Congressional Research Service
Informing the legislative debate since 1914
September 6, 2022
Introduction
Paraguay is a landlocked country in South America bordered by Argentina, Bolivia, and Brazil. The United States has had close relations with Paraguay for decades, providing assistance to counter corruption and spur trade and economic development. The United States and Paraguay also work together closely on counterterrorism and counternarcotics, among other security issues of interest to some Members of Congress. In July 2022, the State Department imposed sanctions (visa restrictions) against former Paraguayan President Horacio Cartes (2013-2018) for alleged involvement in significant corruption. In early August, the U.S. government sanctioned Vice President Hugo Velazquez also for alleged corruption and bribery, prompting him to withdraw his candidacy ahead of presidential elections scheduled to be held in April 2023. U.S. sanctions of such high-ranking officials have fueled speculation that tensions in the U.S.- Paraguayan relationship may increase, although neither government has indicated that has occurred.
Political Background
Paraguay had a turbulent political history in the 19t and 20 centuries. In the War of the Triple Alliance (1864- 1870), Paraguay lost one-quarter of its original territory to its opponents–Argentina, Brazil, and Uruguay- and more than half of its population died. Political instability followed for several decades, including three civil wars in the first half of the 20t century. For 35 years, from 1954 until 1989, it was governed by a military dictatorship led by General Alfredo Stroessner, which was ultimately overthrown by a military coup. The newly formed government enacted a more democratic constitution in 1992, and the country has held competitive elections since 1993. The conservative Colorado Party (Partido Colorado, also known as the National Republican Association-Colorado Party or ANR-PC) has dominated Paraguay’s political system. It held power for much of the 20th century, including under the Stroessner dictatorship, and won nearlv every election held since the democratic transition. The only exception was in 2008, when former Catholic bishop Fernando Lugo affiliated with the main opposition party, the Partido Liberal Radical Auténtico (PLRA), won the presidency. The Colorado-led congress impeached Lugo in 2012, removing him from office in a rapid process that was condemned by neighboring countries. The 2013 election of Horacio Cartes returned governmental control to the ANR-PC despite allegations of Cartes’ involvement in money laundering and narcotics trafficking. His attempt to override the prohibition against reelection in 2017 failed but sparked protests, including the partial buning of the capitol in Asunción.
Current Situation and Upcoming Elections
President Mario Abdo Benitez of the Colorado Party was elected in April 2018, defeating an opposition alliance by a margin of less than 4%. He was inaugurated to a five-year term in August 2018. The Colorado Party holds a majority of seats in the Chamber of Deputies and a plurality in the Senate, but the party has two competing factions: Honor Colorado, led by former President Cartes, and the smaller Colorado Añetete, led by President Abdo Benitez. Although former President Cartes helped defeat two opposition attempts to impeach President Abdo Benitez in 2019 and March 2021, intraparty tensions have escalated since. The 2021 impeachment attempt was spurred by protests over the government’s alleged mishandling of the Coronavirus Disease 2019 (COVID-19) pandemic, which overwhelmed Paraguay’s public health system. Political parties must select their presidential candidates for the April 2023 contest via party primaries by December 2022. For the ANR-PC. with Hugo Velázquez out of the race, Santiago Pena, the Honor Colorado-backed candidate and a former finance minister under Cartes, is in the lead to become the party’s presidential nominee. In June 2022, several opposition parties, including the PLRA, formed an alliance, the Concertación Nacional, to select a single opposition ticket.
Paraguay at a Glance
Population: 7.35 million (202l, IMF), 95% of whom identify as mestizo, a mix of Spanish and Indigenous Guarani descent.
Area: 157,047 sq. miles, slightly smaller than California (CIA)
GDP: $38.3 billion (2021 est., current prices, IMF)
Per Capita GDP: $5,207 (2021 est., current prices, IMF)
Top imports: electrical machinery (17%), mineral fuels (13%), mechanical appliances (13%). (2021, TDM)
Top exports: soybeans (29%), meat (16%), mineral fuels (15%), (2021, TDM)
Key trading partners: Brazil (29.1%): Argentina (22.0%); United States (9.1%); China (8.7%) (2021, total trade, TDM)
Legislature: Bicameral Congress, with 45-member Senate and 80-member Chamber of Deputies
Sources: Economist Intelligence Unit (EU); International Monetary Fund’s World Economic Outlook Database (IMF); Central Intelligence Agency’s World Factbook (CIA); World Bank (WB); and Trade Data Monitor (TDM).