New Internationalist


June 1982

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Map of Paraguay

Leader: President General Alfredo Stroessner.

Economy GNP is US$1,070 per person per year. Debt service payments 8.5% of exports

Main exports are soybeans and cotton (60%), and wood (15%). Rate of inflation on average 1970-79 was 9.3%

People: 3 millions. Town dwellers 39%: 1 million living abroad.

Health: Child mortality (1-4 years) is 0.7% (Sweden 0.1%). Daily calorie availability 122%. Access to clean water 13%.

Culture Religion: Catholicism universal apart from religious minorities such as the Mennonites

Ethnic Groups: bulk of population is mestizo (mix of Spanish and indigenous groups): small Indian population is rapidly declining.

Language: Guarani and Spanish, often mixed in daily conversation.

Previous colonising power: Spain up to 1811 (Asuncion founded by Spanish in 1537) when overthrown by popular dictatorship of Dr. Francia.

Sources: Most figures from World Development Report, World Bank 1981.

THE constant, high-pitched whine of the space-invaders in the cafes and bars of Asuncion’s Calle Palma, the Rubik cubes stacked awkwardly for sale on its pavements and all the latest electronic wizardry smuggled from Panama, are a clear sign of the times. Even Paraguay, surely one of the most mysterious and isolated countries of the Americas, has been dragged into the international business circuits that peddle the wares of the US and Japanese leisure industries.

Yet these visible tokens of modernity are uncomfortably juxtaposed with the straggling collection of cattle foraging for sparse riverside grasses a few blocks away from the Presidential Palace — and the horse-drawn delivery wagons which have to outmanoeuvre the Mercedes in downtown Asuncion.

By the early seventies Paraguay had exchanged its role as Argentina’s stagnant back-garden to become a part of Brazil’s economic ‘miracle’. The extension of Brazil’s agribusiness boom into Paraguay and the two countries’ joint construction of the largest hydroelectric project in the world gave Paraguay’s economy the highest rate of growth in Latin America.

Since dam construction began in 1973-4, the flow of investment dollars has financed an unprecedented boom in luxury goods for Paraguay’s rich minority. The bulk of these are smuggled from Brazil and Argentina — an arrangement which has the government’s tacit approval as a means of dispensing favours to the powerful and loyal, in much the same way that feudal barons used to parcel out the fiefdoms.

All these untaxed imports are crippling the development of local manufacturing industry, which employs only 18 per cent of the workforce and generates just 17 per cent of Gross Domestic Product. At the same time, opening up the agricultural frontier has produced many peasant casualties. Evicted from their land, they have migrated to Asuncion to swell the ‘informal sector’ where the hours are long, the work scarcely productive and the wages disgraceful.

Far from enhancing their security and well-being, the government’s ‘land reform’ has functioned to supply the agricultural frontier with a cheap labour force — to prepare the terrain for international, regional and, to a lesser extent, local agribusiness. But then how could it be otherwise with economic policy that favours smuggling, speculation and all manner of financial wheeling and dealing and where real wages have fallen by 12 per cent since 1970?

There are two big issues in the country at the moment. The first is the long-term question of what Paraguay should do with the huge amounts of electricity from its hydroelectric projects. The second is whether President Stroessner will perpetuate the dictatorship which he has presided over since 1954. There are deep divisions over whether to sell the electricity or use it to industrialise the country. And there is mounting speculation that Stroessner won’t stand in the presidential elections next year.

Anthony Hill

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Top 20% receive 62% and bottom 20% receive 4% of national average. Growing gap.
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Recent high growth dependent on massive inflows of foreign capital.
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Some improvement for middle classes: forms of traditional discrimination predominate.
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[image, unknown] Fascist-style one-party state led by the military. Token opposition repressed.
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Official 84% is overoptimistic.
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Surprising level of press independence but political opposition constantly harrassed.

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‘Health resources highly concentrated in urban areas. Doctor/patient ratio is 1:2,150. Life expectancy is 64 years.

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Front cover of New Internationalist magazine, issue 112 This feature was published in the June 1982 issue of New Internationalist. To read more, buy this issue or subscribe.

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This article was originally published in issue 112

New Internationalist Magazine issue 112
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