The Republic of Paraguay is a landlocked country located in the heart of South America, occupying a total land area of 406,752 km². It is bordered by Brazil and Bolivia to the north, Brazil and Argentina to the east, Argentina to the south, and Argentina and Bolivia to the west.
The Paraguay River divides the country into two natural, markedly different regions, the Eastern or Paraneña region and the Western or Chaco region. The Paraneña region covers an area of 159,827 km² with a mixture of plateaus, mountain ranges, rolling hills, valleys, and a dense network of navigable rivers; its main orographic features include the Amambay, Mbaracayu, and Caaguazu mountain ranges. The Chaco region is a vast expanse (246,925 km²) of lowlands averaging 125 m in elevation and scarce water bodies. This region is, in turn, subdivided into the Alto Chaco (Upper Chaco) or Chaco Seco (Dry Chaco) bordering on Bolivia, and the Bajo Chaco (Lower Chaco) or Chaco Húmedo (Humid Chaco), bordering on the Paraguay River.
The Paraneña region has a subtropical, humid climate with mean annual temperature of 24 °C, abundant precipitation evenly distributed throughout the year, and only moderate seasonal changes in temperature. The Chaco region has a tropical climate with mean annual temperature of 28 °C, and distinct wet and dry seasons, bordering on semi-arid. Precipitation increases from 400 mm per year in the Chaco region to over 1700 mm per year on the banks of the Paraná River in the Paraneña region. In general, rainfall is concentrated in the summer months, while the winter is drier. Interannual variability is strongly influenced by El Niño/La Niña events; El Niño events bring heavy rains and cooler weather, while La Niña episodes bring in dry, warmer weather.
Paraguay is criss-crossed by numerous rivers. The Paraguay (2,600 km long) and Paraná (4,500 km long) are the country’s major rivers.
Paraguay is a democratic republic, administratively divided into one Capital District and 17 departments, 14 of which (Concepción, San Pedro, Cordillera, Guairá, Caaguazú, Caazapá, Itapúa, Misiones, Paraguarí, Alto Paraná, Central (where the capital city is located), Ñeembucú, Amambay, and Canindeyú) are located in the Eastern region and three (Presidente Hayes, Alto Paraguay, and Boquerón) in the Chaco region. The capital and largest city is Nuestra Señora de la Asunción (known as Asunción) , , .
With an estimated total population of 7.252 million inhabitants (50.4% men, 49.7% women) and 17.7 inhabitants per square kilometre (as of 2020), Paraguay is one of the most sparsely populated countries in the Latin American and Caribbean (LAC) region. The population is still growing rapidly but at a declining rate (1.38% estimated annual growth rate as of 2020) and is projected to reach over 7.758 million inhabitants by 2025. Half of the population is 26.6 yr old or younger (as of 2020). The population includes mostly mestizo and some 113,254 indigenous people (as of 2012, date of the latest population census) .
The spatial distribution of the population is highly uneven. About 95% of the population resides in the Paraneña region at an average density of about 44 inhabitants/km²; population density in the Chaco region does not reach 1 person/km². The Central and Alto Paraná departments concentrate 41.8% of the country’s population (as of 2020).
Paraguay has been experiencing a rapid urbanisation process since the 1980s, as a result of rural-to-urban migration and population growth in urban zones. Some 62.5% of the population was estimated to live in urban zones in 2020, compared to 59.2% in 2012, and 54.6% in 2002 (dates of the latest population censuses). Some 521,559 people (7% of the country’s population) were estimated to live in Asunción city in 2020 , .
With a 2019 UNDP’s Human Development Index value of 0.728 and a Gross National Income per capita of $5,180 (as of 2020), Paraguay is regarded as a high human development, upper-middle income country. The country possesses vast natural resources, with a growing and productive agricultural and livestock sector; it is the sixth-largest soybean producer in the world, the second-largest producer of Stevia leaves, and the ninth-largest exporter of beef. Paraguay is also one of the world’s largest exporters of electric power.
After emerging from a prolonged period of economic and political instability, Paraguay has attained the largest economic growth in Latin America in the last 20 years. GDP grew at a 3.6% average annual growth rate over the 2001–2019 period, with eventual contractions caused by adverse impacts of droughts and disease on crop and cattle production, respectively. Industry (production of cement, iron ore, steel, and petroleum derivatives; maquila; and pharmaceutical production) and the agriculture and livestock raising sector make the bulk of Paraguay’s economic activity; these sectors accounted for 33.7% and 10% of the 2019 GDP, respectively.
Thanks to the vigorous growth of the overall economy, general poverty decreased from 45.1% to 23.5%, and extreme poverty from 11.5% to 4.0%, between 2001 and 2019 countrywide. However, social inequality remains; general poverty was still twice as large in rural (33.4%) than in urban (17.5%) zones, and extreme poverty four times larger in rural (7.8%) than in urban (1.8%) zones in 2019. Wealth is highly unequally distributed, with the richest 10% of the population holding 35.2% of the national income, against the 1.8% held by the poorest 10% (as of 2019). The Gini inequality coefficient was 45.7 in 2019, the 25th highest in the world.
Paraguay has been severely affected by the COVID-19 pandemic. GDP contracted by 0.57% and – despite the social support programmes implemented by the government – about 264,000 people are estimated to have fallen into poverty in 2020. Total poverty increased to about 26.9% in 2020 countrywide, but grew particularly in urban areas, from 17.5% in 2019 to 22.7% in 2020, while remaining highest in rural areas at 34% , , , , , , , .
Paraguay currently has an advanced telecommunication system and internet services. In 2005, 94.7% of the population had access to electricity (98.4% vs. 89.6% in urban vs. rural areas), fixed telephone services had a coverage of only 5.5 subscriptions per 100 people, the penetration of cellular phone services was 32.4 subscriptions per 100 people, and only 7.9% of the population were using the internet. Thanks to the vigorous economic growth of the last 15 years, access to electricity increased to 100%, the penetration of cellular phone services to 110.2 subscriptions per every 100 people, and 68.5% of the population were using the internet by 2019.
All of Paraguay's electricity is generated by three large hydroelectric plants, Central Acaray (owned by Paraguay), Yaciretá (shared with Argentina) and, above all, the Itaipu Dam (shared with Brazil), the world's second largest hydro power plant. Electricity generated meets all of Paraguay’s national demand for electricity and the abundant excess production is exported regionally to Brazil, Argentina, and Uruguay. However, with a limited distribution network, local-scale energy consumption is dominated by traditional biomass (charcoal or firewood, 50%), followed by hydrocarbons (36%), and electricity (14%). Paraguay’s National Development Plan (2014–2030)  aims to diversify the country’s energy resources and ensure a reliable energy supply by diversifying the energy mix to biomass, wind, and solar photovoltaic energy generation .
Paraguay is often affected by extreme weather events. The alluvial plains and hills of the Paraneña region, where most of the country’s population lives, are subject to landslides and floods triggered by heavy rains on degraded forest and riparian ecosystems. Droughts are common in the Chaco region, particularly during La Niña events and the December–February period. Abnormal climatic conditions associated with El Niño events produce high temperatures and heavy rains during November and December, often causing severe floods , .
The recent period of prosperity in Paraguay is a break from a long period of political and economic instability that, since the 1980s, had hindered the country’s progress.
Still suffering from the debt crisis of the 1980s (a period known as the “Latin American lost decade”) caused by the inability of many Latin American countries to service their foreign debt, the country entered into a period of political and economic instability. Political turmoil was first triggered by the 1989 coup d’etat that ended the 35-yr long, USA-supported, Alfredo Stroessner‘s dictatorship. The ensuing democratic transition led to the adoption of a new constitution (in 1992) that established a democratic system of government, and the fair, free election of Paraguay's first civilian president in almost 40 years (in 1993).
Renewed political turmoil soon followed, including a coup d’etat attempt in 1996, the assassination of the then Vice-President Luis Maria Argan and eventual resignation of President Cubas in March 1999 (the Paraguayan March), and a new coup d’etat attempt in May 2000.
After sixty years of one-party rule, the non-politician (but backed by the opposition party) Fernando Lugo was elected president in 2008 in an orderly and peaceful fashion. President Lugo was impeached in 2012.
Horacio Cartes was elected president in 2013 but his initiative to amend the constitution to allow for presidential re-election led to violent, widespread protests (the 2017 Paraguayan crisis). Finally, Mario Abdo Benítez won the 2018 presidential election. The COVID pandemic led to widespread protests against the Abdo administration, amid accusations of corruption , .
The National Environmental Policy (PAN, for its acronym in Spanish)  provides the overall framework for all environmental management and planning in the country. It aims to "conserve and fit the use of Paraguay's natural and cultural heritage to guarantee the sustainable development, equitable distribution of its benefits, environmental justice, and quality of life of the present and future population". The PAN is currently under revision.
The environmental regulatory framework includes various instruments governing specific themes (e.g., forests, wildlife, environmental impact assessment, protected areas, fisheries, etc.) but no general environmental law.
The 2000 Law No. 1.561/2000  created the National Environment System (SISNAM), the National Environmental Council (CONAM), and the Ministry of the Environment (MADES). SISNAM brings together all the national, departmental, and municipal level government entities with environmental competences in order to avoid inter-institutional conflicts, jurisdictional gaps or overlaps, and coordinate and harmonize their actions to efficiently address environmental issues and attain the National Environmental Policy’s objectives. CONAM is an inter-institutional, collegiate, consultative body aimed to define, supervise, and evaluate the National Environmental Policy, as well as to formulate standards, criteria, and guidelines to address the issues/questions submitted by the Ministry of the Environment.
Despite the progress made in constructing Paraguay’s environmental policy framework, implementation and enforcement remain challenging. Environmental issues including biodiversity loss, pollution of air and water bodies, unregulated hunting and fisheries, and inadequate management of solid waste and wastewaters have not been solved due, in part, to managerial and budgetary deficiencies in the regulatory and institutional framework .
In addition to the domestic policy and regulatory framework, Paraguay is party to several multilateral environmental agreements, including those that emerged from the 1992 Earth Summit, the 2030 Agenda and its Sustainable Development Goals, and the 2015 Paris Agreement on climate change, among others.
Paraguay’s 2014 National Development Plan  set the agenda for mid-term development with a 2030 horizon. The agenda envisions three strategic axes (poverty reduction and social development; inclusive economic growth; and inserting Paraguay into the world) and four cross-cutting themes (equality of opportunity, efficient and transparent public management, territorial development and land management, and environmental sustainability), that jointly form 12 strategies. Several strategies and objectives are neatly aligned with the EU’s focus on prioritizing climate action consistent with the Paris Accord, and with its Biodiversity and Forest Strategies.
Strategy 2.4 Valuing environmental capital aims to increase by 60% the use of renewable energy and reduce by 20% the use of fossil fuels by 2030 by diversifying the country’s energy mix incorporating renewable energies (solar, wind, biomass); strengthen the country’s capacity to manage water, forests, and other natural resources; protect and sustainably manage biodiversity; strengthen the forest inventory incorporating criteria for sustainable forest management; promote the sustainable management of forest ecosystems; and encourage reforestation activities aimed at reducing the loss and degradation of native forests.
Strategy 3.4 Sustainability of the global habitat aims to restore at least 20% of degraded ecosystems; increase national revenue through the sale of carbon credits; increase the coverage of forest and protected areas; fulfil the country’s commitments to the UNFCCC; plan for climate change mitigation and adaptation across the country’s sectors; conserve the country’s biological heritage through the control of protected areas and watersheds, etc.
The National Development Plan is aligned with EU interests in Paraguay. Reflecting both EU and Paraguayan policies, and to respond to some key challenges in the country, two priorities areas have been selected for EU partnership with Paraguay for the period 2021-27. These priority areas are: (i) Green and Resilient Economy and (ii) Fight against Inequalities .
Paraguay endured some 42 climate-related natural disasters or emergencies between 1980 and 2020, including droughts (8), floods (24), heavy rains/storms (8), and wildfires (2). Those events resulted in 248 deaths, over 3.7 million people affected, and material damages estimated at over 296 million. For instance, the riverine floods along the Paraguay River in March–May 2019 damaged 347 schools, affected over 520 thousand people, and caused 40 deaths. Five departments have been identified as the most vulnerable ones to climate-related disasters, given their local socio-economic conditions: Caazapá, Concepción, Canindeyú, Caaguazú, and Itapúa.
Since Paraguay’s economy relies heavily on agriculture (soy), animal livestock (beef) raising, and hydroelectric energy production, it is highly vulnerable to these climate-related hazards. Droughts lead to water supply shortages for human, agriculture, and livestock needs, and adversely affect hydroelectric generation; heavy rains and floods damage agricultural output and threaten operations at hydroelectric power plants. For instance, the protracted drought that began in late 2018 (and is projected to continue through early 2022) has severely hit the agricultural, livestock raising, and hydroelectric sectors , .
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