for possible removal from office. The Chamber is concerned primarily with fiscal or tax issues and bills concerning electoral and municipal matters.

The Constitution, in articles 168 through 170, provides for a Standing Committee of the National Congress. Before adjourning in December, the National Congress appoints from among its members six senators and twelve deputies to act until the following session as the Standing Committee. This committee elects its own officers and may conduct a valid session with the presence of a simple majority of its members. The Standing Committee has the power to ensure that the Constitution and its laws are observed; to receive the returns on the election of the president, senators, and deputies and pass them on to the National Congress; to convoke sessions to examine election returns on senators and deputies so that the National Congress may meet at the proper time; and to exercise any other powers assigned to it by the Constitution.

All bills submitted to the National Congress by the executive are discussed and acted upon in the same session, unless they have been returned because of lack of time to consider them. If the executive objects to a bill or part of a bill, it is returned to the chamber of origin, which studies the objections and states its judgment. When this action has been taken, the bill is sent to the other chamber for the same purpose. If both chambers uphold the original sanction by an absolute majority vote, the executive branch must promulgate it. If the two chambers disagree on the objections, however, the bill is not reconsidered in that session of the National Congress. Any bill completely rejected by the executive may be considered again at the same session of the National Congress only by an affirmative vote of a two-thirds majority of both chambers. In that case, the bill is reconsidered, and, if an absolute majority is obtained again in the two chambers, it is promulgated by the executive. If a bill that has been approved by one chamber is totally rejected by the other, it returns to the former for reconsideration. If the chamber of origin ratifies it by an absolute majority, it goes again to the chamber that reviews it, and that body can reject it again only by a twothirds absolute majority. If such a majority has not been obtained, the bill is considered sanctioned. If the chamber that reviews a bill approved by the chamber of origin does not act upon it within three months, that chamber is considered to have given the bill a favorable vote, and it is forwarded to the executive to be promulgated.

In practice, the legislature is controlled tightly by the executive. The president sets the legislative agenda and provides most of the bills considered by the National Congress. When the National Congress passes one of the bills submitted by the executive, it does so in general terms as a broad grant of power, leaving it to the executive to "issue rules and instructions" for the law's application. In addition, an executive that encounters a hostile legislative can dissolve it by claiming a constitutional crisis. Although the president must call for new elections within three months, in the interim he can rule by decree. During the congressional recess, the executive also rules by decree, although the National Congress subsequently may review the president's actions. The president also may extend the congressional session or call an extraordinary session. In addition, the president's annual budget takes priority over all other legislation; it must be debated within one month, and it can be rejected only by an absolute majority of both houses.

In addition to constitutionally based limits on the National Congress, the legislature also was constrained by Stroessner's tight control of the ruling Colorado Party. Stroessner supervised personally the selection of the party's legislative candidates. Because the Colorado Party won a majority of votes in each of the five elections between 1968 and 1988, it received a two-thirds majority of congressional seats under the governing electoral law, thus ensuring a compliant legislature for Stroessner. Although opposition parties could use the National Congress as a forum to question and criticize Stroessner's policies, they were unable to affect the outcome of government decisions.

The Judiciary

Article 193 of the Constitution provides for a Supreme Court of Justice of no fewer than five members and for other tribunals and justices to be established by law. The Supreme Court supervises all other components of the judicial branch, which include appellate courts with three members each in the areas of criminal, civil, administrative, and commercial jurisdiction; courts of first instance in these same four areas; justices of the peace dealing with more minor issues; and military courts. The Supreme Court hears disputes concerning jurisdiction and competence before it and has the power to declare unconstitutional any law or presidential act. As of 1988, however, the court had never declared invalid any of Stroessner's acts.

Supreme Court justices serve five-year terms of office concurrent with the president and the National Congress and may be reappointed. They must be native-born Paraguayans, at least thirtyfive years of age, possess a university degree of Doctor of Laws, have recognized experience in legal matters, and have an excellent reputation for integrity.

Local Government

Paraguay is a centralized republic with nineteen departments, fourteen of which are east of the R�o Paraguay and the remainder in the Chaco region. The capital, Asunci�n, is located in the Central Department. The central government exerts complete control over local administration. The departments are headed by government delegates (delegados de gobierno) who are appointed by the president and report to the minister of interior. Their duties are concerned primarily with public order and internal security. The departments are divided into municipalities--the local government unit--of which there were 200 in 1988.

A municipality consisted of a town or village and the surrounding rural area. In order to qualify as a municipality, an area had to have a minimum population of 10,000 in 1988, a central town or village with a defined geographical area, and sufficient financial resources to pay for its municipal needs.

There is no separate town or city government apart from the municipality. The municipality is limited in jurisdiction; it has no control over education, police, and social welfare matters or over public health except for urban sanitation. Each municipality has a presidentially appointed mayor (intendente) who acts as executive agent of the municipality. In addition, each municipality has a board (junta municipal) elected by local residents for a five-year term of office. A rural municipality is supervised by a local company police sergeant (sargento de compan�a) who reports both to the government delegate and the minister of interior.

The Electoral System

Regulations pertaining to the electoral system, voting, and political parties were found in the Electoral Statute, Law No. 886 of December 11, 1981. The statute's 21 chapters and 204 articles provided minute detail on virtually all aspects concerning elections. Article 1 stipulated that "the suffrage is the right, duty, and public function of the elector. Its exercise is elaborated according to this Law." Article 8 specified that the political party obtaining a majority of votes would receive twothirds of the seats in the Congress, with the remaining one-third divided proportionately among the minority parties. According to Article 20, a party must obtain 10,000 signatures of citizens to be registered. Article 25 proscribed parties of communist ideology or those that sought to overthrow the regime and its principles. Article 26 prohibited subordination to or alliance of parties with parties in other countries, whereas Article 27 banned parties and other political organizations from receiving external financial support. Article 49 made voting obligatory. Articles 158 and 159 defined the functions and composition, respectively, of the Central Electoral Board, the body responsible for implementing and interpreting the provisions of the Electoral Statute. As with the composition of the National Congress, the majority party held twothirds of the seats of the Central Electoral Board.


Paraguay - POLITICS


In the late 1980s, Paraguay was an authoritarian regime under the personalistic control of Stroessner. Whereas Francia took the title of The Supreme Dictator (El Supremo Dictador), Carlos Antonio L�pez The Most Excellent One (El Excelent�simo), and Francisco Solano L�pez The Marshall (El Mariscal), Stroessner called himself The Continuer (El Continuador). Indeed, not only did Stroessner continue the authoritarian tradition of these three nineteenthcentury dictators and the twentieth-century example of Estigarribia and Higinio Mor�nigo, he also remained in office for more than three decades. Stroessner assumed power following a more open but highly unstable period in Paraguay's history.

The political instability of the immediate postwar period, culminating in the civil war in 1947, offered important lessons for most Paraguayans. As Riordan Roett and Amparo Men�ndez-Carri�n put it: "Paraguayans have thus learned to equate open politics with weakness and authoritarian politics with strength." The personalistic nature of Stroessner's regime, which is known as the Stronato, is evident in the names of the capital's airport (President Alfredo Stroessner International Airport), the second largest city (Puerto Presidente Stroessner), and in a prominent neon sign on top of a building in the central square of Asunci�n that flashes: "Peace, Work, Well-being with Stroessner."

Stroessner's enduring, active, and highly involved control completely determined the workings of the structure of government. Not only does the Constitution of 1967 grant the president extensive powers in relationship to the other institutions, but the powers of the central government far outweigh those of other levels. Furthermore, Stroessner personally picked all important civilian and military personnel.

Despite the authoritarian nature of his rule, Stroessner argued in his speeches that the country had a functioning democracy, pointing with pride to the multiparty character of the legislature and the constitutional requirement of separation of powers. At the same time, however, Stroessner insisted on an "authentically Paraguayan democracy." Such a democracy required, in Stroessner's view, a strong government in order to ensure the state of law. Paraguayan democracy also meant freedom and security without anarchy and terrorism.

<>The Stroessner Regime
<> Opposition Parties
<> Political Developments Since 1986
<> The Roman Catholic Church
<> Business
<> Urban Labor
<> Rural Labor
<> Students
<> The Media


Paraguay - The Stroessner Regime


Although the Colorado Party emerged triumphant from the civil war of 1947, an ongoing struggle among its factions hindered governmental continuity. Between 1948 and 1954, six persons occupied the presidency. Stroessner, who had become commander in chief of the armed forces, was an active participant in the political intrigue of that era and eventually led his troops in a successful coup in May 1954 against President Federico Chaves. Two months later, Stroessner was selected as a compromise candidate by the Colorados, who considered his presidency only a temporary interlude, and he ran in elections from which other parties were excluded. Relying on his control of the armed forces, and with considerable shrewdness and the constant work for which he was famous, Stroessner gained control over the factions of the Colorados and subordinated the party to his interests. By 1967 all within the party had become supporters of Stroessner. In addition to the control of the government itself, the major institutional bases of his rule, and thus of the Paraguayan political system, were the armed forces--including the national police, a paramilitary force that was under the jurisdiction of the Ministry of Interior but was headed by army officers--and the Colorado Party.

The Armed Forces

Historically in Paraguay, as in virtually all Latin American republics, no president has been able to remain in power without the support of the armed forces. Between 1936 and 1954, the army was the instrument for every change of government. Stroessner brought the armed forces under control, thereby reinforcing his rule, yet he also skillfully counterbalanced the armed forces with the Colorado Party.

In the late 1980s, the armed forces and the Roman Catholic Church were the only national institutions that had maintained continuity since independence. Because of the violent upheavals that characterized its history, Paraguay had the most uncompromisingly martial history of any country in Latin America. It resisted the Triple Alliance of Argentina, Brazil, and Uruguay for almost five years and collapsed only when more than one-half of its total population and almost all of its men had been killed. During the 1932-35 Chaco War, Paraguay took on a country having three times its human resources and many times its economic resources. Paraguay won a resounding military victory but at the cost of 8 percent of its total male population and subsequent economic ruin. This violent history hindered the development of a genuine aristocracy, thus allowing the officer corps to emerge as a social and, to a large extent, an economic elite.

In addition to his constitutional role as commander in chief of the armed forces, Stroessner retained his position as commander in chief of the army. A professional soldier recognized for outstanding service during the Chaco War, Stroessner took his duties as armed forces commander particularly seriously. He devoted one day a week exclusively to military matters at the headquarters of the general staff and made frequent visits to military commands throughout the country. Stroessner personally determined all promotions and transfers, from lieutenant to chief of staff. His long and intense involvement with the armed forces, combined with the small size of the country and the armed forces, made it possible for him to know intimately the officer corps.

Stroessner's control was also enhanced by the senior structure of the armed forces. The chief of staff, an army general, formally commanded all the troops in the name of the president and was directly subordinate to Stroessner. In fact, the chief of staff's position was actually that of a liaison officer. The minister of national defense was not in the direct chain of command and dealt mainly with administrative matters, including budgets, supplies, and the military tribunals.

Through his domination over the appointment and budgetary processes of the armed forces, Stroessner sought to prevent the emergence of an independent profile within the military. Public pronouncements of the armed forces were generally limited to pledges of unwavering support for the president and commitments to fight international communism. High-ranking officers did express their concerns regarding the divisions that emerged within the Colorado Party in the mid-1980s over the issue of presidential succession; nevertheless, these officers all called on Stroessner to seek another term in 1988.

Adrian J. English, an expert on Latin American militaries, concluded that the organization of the Paraguayan army appeared to be based more on political than military considerations. Stroessner ensured the loyalty of the officer corps by offering them well-paid positions and extensive benefits, such as family allowances, health care, pensions, and loans. Many officers also acquired wealth through control of state enterprises, such as public utilities, ports, transportation, meat packing, and alcohol distribution. Substantial information also linked elements in the military to smuggling and drug trafficking.

The Colorado Party

Two conflicting political movements--the Colorado Party and the Liberal Party (Partido Liberal--PL)--emerged following the departure of Argentine and Brazilian forces in 1876. The Colorados dominated politics between 1876 and 1904, whereas the Liberals governed between 1904 and 1940. Following the dictatorship of Mor�nigo and the resulting civil war, the divided Colorados returned to power in 1948.

Upon assuming office in 1954, Stroessner turned the Colorado Party into a key element of his rule. Unusual in the Latin American context, the party was a highly organized, omnipresent, and important instrument for the control of society and the functioning of government. The Colorado Party served the interests of the Stroessner regime in a number of ways. First, the party sponsored numerous rallies and demonstrations, thereby promoting identification of the population with the regime. Speakers at such rallies generally employed the language of nationalism, a particularly important theme in a small, landlocked country surrounded by more powerful neighbors. Second, the party mobilized electoral support for government-sponsored candidates. Third, the extensive party media, including the daily newspaper Patria and the radio program "La Voz del Coloradismo," promoted the government's view of national and international events. In addition, the party employed its ancillary organizations, which included professional associations, veterans' groups, women's federations, peasants' groups, cultural societies, and students' clubs, to maintain contact with virtually all sectors in the country.

The Colorado Party's control of jobs in the public and semipublic sectors, a particularly important situation in an underdeveloped country short of opportunities in the private sector, also enabled it to co-opt all potentially significant elements into the regime. Party membership was considered necessary for success. Civilian employees of the central and local governments, including teachers and workers in state hospitals, were recruited from within the ranks of the party, and party dues were deducted from their salaries. Officers in the armed forces also were obliged to join the party; indeed, admission to the officer corps was restricted to children of Colorados. In the late 1980s, the party claimed a membership of 1.4 million, or approximately 35 percent of the total population.

Colorado local committees (seccionales) were found in every community, dispensing jobs and favors to party members. These committees, of which there were 243 in 1988 (including 26 in Asunci�n), met at least once a week and had executive committees of 9 members and 6 alternates who served 3-year terms of office. The local committees, which also had more specialized units for laborers, peasants, youth, and women, served as the party base and collected intelligence. The party also had a rural militia, the py nand�, or "barefoot ones," which was estimated to number 15,000. The py nand� were especially active in the 1960s in pursuing guerrilla bands.

In theory, the highest body in the Colorado Party was the National Convention, which convened regularly every three years or could be convoked more frequently in the case of crises or to nominate slates for elections. The party was actually run, however, by the National Committee of the Colorado Party (Junta de Gobierno), which consisted of thirty-five members and sixteen alternates elected at the National Convention. The National Committee maintained contact with the party's ancillary organizations and supervised the local committees. The committee also elected its own executive consisting of a president, three vice presidents, and other officials. The National Committee president set the party's agenda, chaired executive meetings, presented the budget, called emergency sessions, and represented the party before the government or other organizations.

Given the importance of the Colorado Party in defending the Stroessner regime, the National Committee attempted to avoid at all costs the emergence of contested leadership lists in local committees. When such lists did appear in the mid-1980s, however, they ironically reflected cracks that had developed within the National Committee itself. The committee split into two main camps: militants (militantes) and traditionalists (tradicionalistas). Militants, also known as Stronistas, favored Stroessner's regime and wanted little or no change. They generally felt more loyalty to Stroessner personally than to the party. Their leaders included those who particularly benefited from the system and perceived it as good for themselves and the country. Traditionalists favored a transition to a less authoritarian regime. They believed Paraguay was moving toward a more open system and wanted the party to play a role in the process. Traditionalists stressed the original content of Colorado ideology and further emphasized democracy and social justice. Many of their leaders were from families who had played a major role in the party since the 1940s.

Both militants and traditionalists were subdivided into several factions. Militants broke into two camps: the orthodox (ortodoxo) and institutionalists (institucionalistas). The orthodox favored having Stroessner remain in power until he died, after which his son, Air Force Lieutenant Colonel Gustavo Stroessner Mora, would succeed. The institutionalists were somewhat more pragmatic. One well-known advocate of this position, the minister of public health and social welfare, Ad�n Godoy Jim�nez, proposed that Stroessner stay in power until he died or resigned, at which time a civilian or military figure with the same orientation would assume power.

Traditionalists were even more fragmented than were militants. The traditionalist group closest to the regime, at least prior to the rupture of 1987, was led by Juan Ram�n Chaves, the octogenarian president of the party for twenty-five years and president of the Senate, who symbolized the link to the pre-Stroessner period. The ethicals (�ticos) coalesced around National Committee member Carlos Romero Arza, the son of Tom�s Romero Pereira, architect of the party's alliance with Stroessner in 1954. In a September 1985 speech, Romero Arza called attention to the lack of political ethics in the party. He denounced corruption and bad management, blaming opportunists who had joined the party during the Stroessner regime as a way to enrich themselves. Romero Arza urged a return to the traditional values that inspired previous Colorado governments and called for a political dialogue between the party and the political opposition.

Two additional factions formed in 1987. One--the Movement for Colorado Integration (Movimiento de Integraci�n Colorado--MIC), also called the Group of Thirty-four--was composed of longstanding Colorados who had retired from public life. Led by Edgar L. Ynsfr�n, a former minister of interior, the MIC advocated a reassertion of the authority of the National Committee and a restructuring of the party to confront the opposition in a more open system. Another faction--the National and Popular Movement (Movimiento Nacional y Popular)--was led by congressman and Colorado intellectual Leandro Prieto Yegros and proposed to act as a bridge between the traditionalists and the militants.

Colorado Party factionalism broke into public prominence following elections in late 1984 for members of the National Committee. Mario Abdo Ben�tez, a militant and Stroessner's private secretary for twenty years, had expected to be elected the first vice president in recognition of his support of the Stronato. After Abdo Ben�tez was unexpectedly defeated at the National Convention, his followers carried on their fight at the local committee level. Conflicts became public in some towns, with rival groups of Colorados accusing each other of rigging the party elections and appealing for support from different members in the National Committee.

The conflict took a dramatic turn in early 1986 when the ethicals publicly opposed Stroessner's bid for yet another term of office and openly called for a civilian Colorado Party candidate in the 1988 elections. They were later joined by the MIC in this appeal. This action represented the first time since 1959 that an organized sector of the party openly opposed Stroessner. In April 1986, Stroessner acknowledged the divisions in the party and denounced the ethicals and the MIC as "deserters." In retaliation for the ethicals' stance, Stroessner fired Romero Arza from his position at the National Development Bank and forced him to resign from the Council of State. Those around him became politically isolated and had to stand on the sidelines at the regular National Convention in August 1987.

In May 1987, the militants presented their slate of four candidates for the presidency and three vice presidencies of the National Committee. The slate was headed by Sabino Augusto Montanaro, minister of interior since 1968, and also included Ben�tez, Godoy, and Jos� Eugenio Jacquet, minister of justice and labor. In 1976 Montanaro had been excommunicated by the Roman Catholic Church for allowing the police to torture church workers who were involved in rural protests. Although the militants had captured control of a majority of the local committees and thus appeared headed for a solid victory at the National Convention, Montanaro decided to leave nothing to chance. A few hours before the convention was to begin, the police arrived at the building where it was to be held and restricted access to the militants and those from the National and Popular Movement, who by then had endorsed the militants' slate. Although Chaves, who was still the party's president and was the nominee of the traditionalists, declared the proceedings invalid, the militants went ahead with the convention and captured the four leadership posts and all other seats on the National Committee. Within two weeks, Stroessner had endorsed the militants' victory and claimed that it was a legitimate expression of the Colorado majority.

The militants' victory at the National Convention was repeated in November 1987, when the party held a nominating convention for the presidential and congressional election scheduled for February 1988. The 874 militant delegates unanimously chose Stroessner to be the Colorado Party standard-bearer and drew up a slate of congressional candidates that excluded traditionalists. These victories were achieved, however, at the cost of aggravated divisions in the party, itself a key component of the regime's infrastructure.

By mid-1988 Stroessner had given no indication of choosing a likely successor. Observers assumed that the party, in conjunction with the armed forces, would play a vital role in the succession process. Yet although Stroessner clearly supported the militant wing of the party, most observers believed that the militants lacked close contacts with the armed forces.


Paraguay - Opposition Parties


The existence of many factions within the Colorado Party did not indicate real pluralism but rather the fragmentation of an old political movement that had enjoyed both the benefits and the stresses of supporting a personalized authoritarian rule. By the same token, the existence of opposition political parties could not be considered evidence of true representative democracy.

Opposition parties faced formidable obstacles in attempting to challenge Colorado Party control. For example, the Colorado Party's virtual monopoly on positions and patronage made it difficult for other parties to obtain the necessary numbers of signatures for legal recognition. In addition, the Colorados held a two-thirds majority on the Central Electoral Board. At the same time, however, the government needed the political participation of at least some opposition parties in order to support the posture of democracy. The Constitution reserves one-third of the congressional seats for opposition parties, regardless of their share of the vote. Even so, most of the opposition did not participate in elections; indeed, only three opposition parties--the PL, the Radical Liberal Party (Partido Liberal Radical--PLR), and the Febrerista Revolutionary Party (Partido Revolucionario Febrerista--PRF)--had legal recognition in the late 1980s.

Between 1947 and 1962, the Colorado Party was the only legal party. With the consolidation of Stroessner's power and the prodding of the administration of United States president John F. Kennedy, however, in 1962 the general granted legal standing to a Liberal splinter group, the Renovation Movement (Movimiento Renovaci�n). The Renovationists participated in the 1963 elections; as the president's loyal opposition, they began to enjoy some of the privileges formerly reserved only for the Colorados. In 1967, after two decades in exile, the PLR accepted Stroessner's offer of legal participation and returned to participate in elections. In 1976 the two Liberal factions unsuccessfully sought to form a single party; the Renovation Movement then changed its name to the Liberal Party. The other legal party, the PRF, was organized following Colonel Rafael Franco's overthrow of the Liberal Party in 1936. The PRF, more commonly known as the Febreristas, received legal recognition in 1965. The Febreristas affiliated with the Socialist International in 1965 and claimed to have 50,000 active members in 1986.

In the early 1970s, the Febreristas and the bulk of the PLR withdrew from elections following their refusal to endorse the constitutional amendment allowing Stroessner to stand for unlimited reelection. The breakaway faction of the PLR lost its legal status and renamed itself the Authentic Radical Liberal Party (Partido Liberal Radical Aut�ntico--PLRA). Thus, the PLR and the remaining wing of the PL were the only challenges to the Colorado Party in the elections of 1973, 1978, 1983, and 1988. The PLR and PL thereby were entitled to occupy one-third of the seats in the National Congress, although their combined average vote in the elections was only 10 percent. Neither had the organization, finances, or human resources to oppose the Colorados effectively.

In addition to the PLRA, other nonlegal parties included the Christian Democratic Party (Partido Dem�crata Cristiano--PDC) and the Colorado Popular Movement (Movimiento Popular Colorado-- Mopoco). The PDC was founded in 1960. The government allowed the legalization of parties in the early 1960s but required new ones to have 10,000 members. Although the PDC lacked the necessary members, it claimed that it was exempt from the new law because the party had already existed before the law was passed. The government rejected this argument, however, contending that the law was based on a 1959 decree law. The government's contention was upheld by the Supreme Court.

Mopoco was founded in 1959 by Colorados who had served in the administration of Federico Chaves, Stroessner's predecessor. The party leadership was forced into exile because of continued opposition to Stroessner and did not return to Paraguay until 1981 under an amnesty provision. The leaders discovered subsequently, however, that the amnesty did not truly reflect a change in government policy, as they became subject once again to harassment and imprisonment. In addition, because Mopoco was not a legally recognized political party, it could not communicate with the electorate.

In 1979 the Febreristas, PLRA, PDC, and Mopoco founded the National Accord. All claimed to be center left and reformist, and they were carefully and vocally anti-Marxist. The Accord's fourteen-point platform stressed the need for nonradical but basic reforms, including an end to the state of siege, freedom for political prisoners, amnesty for exiles, respect for human rights, elimination of repressive legislation, and a broadly representative government that would prepare society for free elections within two years. Specifically to further free elections, the Accord called for the abolition of the Electoral Statute. Despite government attempts to destroy the momentum of the Accord by expelling PLRA leader Domingo La�no in December 1982, the Accord held together.

The Accord benefited from the legal status of the Febreristas. As a legally recognized party, the Febreristas could hold meetings and rallies, offer an umbrella to the other members of the Accord, and publish--until 1987--a weekly newspaper, El Pueblo. Nonetheless, the police often used force to break up Accord rallies and arrest its leadership. The human rights organization Americas Watch charged that eighty-four Accord political activists had been arbitrarily arrested between early 1985 and March 1986. In addition, component parties of the Accord were often divided not only among themselves but also internally. In July 1987, a new party, the Popular Democratic Movement (Movimiento Democr�tico Popular--MDP), was formed. The MDP strongly criticized the regime, oriented itself toward the lower classes, and offered a program to the left of the National Accord parties.

The Paraguayan Communist Party (Partido Comunista Paraguayo-- PCP) was less significant than other opposition political parties, was excluded from the National Accord, and had been isolated historically from other parties, even in exile. It was proscribed by the 1955 Law for the Defense of Democracy, Law 209 of 1970, and the Electoral Statute. The tight control of the political environment and the presence of the Colorado Party local committees in even small communities virtually prohibited the radical left's penetration in Paraguay.


Paraguay - Political Developments Since 1986


The splits in the Colorado Party in the 1980s and the conditions that led to this--Stroessner's age, the character of the regime, the economic downturn, and international isolation--provided an opportunity for demonstrations and statements by the opposition prior to the February 1988 general elections. In addition, the official attitude to human rights benefited somewhat as Stroessner attempted to improve his image abroad. In March 1986, for example, Stroessner met with an Americas Watch delegation, the first time he had ever received a human rights group. Two years earlier, another Americas Watch delegation had been arrested and expelled from the country upon arrival. The state of siege was also allowed to lapse in Asunci�n in April 1987.

The PLRA leader La�no served as the focal point of the opposition in the second half of the 1980s. The government's effort to isolate La�no by exiling him in 1982 had backfired. In fact, La�no received considerable international attention during five unsuccessful attempts to return to Paraguay. On his fifth attempt, in June 1986, La�no returned on a Uruguayan airliner with three television crews from the United States, a former United States ambassador to Paraguay, and a group of Uruguayan and Argentine congressmen. Despite the international contingent, the police violently barred La�no's return. The police action dashed hopes that Stroessner's meeting three months earlier with the Americas Watch representatives presaged a substantial liberalization of government policy.

In response to increased pressure from the United States, however, the Stroessner regime relented in April 1987 and permitted La�no to arrive in Asunci�n. La�no took the lead in organizing demonstrations and diminishing somewhat the normal opposition party infighting. The opposition was unable to reach agreement on a common strategy regarding the elections, with some parties advocating abstention and others calling for blank voting. Nonetheless, the parties did cooperate in holding numerous lightning demonstrations (mitines relampagos), especially in rural areas. Such demonstrations were held and disbanded quickly before the arrival of the police.

The elections of 1988 provided the opportunity for two organizational innovations. The first was the establishment of the MDP. In addition, the Accord groups, which now expanded to include the Colorado ethicals and some labor and student movements, organized a National Coordinating Committee for Free Elections to monitor the political situation, expose what they termed the "electoral sham," and encourage either abstention or blank voting.

Obviously stung by the upsurge in opposition activities, Stroessner condemned the Accord for advocating "sabotage of the general elections and disrespect of the law" and used the national police and civilian vigilantes of the Colorado Party to break up demonstrations. A number of opposition leaders were imprisoned or otherwise harassed. Hermes Rafael Saguier, another key leader of the PRLA, was imprisoned for four months in 1987 on charges of sedition. In early February 1988, police arrested 200 people attending a National Coordinating Committee meeting in Coronel Oviedo. Forty-eight hours before the elections, La�no and several other National Accord members were placed under house arrest.

During the six weeks of legal campaigning before the elections, Stroessner addressed only three Colorado rallies. Despite limited campaign activities, the government reported that 88.7 percent of the vote went to Stroessner, 7.1 percent to PLR candidate Luis Mar�a Vega, and 3.2 percent to PL candidate Carlos Ferreira Ibarra. The remaining 1 percent of ballots were blank or annulled. The government also reported that 92.6 percent of all eligible voters cast their ballots. The National Coordinating Committee rejected the government's figures, contending that abstention was as high as 50 percent in some areas. In addition, election monitors from twelve countries, including the United States, France, Spain, Brazil, and Argentina, reported extensive irregularities.

Shortly after the elections, researchers from the Catholic University of Our Lady of Asunci�n and the West German Friedrich Naumann Foundation released the findings of a public opinion poll that they had conducted several weeks earlier. The poll, which measured political attitudes of urban Paraguayans--defined as those living in towns with at least 2,500 residents--suggested that the Colorado Party had considerable support, although nowhere near the level of official election statistics. Asked for whom they would vote in an election involving the free participation of all parties and political movements, 43 percent named the Colorado Party; the PLRA, which finished second in the poll, was mentioned by only 13 percent of all respondents. (The two "official" opposition parties, the PLR and the PL, trailed badly with only 2.9 percent and 2.7 percent, respectively.) Stroessner's name also topped the list of those political leaders considered most capable of leading the country; indeed, after La�no, who finished second in the list, Colorado traditionalists, militants, and ethicals captured the next five positions.

Although contending that these results reflected the Colorados' virtual monopoly of the mass media, opposition politicians also saw several encouraging developments. Some 53 percent of those polled indicated that there was an "uneasiness" in Paraguayan society. Furthermore, 74 percent believed that the political situation needed changes, including 45 percent who wanted a substantial or total change. Finally, 31 percent stated that they planned to abstain from voting in the February elections.

Relations between militants and traditionalists deteriorated seriously in the months following the elections. Although Chaves and his followers had not opposed Stroessner's reelection bid, Montanaro denounced them as "legionnaires"--a reference to those Paraguayan expatriates who fought against Francisco Solano L�pez and who were regarded as traitors by the original Colorados. Prominent traditionalists, among them the head of the Central Electoral Board and the minster of foreign relations, lost their government positions. Luis Mar�a Arga�a left his post as chief justice of the Supreme Court following the completion of his five-year term and was replaced by a militant. Arga�a attempted to distance himself somewhat from his traditionalist colleagues by claiming that he had not authorized his name to appear on a traditionalist list prior to the August 1987 convention; nonetheless, most observers thought that he was the most likely candidate to succeed Chaves as head of the movement. By late 1988 the only major agencies still headed by traditionalists were the IBR and the National Cement Industry (Industria Nacional de Cemento). In September 1988, traditionalists responded to these attacks by accusing the militants of pursuing "a deceitful populism in order to distract attention from their inability to resolve the serious problems that afflict the nation." Traditionalists also called for an end to personalism and corruption.

The Colorado Party was not the only political group confronted by internal disputes in the late 1980s. The PLRA had two major currents; La�no headed the Liberation for Social Change (Liberaci�n para Cambio Social), whereas Miguel Abd�n Saguier led the Popular Movement for Change (Movimiento Popular para el Cambio). Despite the efforts of PDC founder Luis Alfonso Resck, a bitter leadership struggle erupted within that party in late 1988. Finally, the PRF found itself in the middle of an acrimonious battle between the Socialist International and the Latin American Socialist Coordinating Body.


Paraguay - The Roman Catholic Church


Social life in Paraguay had always been closely tied to religion, but politically the Roman Catholic Church traditionally had remained neutral and generally refrained from commenting on politics. In the late 1960s, however, the church began to distance itself from the Stroessner regime because of concerns over human rights abuses and the absence of social reform. The Auxiliary Bishop of Asunci�n, An�bal Maricevich Fleitas, provided an early focus for criticism of the regime. With the growth of the Catholic University and the influx of Jesuits from Europe, especially Spain, the church had a forum and a vehicle for reform as well as a dynamic team of spokespeople. Some priests moved into the poor neighborhoods, and they, along with others in the rural areas, began to encourage the lower classes to exercise the political rights guaranteed in the Constitution. These priests and the growing Catholic Youth movement organized workers and peasants, created Christian Agrarian Leagues and a Christian Workers' Center, and publicized the plight of the Indians. As part of the program of education and awareness, the church founded a weekly news magazine, Comunidad, and a radio station that broadcast throughout the country.

In April 1968, the regime reacted against this criticism and mobilization by authorizing the police to invade the university, beat students, arrest professors, and expel four Jesuits from the country. Although the Paraguayan Bishops' Conference (Conferencia Episcopal Paraguayo--CEP) met and issued a blistering statement, the regime was not deterred from continuing its crackdown on the church. The Stroessner government arrested church activists, shut down Comunidad, disbanded Catholic Youth rallies, outlawed the Catholic Relief Service--the church agency that distributed assistance from the United States--and refused to accept Maricevich as successor when Archbishop An�bal Mena Porta resigned in December 1969.

The following January, the government and church reached an agreement on the selection of Ismael Rol�n Silvero as archbishop of Asunci�n. This resolution did not end the conflict, however, which resulted in continued imprisonment of university students, expulsions of Jesuits, and attacks on the Christian Agrarian Leagues, a Catholic preparatory school, and even the offices of the CEP. Rol�n stated that he would not occupy the seat on the Council of State provided by the Constitution for the archbishop of Asunci�n until the regime restored basic liberties.

In the 1970s, the church, which was frequently under attack, attempted to strengthen itself from within. The church promoted the establishment of peasant cooperatives, sponsored a pastoral program among students in the Catholic University, and endorsed the creation of grassroots organizations known as Basic Christian Communities (Comunidades Eclesi�sticas de Base--CEBs). By 1986 there were 400 CEBs consisting of 15,000 members. These organizational efforts, combined with dynamic regional efforts by the church symbolized in the Latin American Episcopal Conference (Conferencia Episcopal Latinoamericana--Celam) meeting in Puebla, Mexico, in 1979, resulted in a renewed commitment to social and political change. Following the Puebla conference, the Paraguayan Roman Catholic Church formally committed itself to a "preferential option for the poor," and that year the CEP published a pastoral letter, "The Moral Cleansing of the Nation," that attacked growing economic inequalities and the decline of moral standards in public life. In 1981 the CEP released a detailed plan for social action. Two years later, the bishops issued a pastoral letter denouncing increasing evictions of peasants.

By the early 1980s, the church had emerged as the most important opponent of the Stroessner regime. The CEP's weekly newspaper, Sendero, contained not only religious information but also political analysis and accounts of human rights abuses. The church's Radio Caritas was the only independent radio station. Church buildings and equipment were made available to government opponents. In addition, the bishops joined with leaders of the Lutheran Church and Disciples of Christ Church to establish the Committee of the Churches. This committee became the most important group to report on human rights abuses, and it also provided legal services to those who had suffered such abuse.

Keeping an eye on the post-Stroessner political situation and concerned to bring about a peaceful democratic transition, the CEP began in 1983 to promote the idea of a national dialogue to include the Colorado Party, business, labor, and the opposition parties. This concept was endorsed by the National Accord, which demanded constitutional reforms designed to create an open, democratic, pluralist, and participatory society. The Colorado Party rejected the calls for dialogue, however, on the grounds that such action was already taking place in the formal structures of government at national and local levels.

In the late 1980s, the church was better able to respond in a united manner to criticism and repression by the regime than had been the case in the late 1960s and early 1970s. Five days after the suspension of the state of siege in Asunci�n in 1987, police broke up a Holy Week procession of seminarians who were dramatizing the predicament of peasants who had no land. Rol�n denounced this police action. In October 1987, the clergy and religious groups of Asunci�n issued a statement that condemned the preaching of hatred by the Colorado Party's radio program "La Voz del Coloradismo," demanded the dismantling of assault squads made up of Colorado civilians, and called for respect for civil rights and a national reconciliation. Later that month, the church organized a silent march to protest government policies. The march, which attracted between 15,000 and 30,000 participants, was the largest public protest ever staged against the regime and demonstrated the church's impressive mobilization capabilities.

Critical statements by the church increased with the approach of the 1988 general elections and with the government's continued refusal to participate in the national dialogue. In January 1988, the CEP issued a statement on the current situation, calling attention to the government's use of corruption, violence, and repression of autonomous social organizations. The bishops warned of increasing polarization and violence and indicated that blank voting in the upcoming elections was a legitimate political option, a position frequently denounced by Stroessner and the Colorado Party. The archbishopric of Asunci�n followed up in February by issuing a document rejecting the government's accusations of church involvement in politics and support for opposition parties. Immediately after the elections, Rol�n granted an interview to the Argentine newspaper Clar�n, in which he blamed the tense relations between church and regime on the government's use of violence. He criticized the government for its disregard of the Constitution, harassment of political opponents, and refusal to participate in the national dialogue, and he charged that the elections were farcical.

In the confrontational atmosphere after the elections, the visit by Pope John Paul II to Paraguay in May 1988 was extremely important. The government rejected the church's plans to include Concepci�n on the papal itinerary, claiming that the airport runway there was too short to accommodate the pope's plane. Maricevich, who now headed the diocese of Concepci�n, charged, however, that the city had been discriminated against throughout the Stroessner era as punishment for its role in opposing General Higinio Mor�nigo in the 1947 civil war. The pope's visit was almost cancelled at the last moment when the government tried to prevent John Paul from meeting with 3,000 people--including representatives from unrecognized political parties, labor, and community groups--dubbed the "builders of society." After the government agreed reluctantly to allow the meeting, the Pope arrived in Asunci�n and was received by Stroessner. Whereas Stroessner spoke of the accomplishments of his government and the recent free elections, the Pope called for a wider participation in politics of all sectors and urged respect for human rights. Throughout his three-day trip, John Paul stressed human rights, democracy, and the right and duty of the church to be involved in society. His visit was seen by observers as supporting the Paraguayan Roman Catholic Church's promotion of a political transition, development of grass roots organizations, and defense of human rights.


Paraguay - Business


The business sector was a relatively weak interest group and generally supported the government. The local business community was quite small, reflecting both the country's low level of industrialization and the presence of many foreign-owned financial institutions and agro-processing firms. Although local businessmen traditionally supported the Liberal Party, the political and monetary stability of the Stronato appealed to business leaders and made them cooperate closely with the Colorado Party and the government. Furthermore, businesses that strongly supported the government accrued considerable financial benefits, whereas those who were uncooperative placed their businesses in jeopardy. In an effort to increase its influence over the business sector, the government encouraged the formation of associations of businessmen and industrialists. The two leading business associations--the Federation of Production, Industry, and Commerce (Federaci�n de la Producci�n, la Industria, y el Comercio--Feprinco) and the Paraguayan Industrial Union (Uni�n Industrial Paraguaya--UIP)--each had seats on the Council of State. The Colorado Party also maintained relations with the business sector through its ancillary organizations.

The business sector began to define some independence from the government, however, following the country's economic slump in the early and mid-1980s and a perceived lack of government response to the problem. For example, Feprinco president Alirio Ugarte D�az spoke out against the government's economic policies, asking for action in reviving the economy and eliminating corruption. Although neither the Feprinco nor the UIP participated in the national dialogue in 1987, both submitted requests to the government for major policy changes to reverse the economic slump.


Paraguay - Urban Labor


Labor has not been an organized, tightly knit, autonomous force in Paraguay. The firms have traditionally been small, workers were not politically active, and personal relationships between employers and employees prevailed. As in other Southern Cone countries, the paternal state anticipated demands of a growing labor force, granted some benefits, and impeded the formation of strong labor organizations. When Stroessner came to power, most of organized labor belonged to the Paraguayan Confederation of Workers (Confederaci�n Paraguaya de Trabajadores-- CPT), an unstructured amalgam of trade unions. Despite its loose association with the Colorado Party, the CPT declared a general strike in 1958. Stroessner crushed the strike, dismissed the CPT leadership, and appointed a police officer as its head. Consistent with these actions, the government, and not the workers, continued to determine the confederation's leadership in the late 1980s.

The CPT remained the only legally recognized large labor organization; it contained 60,000 member, and claimed to represent 90 percent of organized labor. The CPT's refusal to endorse strikes after 1959 reflected the government's dominance over it. In 1985 the CPT lost its membership in the International Labour Organisation (ILO) after an ILO delegation to Paraguay determined that the CPT was neither independent nor democratic. Nonetheless, the CPT's existence allowed the labor force some access to government officials.

The first attempt to reform the labor movement came in 1979 with the emergence of the Group of Nine trade unions. The group, which included bank workers, a sector of construction workers, and the outlawed journalists' union, unsuccessfully attempted to take control of the CPT in March 1981. Several unions of the group subsequently broke away from the CPT and in 1982 led a successful national boycott of Coca Cola in order to reinstate trade union members at the bottling plant. From this effort emerged the InterUnion Workers Movement (Movimiento Intersindical de Trabajadores-- MIT) in 1985. The MIT received recognition from both the International Confederation of Free Trade Unions and the Latin American Central Organization of Workers (Central Latinoamericana de Trabajadores--Clat), both of which sent representatives to express their support for the new movement. In the late 1980s, the MIT remained small, and its members were subject to harassment and imprisonment; nevertheless, it was still the only independent labor movement since Stroessner took power.


Paraguay - Rural Labor


For most of the Stronato, the government could rely on a supportive peasantry. Linked through the local committees of the Colorado Party, many peasants participated in the land colonization programs of the eastern border region that were sponsored by the government's IBR. Others bypassed the IBR altogether and participated independently in the settlement of the area. In any event, the availability of land served to alleviate somewhat the frustration of peasants who were in a poor economic situation.

In the 1970s and early 1980s, a number of factors contributed to a dramatic reduction of land in the eastern border region. First, an estimated 300,000 to 350,000 Brazilians crossed into Paraguay in search of cheap land. Second, many squatters were forced off their lands by new agribusinesses that were much more efficient than the previous operators of estates. In addition, the completion of the Itaip� hydroelectric project resulted in high unemployment of construction workers, many of whom were former peasants. As a result, an estimated 200,000 families lacked title to their land or had no land at all.

In about 1980, landless peasants began to occupy land illegally. Although some settlements were smashed by the government, others eventually received formal recognition by the IBR. A number of rural organizations also sprang up after 1980 to promote the interests of peasants. Although one of these organizations--the Coordinating Committees of Agricultural Producers (Comit�s de Coordinaci�n de Productores Agricolas)--was sponsored by the government, its leaders sometimes assumed positions not in line with official policy. Associations of peasants sponsored by the Roman Catholic Church were formed to establish cooperatives and commercialize crop production. A variety of rural organizations loosely grouped themselves into the Paraguayan Peasant Movement (Movimiento Campesino Paraguayo--MCP) in 1980. The MCP included associations of peasants and landless workers as well as the Permanent Commission of Relatives of the Disappeared and Murdered, which dealt with victims of repression in the rural areas.

Although small, the MCP was quite successful in mobilizing the rural poor. For example, in July 1985, it brought together more than 5,000 landless peasants in Caaguaz�, where they established the Permanent Assembly of Landless Peasants (Asamblea Permanente de Campesinos sin Tierra--APCT). Despite government harassment, the APCT claimed to be the nation's largest independent mass organization with a membership of 10,000 families. Its objectives were spelled out in a thirteen-point program advocating a radical transformation of society.


Paraguay - Students


In recent decades, public education has been tightly controlled by the government, and private educational institutions also had to conform. Public-sector educational personnel, from the minister of education and worship down to the primary school teachers, had to belong to the Colorado Party. The Catholic University, although subject to pressure and even invasion by the police, enjoyed a somewhat more open environment for teaching and research than did the National University.

For most of the Stronato, students at the public and Catholic universities were represented by the government-sponsored University Federation of Paraguay (Federaci�n Universitaria del Paraguay -- FUP). In June 1985, however, several hundred law students demonstrated publicly in favor of freedom of the press and an end to corruption. Following the death of a law student, violent confrontations erupted with the police in April 1986. The student movement removed itself from the control of the National Committee of the Colorado Party, and the FUP was disbanded. In April 1987, a new organization, the Federation of University Students of Paraguay (Federaci�n de Estudiantes Universitarios del Paraguay -- FEUP) was formally launched at a meeting attended by 5,000 students. The FEUP participated in the national dialogue although the union was not legally recognized.


Paraguay - The Media


Although there was some improvement in the human rights situation in Paraguay in the late 1980s, the same cannot be said regarding the media. The Stroessner regime did not hesitate to silence newspapers and radio stations that became too independent and critical. The only media that remained critical and were allowed to function belonged to the Roman Catholic Church.

In 1988 there were five progovernment daily newspapers in Asunci�n: El Diario de Noticias, Hoy, La Tarde, Ultima Hora, and Patria. Ultima Hora demonstrated somewhat more independence from the regime than the other four. Weekly newspapers included one published by the Colorado Party, Mayor�a, and another, more or less independent, Nande, which practiced self-censorship. There was one opposition weekly, Sendero, published by the Roman Catholic Church. It had a limited circulation and was often confiscated off the streets. In addition, Mario Medina, bishop of Benjam�n Aceval, published a monthly journal, Nuestro Tiempo, that focused on land problems, human rights issues, and problems with freedom of the press. Because of government harassment, the journal was printed in Brazil. Consequently, getting it into Paraguay was difficult; the maximum circulation of 300 copies was either hand delivered or mailed in disguised envelopes.

In the early 1980s, ABC Color was the largest selling daily newspaper, having a circulation of 85,000. The newspaper was founded in 1967 by Aldo Zuccolillo--a wealthy businessman and confidant of Stroessner and others in his inner circle--and was originally supportive of the regime. The paper began to focus on polemical issues, however, including corruption among senior government officials and the negative aspects of the Treaty of Itaip� with Brazil, and included interviews with opposition politicians. Its circulation increased, and it became the most important source in Paraguay for independent information. In May 1983, ABC Color' offices were surrounded by troops, and Zuccolillo was arrested. Following further harassment, the newspaper was shut down in March 1984 by order of the minister of interior. Despite resolutions in the United States Congress, protests by the United States embassy in Asunci�n, and protest visits by the Inter-American Press Association, as of 1988 ABC Color remained closed.

In the late 1980s, there were two semi-official television stations and fifty-two radio stations, only three of which were independent. One of the latter was Radio Caritas of the Roman Catholic Church. Until it was closed in January 1987, the most important independent station was Radio �andut�. The station's popular live phone-in program frequently aired complaints about corruption and the lack of democracy. In July 1983, however, Radio �andut�'s director, Humberto Rub�n, was arrested several times; in April and May 1986, the station was attacked by Colorado vigilantes. After months of jamming and other harassment, Radio �andut� was finally forced off the air.

Although little free media existed in the late 1980s, there was, nevertheless, a certain amount of critical reporting on political and social events and themes in the progovernment dailies. Occasionally reported, for example, were activities of and statements by unrecognized political parties, labor organizations, and community organizations; critical statements by the Roman Catholic Church and the Inter-American Commission on Human Rights; harassment and imprisonment of opposition politicians; and repression of peasants. Self-censorship was predominant, but there was more reporting on critical topics than might have been anticipated under a tightly controlled political system. Most reports did not, however, touch directly upon the president except to praise and esteem him.




Since gaining independence, Paraguay's fortunes have been largely determined by its relationships with its immediate neighbors. Like Uruguay to the south, it is a buffer state separating Brazil and Argentina--the two largest countries in South America--and, like Bolivia to the west, it is landlocked. The circumstance of being landlocked has historically led the country alternately into isolationism and expansionism; its buffer status has underwritten its sovereignty. Paraguay's foreign policy has traditionally aimed at striking a balance between the influence of its two large neighbors.

Foreign policy under Stroessner was based on two major principles: nonintervention in the affairs of other countries and no relations with countries under Marxist governments. The only exception to the second principle was Yugoslavia. Paraguay maintained relations with Taiwan and did not recognize China. It had relations with South Africa but not with Angola or Mozambique. Paraguay broke diplomatic relations with Cuba in 1959 after the Castro government provided support to Paraguayan radicals. It terminated relations with Nicaragua in 1980 after the assassination in Asunci�n of Anastasio Somoza Debayle, the deposed Nicaraguan dictator. It was a member of the United Nations (UN), the Organization of American States (OAS), and the Latin American Integration Association, and a signatory of the 1947 Inter-American Treaty of Reciprocal Assistance (Rio Treaty).

Foreign Relations with ...
<> Argentina and Brazil
<> The United States


Paraguay - Argentina and Brazil


Paraguay had traditionally been aligned with Argentina, as the port of Buenos Aires provided the only access to external markets, thus determining the direction of Paraguayan trade. Paraguay depended heavily on Argentina for trade throughout the twentieth century, although many Paraguayans chafed at their dependence. Even before taking power in 1954, Stroessner criticized Argentine hegemony. Soon after becoming president, Stroessner joined with sectors in the Colorado Party and the armed forces to explore ways to limit the influence of Buenos Aires in Paraguayan affairs.

Stroessner's interests coincided with those of Brazil, which desired to increase its influence at the expense of Argentina and to establish transportation linkages with countries to the west. In the 1950s, Brazil funded the construction of new buildings for the National University in Asunci�n, granted Paraguay free-port privileges on the Brazilian coast at Paranagua, and built the Friendship Bridge over the R�o Paran�, thereby linking Paranagua to Asunci�n. The signing of the Treaty of Itaip� in April 1973 symbolized that Paraguay's relationship with Brazil had become more important than its ties with Argentina.

The Stroessner regime benefited politically and economically from its relationship with Brazil, and the diplomatic and moral support given to Stroessner enhanced his prestige. Because of the tremendous infusion of money and jobs associated with Itaip�, the Paraguayan economy grew very rapidly in the 1970s. Brazilians moved in massive numbers into the eastern border region of Paraguay, where they helped change the nature of export crops to emphasize soybeans and cotton. Observers reported that 60 percent of Paraguayan economic activities derived from agriculture, industry, commerce, and services were in the hands of Brazilians, working as partners with Paraguayans. Brazilian tourism and purchases of contraband and other goods at Puerto Presidente Stroessner also brought in substantial revenue. 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.

The intimacy of Paraguayan-Brazilian relations generated a variety of problems. First, Paraguayan opposition groups charged that Brazil had become Paraguay's colonial warder. For example, PLRA leader La�no wrote a book denouncing Brazil's designs on Paraguay. The opposition pointed to Paraguay's mounting debt problem in the late 1980s and attributed much of it to unnecessary and inefficient Brazilian construction projects. Some US$300 million of this debt resulted from the controversial Paraguayan Steel (Aceros Paraguayos--Acepar) mill that the Brazilians financed and built. Acepar was completed after the demand from Itaip� had passed, its steel could not be consumed by Paraguay, it imported raw materials from Brazil, and its product was too expensive to be sold abroad. The Itaip� project itself also represented a source of embarrassment for the Stroessner regime. ABC Color, among others, pointed out that the Treaty of Itaip� authorized Paraguayan sales of excess electricity to Brazil at a price highly advantageous to Brazil. Opposition pressure forced a renegotiation of the rate in 1986.

For its part, Brazil also objected to several actions of the Stroessner government. In the late 1980s, a number of public and private Paraguayan institutions failed to pay their debts to Brazilian creditors. As a result, Itaip� electricity payments were withheld, and several Paraguayan accounts were frozen in Brazil. Brazil also contended that Paraguayan officials were involved in smuggling a wide array of products into or out of Brazil. In 1987 analysts estimated that US$1 billion of electronics equipment was smuggled into Brazil, primarily through Puerto Presidente Stroessner. In the same year, Brazilian farmers reportedly smuggled over US$1 billion of agricultural products into Paraguay for reexport, thereby avoiding payments of Brazilian taxes. Analysts also estimated that up to half of all automobiles in Paraguay were stolen from Brazilian motorists. Brazilian teamsters threatened to block the Friendship Bridge between Brazil and Paraguay to protest the alleged murders of truckers whose vehicles were taken to Paraguay.

Despite Brazil's transition to a civilian government in 1985 and the appointment in 1987 of its first nonmilitary ambassador to Asunci�n in twenty years, Paraguayan-Brazilian relations remained good. Given its substantial investments in Paraguay, Brazil valued the political stability offered by the Stroessner regime. Brazilian officials refrained from criticizing Stroessner publicly and generally avoided specific pressures for a political transition in Paraguay. In 1986, however, the president of Brazil met with his counterpart from Argentina to discuss increasing commercial and industrial cooperation in the R�o de la Plata region. The presidents made it clear that only democratic countries were eligible to join this new regional economic integration program. Thus Bolivia, democratic but distant from the Plata, could participate, whereas Paraguay was excluded. Although participation in this program could help the Paraguayan economy, Stroessner was not prepared to change the nature of his regime in order to gain membership. Indeed, Stroessner did not hesitate to challenge Brazil if he believed that Paraguayan internal stability was at stake. In 1987, for example, police attacked several visiting Brazilian congressmen who were meeting in Asunci�n with National Accord leaders.

Diplomatic relations between Paraguay and Argentina were somewhat strained in the late 1980s. During the 1983 Argentine presidential elections, PLRA leader La�no actively campaigned among the thousands of Argentine citizens of Paraguayan descent for the Radical Civic Union (Uni�n C�vica Radical--UCR) ticket headed by Ra�l Alfons�n Foulkes. With the election of Alfons�n, La�no's party was accorded considerable prestige by the Argentine government. Although Alfons�n refrained from public criticism of Stroessner, he did send letters of support to opposition politicians, including the imprisoned Hermes Rafael Saguier of the PLRA. In addition, Alfons�n allowed La�no to stage anti-Stroessner rallies in Argentina. A PLRA demonstration in 1984 in the Argentine border town of Formosa resulted in the Paraguayan government's decision to close that border crossing for three days.

In the late 1980s, Paraguay refused to respond to Argentina's requests for extradition of former Argentine officers accused of human rights abuses during the so-called Dirty War of the late 1970s. Paraguay also ignored queries regarding the illegal adoption of children of disappeared Argentines. As a result, the Argentine ambassador was recalled for three months. Argentine congressmen also visited opposition politicians in Paraguay to demonstrate their support.

Paraguayan opposition leaders expressed dismay at the selection of Carlos Menem as the Peronist candidate for the May 1989 Argentine presidential elections. During the campaign for his party's nomination, Menem met with Stroessner and reminded voters that the Paraguayan president had given asylum to Per�n after the 1955 military coup in Argentina. In late 1988, Menem held a wide lead in the polls over his UCR opponent.


Paraguay - The United States


Between World War II and the late 1970s, foreign relations between Paraguay and the United States were largely conditioned by a complementarity of security interests, the United States interests in trade and investment, and Paraguay's desire for development assistance. Stroessner, believing his government to be threatened by subversive communist elements from inside and outside Paraguay, was one of the staunchest supporters of United States security policies in the hemisphere. On security issues that were raised in the OAS and the UN, Paraguay voted with the United States more consistently than did any other South American country.

In the late 1970s, however, the relationship began to falter as a result of human rights abuses and the absence of political reform. The United States concern with these issues became public after President Jimmy Carter appointed Robert White as ambassador to Asunci�n and persisted through the administration of Ronald Reagan. Ambassador Arthur Davis (1982-85) often invited prominent members of the National Accord to official embassy functions. He also cancelled performances by a United States Army band and a parachute team at the May 1984 Independence Day celebration as a personal protest against the closing of ABC Color.

Concern over political developments in Paraguay continued to be manifested during the tenure of United States ambassador Clyde Taylor (1985-88). Taylor met frequently with members of the opposition, protested the continued shutdown of ABC Color, the harassment of Radio �andut�, and the exile of Domingo La�no. Taylor was criticized by Paraguayan officials, including Minister of Interior Sabino Montanaro, and other members of the Colorado Party. On February 9, 1987, Taylor was teargassed while attending a reception in his honor sponsored by Women for Democracy, an antiStroessner group.

The United States strongly supported the evolution of a more open political system with freedom of the press and expression and the participation of all democratic parties. In June 1987, Assistant Secretary of State for Inter-American Affairs, Elliott Abrams, noted that there were some indications of an improving political climate, which, if continued, could benefit relations between the two countries. He urged the government of Paraguay to institute democracy in order to avoid a rift with the United States and unrest within Paraguay itself. Abrams also was criticized by members of the Colorado Party. The Congress of the United States actively supported the Reagan administration's position on human rights and Paraguay's transition to democracy.

Foreign relations between the United States and Paraguay were also adversely affected by the involvement of some members of Stroessner's government in narcotics trafficking. A 1986 report to the United States House of Representatives stated that there was evidence of military collaboration and even active participation in the operation of cocaine laboratories. In 1987 Taylor, a former deputy assistant secretary of state for international narcotics matters, stated that the level of narcotics trafficking in Paraguay could not have been reached without official protection. In its 1988 annual narcotics report, the United States Department of State also concluded that Paraguay was " a significant money-laundering location for narcotics traffickers due to lax government controls." An investigative story by Cox Newspapers in October 1988 charged that Gustavo Stroessner collected payoffs from all narcotics traffickers conducting business in Paraguay.

In accordance with the Foreign Assistance Act of 1961, the Reagan administration certified to Congress in 1988 that the Paraguayan government was fully cooperating with United States drug enforcement efforts. The administration based this certification, however, on its own national interests rather than on specific actions of the Paraguayan government. Three factors motivated the administration to issue the certification. First, the administration believed that it needed additional time to test the sincerity of Stroessner's professed willingness to cooperate in controlling drugs. In 1987 the United States provided Paraguay with a US$200,000 grant to train and equip an antinarcotics unit. The following year the United States Drug Enforcement Administration reopened a station in Asunci�n after a seven-year absence. Second, the administration feared that decertification could jeopardize the Peace Corps' substantial presence in Paraguay. In 1987 US$2 million was earmarked to support Peace Corps activities in Paraguay. Finally, the administration contended that certification enhanced the ability of the United States to encourage democratic reform in Paraguay.

Economic relations between the United States and Paraguay were minimal in the late 1980s. The United States invested only a small amount in Paraguayan banking and agriculture and conducted little trade. In January 1987, by an executive order of President Reagan, Paraguay was suspended from receiving benefits through its membership in the Generalized System of Preferences. Although Paraguay still belonged to the system, it could no longer take advantage of the preferential tariff treatment for its exports to the United States. Despite the relatively low level of its exports, observers regarded the suspension as symbolically important. As of mid-1988, the suspension remained in effect.

At the end of 1988, both continuity and change marked the Paraguayan political system. The government continued to take a strong stand against political dissidents, and PLRA leaders were periodically detained to prevent them from staging rallies. The PDC suspended its planned national convention after the minister of interior refused to authorize it. Students belonging to the MDP were arrested for putting up the movement's posters. Police arrested five former priests from Western Europe, accused them of belonging to an extremist organization, and deported them to Argentina. At the same time, however, signs of political change appeared. A silent protest march sponsored by the Roman Catholic Church attracted an estimated 50,000 participants, making it the largest opposition event of the Stroessner era. When Chilean voters rejected the bid by Augusto Pinochet Ugarte to extend military rule well into the 1990s, the prospect of a civilian president in Chile by 1990 only served to further isolate Stroessner from the democratic trend sweeping South America. Finally, the seventy-six- year-old general's cancellation of public appearances in September because of health problems caused many to speak openly of a postStroessner Paraguay.


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CITATION: Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-1999.

Please note: This text comes from the Country Studies Program, formerly the Army Area Handbook Program. The Country Studies Series presents a description and analysis of the historical setting and the social, economic, political, and national security systems and institutions of countries throughout the world.

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