Paraguay is part of the Southern Cone and a member of Mercosur, the Southern Common Market. Paraguay has no significant energy production except for some hydroelectric power generation.

GENERAL BACKGROUND
Paraguay is a country of approximately 5.5 million people the vast majority of which live in the east and within 100 miles of Asuncion, the capital and largest city. Paraguay has one of the most homogeneous populations in South America. About 95% of the people are of mixed Spanish and Guarani Indian decent. Guarani and Spanish are the official languages with about 75% of all Paraguayans speaking Spanish.

General Alfredo Stroessner assumed control of the government in 1954 and ruled with the support of the Colorado Party and the military for the next 34 years. He ruled the country under the state-of-siege provision of the constitution. His regime was marked by severely limited political freedoms and opponents were systematically harassed and persecuted. Throughout this period, Paraguay was isolated from the world community. On February 3, 1989, General Stroessner was overthrown in a military coup lead by General Andres Rodriguez. On May 1, 1989 presidential, congressional, and municipal elections were held. General Rodriguez, as the Colorado Party candidate, was easily elected president and opposition candidates won several races in municipal elections. General Rodriguez instituted political, economic, and legal reforms and also reestablished ties with the international community. By June 1992, a new constitution went into effect that protected fundamental rights and established a democratic system of government. On May 9, 1993, Paraguay held what international observers deemed their most free and fair elections. Colorado Party candidate Juan Carlos Wasmosy was elected president for a five year term along with a majority-opposition Congress. As Paraguay's first civilian president in nearly 40 years, Wasmosy promised to consolidate the country's democratic transition, reform the state, and improve respect for human rights. Since 1989, the government has eliminated foreign exchange controls and implemented a free-floating exchange system, reformed the tax structure and established tax incentives to encourage and attract investment, reduced tariff levels, initiated a stock exchange market, began financial reforms, and pledged to privatize state-owned enterprises.

The government is currently reforming the judicial system and continuing the process of adopting new Civil and Agrarian Codes. However, since 1996 the Colorado Party has become increasingly radical and anti-reformist. Some leaders of the party have openly expressed their opposition to privatization and downsizing of the state. This opposition has called into question the future of economic reforms. In addition, many sectors of Paraguayan society have grown accustomed to public enterprises and have resisted privatization.

ENERGY
In April 1997, Adair Oil International, a Canadian company, acquired a 7 million acre concession in southeastern Paraguay near the Brazilian border, in the hope of finding up to 3 billion barrels of recoverable oil. Despite promising geology, Paraguay has been a disappointment to different oil companies over the last several decades. But with an improving political environment, and a reduction in the royalty rate from 22% to 14%, Adair is planning to spend $20 million over the next 12 months on seismic studies and exploratory drilling.

In March 1997, the World Bank authorized an inspection into the Yacyreta dam, a joint Argentina-Paraguay project. Cost overruns and delays on the project led to the investigation. The project has already cost $8.2 billion, compared with an original estimate of $1.5 billion, and is now 9 years behind schedule. With Paraguay's large hydroelectric capacity, Paraguay is seen as the main electric power supplier for the Southern Cone. When the Yacyreta dam is completed, Paraguay will be the region's largest exporter of hydroelectric energy.

COUNTRY OVERVIEW
President: Juan Carlos Wasmosy
Independence: May 14, 1811 (from Spain)
Population (7/96): 5.5 million
Location/Size: Central South America, northeast of Argentina/157,000 square miles - slightly smaller than California
Capital: Asuncion
Languages: Spanish (official), Guarani
Ethnic Groups: Mestizo (mixed Spanish and Indian) 95%, whites and Amerindian 5%
Religion: Roman Catholic 90%, Mennonite and other Protestant denominations 10%
Defense: Army, Navy, (includes Naval Air and Marines), Air Force

ECONOMIC OVERVIEW
Currency: Guarani
Market Exchange Rate (8/97): US$1=2,181 guarani
Gross Domestic Product (GDP in US$) (1995): $6.0 billion
GDP per Capita (1995): $1,100
Real GDP Growth Rate (1995): 4.2%
Inflation Rate (1995): 10.5%
Major Trading Partners: European Union, Brazil, Argentina, US
Merchandise Exports (1995): $0.8 billion
Merchandise Imports (1995): $2.9 billion
Major Export Products: cotton, soybeans, timber, vegetable oils, meat products, coffee, and tung oil
Major Import Products: capital goods, foodstuffs, consumer goods, raw materials, and fuels

ENERGY OVERVIEW
Minister of Interior: Miguel Angel Ramirez
Oil Production: None
Oil Consumption (1996): 23,000 barrels per day (b/d)
Crude Oil Refining Capacity (1/1/97): 7,500 b/d
Natural Gas Production: None
Natural Gas Consumption: None
Coal Production: None
Coal Consumption: None
Electricity Generation (1995): 7 gigawatts
Electricity Production (1995): 40.1 billion kilowatthours
Electricity Consumption (1995): 0.3 billion kilowatthours
Electricity Net Exports (1995): 37.0 billion kilowatthours

ENVIRONMENT OVERVIEW
Total Energy Consumption (1995): 76 trillion Btu
Energy Consumption per Capita (1995): 15.3 million Btu (vs. 331.8 million Btu in U.S.)
Energy-related Carbon Emissions (1995): 0.84 million metric tons (0.01% of world carbon emissions)
Carbon Emissions per Capita (1995): 0.17 metric tons (vs. 5.42 metric tons in U.S.)

Links to other sites:
1997 CIA World Factbook - Paraguay

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.

LatinWorld's section on Paraguay

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File last modified: September 18, 1997

Contact:

Lowell Feld
lfeld@eia.doe.gov
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