Paraguay Sustainability Issues

The critical environmental and sustainability issues of Paraguay:

1. Environmental Issues

Between 1990 and 2000, Paraguay had an average deforestation rate of 1%. The rate increased between 2000 and 2005 to 1.92%. Paraguay also has a growing pollution problem. Many of the country’s rivers suffer from toxic dumping. Tanneries are particularly harmful, releasing mercury and chromium into rivers and streams. Run-off from toxic chemicals used by farmers also seeps into Paraguay’s waters. In the Chaco, the salinization of already arid land makes farming even more difficult. Furthermore, poachers have almost free rein in Paraguay, and continue to foster the illegal trade in armadillo, deer and crocodile skins.


2. Corruption

Paraguay is the 137 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International. The global anti corruption watchdog Transparency International describes Paraguay as a “monolith in the study of corruption,” a country that offers a case study on the difficulty of recovering from a dictatorship that institutionalized corruption. Paraguay, a small, landlocked country of fewer than seven million people in the middle of South America, has a long history of conflicts, revolutions and coups d’état followed by 35 years of autocratic government under Gen. Alfredo Stroessner, a serial violator of human rights who actively promoted corruption. The country has not yet thrown off that yoke, despite some earnest efforts. Several institutions have been set up to fight corruption, but they have run up against deeply entrenched habits of graft in politics and the judiciary. 


3. Poverty

In 2013, Paraguay experienced the largest economic growth among all Latin American nations – an impressive 13 percent. Yet, nearly 30 percent of the population lives in poverty. Even with growth soaring, Paraguay was ranked towards the bottom of South American nations when it came to reducing poverty over the last decade. Paraguay has been one of the poorest and most unequal nations in the continent for a long time. The total poverty rate — defined by the World Bank as those with an income of less than $3.10 a day — of Paraguay rose in 2016 from 26.6 percent to 28.8 percent. The extreme poverty rate, those with an income less than $1.90 a day, also rose from 5.4 percent to 5.7 percent.

Part of this rise is due to a lack of taxation. Paraguay did not have an income tax until 2013, and even then, the across-the-board rate was 10 percent and few were actually expected to pay it. Tax collection in Paraguay is only equivalent to about 18 percent of gross domestic product, which is less than African nations like Congo or Chad. No taxes means no spending for anti poverty projects.

A lack of taxes may also be driving the increasing inequality. 77 percent of the land in Paraguay is controlled by 1 percent of the nation’s landowners. The booming agriculture industry is highly mechanized and does not offer a lot of jobs to workers. 

While poverty has declined in urban communities, it runs rampant in rural areas. Forty percent of the rural population lives in poverty. Rural workers have little access to land, markets, technology and financial resources. Other causes of rural poverty may include a deterioration of natural resources and a loss of soil fertility. Women and indigenous people are also more likely to be impoverished.


4. Political Conflict

Paraguay has had a long history of political conflicts with ramifications still continuing today. The current political environment in Paraguay has been shaped by the country’s turbulent political history. Paraguay was defeated in the War of the Triple Alliance (1864-1870) against Argentina, Brazil and Uruguay and lost 25% of its territory and over half of its population. This defeat led to an extensive period of political instability, with three civil wars in the first half of the 20th century. In the late 19th century, a two-party political system emerged with the formation of the Colorado Party and the Liberal Party, but the Colorado Party soon became the dominant political force, ruling between 1887 and 1904. The Liberal Party captured control of the government and ruled from 1904 until 1940. A war with neighboring Bolivia between 1932- 1935, the Chaco War, further weakened political institutions and hindered economic development until the military assumed control in 1940 and governed through a succession of authoritarian leaders. The Colorado Party returned to power in 1946, consolidating its control through the military, dominant economic groups, and the state bureaucracy. In the late 1940s, the party assumed greater control over state institutions to the point where party membership was a prerequisite for civil service positions and promotion in the military. General Alfredo Stroessner, a member of the Colorado party, staged a coup in 1954, and consolidated power in a repressive military dictatorship. Stroessner, who engineered his “election” to complete the unexpired term of his predecessor, was subsequently re-elected seven times, ruling almost continuously under the state of siege provision of the constitution, with support from the military and Colorado Party. 

Nominally governed by a constitution approved in 1967, Stroessner’s rule increased the isolation of Paraguay from the world community. During Stroessner’s 35-year rule, (known as the Stronato), political opponents were systematically harassed and persecuted, accused of communist sympathies or posing a threat to state security. The demise of the Stroessner military dictatorship in 1989 initiated a challenging political transition over the next 20 years. Due in large part to the country’s authoritarian past, Paraguay’s state institutions had remained weak while corruption continued to undercut democratic consolidation and economic development. In 1992, a new constitution was adopted, and in 1993, Paraguay elected its first civilian president in almost 40 years. For the next 15 years, however, Paraguay’s democracy alternated between periods of greater and lesser instability, including an attempted military coup, the assassination of a Vice President, and the resignation of a President.

The political instability continues to hamper the socio economic growth of the country due to frequently dysfunctional governments. 


5. Lack of Jobs

According to official projections, almost 60% of the country’s almost seven million people are between 15 and 64 years old. That means an extraordinary proportion of Paraguayans are of working age, and a relatively small segment, consisting of children and the elderly, is dependent.

Unfortunately, the statistical data does not imply an upsurge in productivity and economic growth; the country’s current economic structure does not have room for so many new workers. The Paraguayan government has yet to create a plan for integrating them, much less for putting in place differentiated pathways for employment of young people and vulnerable groups.

Without such policies, Paraguay’s demographic bump, which is projected to continue through to 2025, will have the opposite effect to creating an economic boom. It will deepen inequality and poverty, boost the informal economy and actually spur emigration. After recovering from a deep crisis in 2012, the Paraguayan economy has actually been growing at a steady clip, with GDP rising by 4.7% in 2014 and 5.2% in 2015.

But structural weaknesses are apparent. The mainstays of the Paraguayan economy are commodities and hydropower, which accounted for 25.6% and 24.9% of its GDP, respectively, in 2015. After that comes the underground economy, Paraguay’s third most important economic sector, according to one Treasury Ministry official in an interview conducted by the author in 2010. This mainly comprises smuggling activities on different scales. 

There’s underemployment, which hovers at 19% (only 5.34% of Paraguayans are fully unemployed). Among the 3.3 million people nationwide who have jobs, 664,000 either work less than 30 hours per week “but would like to work more, and are available to do so”, according to the above-mentioned DGEEC bureau. Or they work 30-plus hours but are paid less than minimum wage“.