Paraguay, formerly called “The Giant Province of the Indies", was born as a result of the encounter of the Spanish conquerors with the native Guaraní indigenous groups. The meeting of these two distinct cultures was a process that assumed very particular characteristics here, that differs from all its neighbors in South America. The living manifestation of this "crossing" of civilizations is expressed most notably in the use of two languages, Spanish and Guaraní, concurrently throughout the country and legally enshrined by the Constitution. Starting in the 15th century, Paraguay became the main route to other destinations around the continent. Asunción has been traditionally known as “Mother of Cities", serving as a place from where the Spaniards departed to found new Colonies. The Franciscans, on the other hand, arrived in Paraguay in the second half of the 16th Century and they founded several communities throughout the country. Their cultural influence was enormous, due to the fact that they consolidated the life style of locals and the daily use of both, the Spanish and Guaraní Languages. Some of these works of art can be seen in the churches and museums of the cities of Capiatá, Yaguarón, Itá, Altos, Caazapá, Atyrá, Ypané, Piribebuy, and Tobatí, just a short ride from Asunción. A substantial chapter in the history of the country was the presence of the missionaries of the “Company of Jesus” (Jesuits) (1609 - 1768), and constituted one of the great utopian period experiences in the region establishing what was known as the Reductions of Guaraní Tribes. Important testimonies in the country left from that time are: the Ruins of Santísima Trinidad and Jesus (declared World Heritage Site by UNESCO), San Ignacio Guazú, San Cosme and San Damián, Santiago, Santa Maria and Santa Rosa. Arts and music flourished during this period and left an artistic legacy of supreme beauty also known as the “Guaraní Baroque”. The post Jesuit era was characterized by the decrease of population in the Reductions until they were totally abandoned. The balance based on the reciprocity and redistribution, main Jesuit–Guaraní model characteristic was broken due to the spiritual and human power separation. Paraguay becomes independent from Spain in 1811. A Provisional Government is created and ever since, the country has been through different periots including two wars, dictatorships, democratic transition and finally constitutional regimes.
Central South America, northeast of Argentina, southwest of Brazil
406,752 sq km
Subtropical to temperate; substantial rainfall in the eastern portions, becoming semiarid in the far west
Grassy plains and wooded hills east of Rio Paraguay; Gran Chaco region west of Rio Paraguay mostly low, marshy plain near the river, and dry forest and thorny scrub elsewhere
6,541,591 (July 2011 est.)
Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of micro enterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. The economy grew rapidly between 2003 and 2011 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth largest soy producer in the world.. Growth was at 15% level in 2010, the highest in South America, but slowed to 6.4% in 2011.
Paraguay has a geographically privileged position due to the confluence of a very important river system (the Paraguay-Paraná-River-Waterway) and to its location in the middle of the bi-oceanic passage, which allows an easy access to the most important regional ports and markets.
Paraguay offers a healthy investment environment, being characterized by its predictable economy and controlled inflation rates (2.8% in 2004). The country is accurately executing the content of a stand-by agreement with the IMF, and for this reason it has satisfactorily qualified for new loans granted by international financial organizations such as the World Bank and the International Development Bank.
Paraguay has 43.000km of paved roads, and a stabilized growth program. Once finished the transoceanic passage, which is now being constructed, Paraguay will be able to offer one more advantageous way to reach the free-ports located at the Pacific and the Atlantic Ocean.
Exportations are free of VAT (value added tax) payment because government admits a tax credit for the stages before production. There also exists a provisional admission system which allows discharge of import rates and VAT for import.
These zones, in which any commercial, industrial and servicing activities may be developed, mean a significant incentive for business. The legal system offers major advantages in tax exemptions.
Paraguay has the lowest energy price of the MERCOSUR-countries. Itaipú – the bi-national enterprise with Brazil – is the largest hydroelectric power plant of the world in terms of installed power (12.600MW). Paraguay is the main electric power exporter worldwide.
Investment laws give the same treatment to foreign investments as to local ones. Through tax benefits, the new tax regulations are promoting reinvestment. Paraguay signed investment guarantee agreements with several nations. There are many incentives such as the outsourcing program, the free-zones or free trade zones, among others.
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