Foreign policy and defense
Paraguay has for many decades had the United
States as its main ally, long as a reward for its strong
anti-communist profile. For economic reasons, the
country usually also has a month on relations with
Brazil and Argentina.
During the Stroessner dictatorship (1954–1989),
Paraguay maintained a low profile in the outside world.
The Cold War between the East and the West after World
War II onwards meant that the United States supported
anti-communist countries in Latin America without
interfering with their domestic policies, which
Stroessner took advantage of. During the 1960s and
1970s, Paraguay's foreign policy was also oriented
towards Brazil. The cooperation consisted, among other
things, of various construction projects, such as a
bridge between the countries and the Itaipú power plant
(see Natural Resources, Energy and Environment).
Overview of business holidays and various national observances in Paraguay for years of 2020, 2021, 2022, 2023, 2024 and 2025.
When the Cold War ended towards the end of the 1980s,
US support for Paraguay decreased due to the Stroessner
regime's human rights violations. The democratization of
Argentina and Brazil led to Paraguay becoming
increasingly isolated. The only foreign contacts the
country had were with regimes such as South Africa,
Taiwan and South Korea.
After the fall of the dictatorship, the isolation was
broken and Paraguay has since approached Brazil,
Argentina and the United States. Today, the United
States has the greatest influence over the country,
which is active in the fight against drug trafficking
and organized crime in Paraguay, among others. The two
countries also cooperate militarily, including training
in counterterrorism and drug fighting as well as
Paraguay also followed in the footsteps of the United
States when the country in May 2018 moved its embassy in
Israel, from Tel Aviv to Jerusalem. It is perceived by
many as a symbolically charged position in the conflict
between Israelis and Palestinians.
In 1991, Paraguay, Brazil, Uruguay and Argentina
formed the regional free trade organization Mercosur. In
2008, the Mercosur countries also joined Unasur, which
was intended to be a South American equivalent to the EU.
However, Unasur has been characterized by internal
contradictions and Paraguay was one of six countries
that first canceled their participation in the Union
Both Mercosur and Unasur closed down Paraguay in June
2012, due to the lawsuit against President Lugo (see
Modern History). The exclusion would be valid until the
Paraguayan elections in April 2013. After that, Paraguay
was also re-elected in Unasur but the re-entry into
Mercosur took a little longer as Paraguay's new
president Horatio Cartes was critical of Venezuela being
accepted as a member during Paraguay's suspension.
However, in December 2013, both congresses of Congress
approved Venezuela's membership and Paraguay could
Despite the cooperation, relations with the other
Mercosur countries have been somewhat strained due to
the extensive smuggling to and from Paraguay (see
Economic overview) and the country's military
cooperation with the USA.
Contacts with the left-wing government of Venezuela
improved in the short time that Paraguay was ruled by
President Lugo but has cooled down since he was deposed.
Lugo's good contacts with Venezuela were cited as one of
the arguments for dismissing him.
In practice, relations with Bolivia were frozen from
the end of the Chaco War in 1935 (see Older History)
until the early 2000s. In 2000, Bolivia signed an
association agreement with Mercosur and in 2004 the
country's presidents met for the first time since the
Chaco War. Bolivia and Paraguay signed a peace agreement
in 1938, but it was not until spring 2009 that the
countries could agree on the border demarcation in the
Paraguay is the only country in South America to have
diplomatic relations with Taiwan, and thus not with
China. The two strongly anti-communist governments have
regarded each other as natural allies. Paraguay's
diplomatic backing has generated extensive financial
support from Taiwan. But it is often speculated whether
or not Paraguay will soon "switch sides" and establish
formal relations with Beijing instead. Trade exchanges
with China have grown rapidly and are now much larger
than those with Taiwan.
The defense has traditionally been closely associated
with political power. Even after Stroessner's fall, the
military has played a prominent political role, despite
the fact that militants are not allowed to participate
in political activities. The president is also formally
commander in chief.
Mandatory military service for one year applies to
all men from the age of 18; For recruits in the
country's small marine force (which patrols the rivers),
the military duty is two years.
FACTS - DEFENSE
7,600 men (2017)
The air Force
1 100 Men (2017)
1 950 men (2017)
Military expenditure's share of GDP
1.2 percent (2017)
Military spending's share of the state budget
4.7 percent (2017)
Lugo is threatened with national law, dismisses military commanders
Lugo dismisses the chief of defense as well as the heads of the army, the air
force and the navy after the coup dive. Several senators threaten Lugo with
national law. He is accused, among other things, of neglecting security issues,
stirring up class warfare and corruption in connection with the purchase of land
from Brazilian landowners (see October 2008).
Brazil will pay more for electricity
Paraguay and Brazil agree that Brazil will pay three times more for the
electricity it purchases from the Itaipú hydroelectric plant on the Paraná
border. However, the implementation of the agreement will extend until May 2011.
The opposition wants to dismiss Lugo
The opposition is trying to initiate a civil procedure against President
Lugo, but is not getting enough support from the National Congress.
Lugo confesses paternity
Lugo acknowledges paternity for a two-year-old son, since his mother sued
him. Several women claim that Lugo is the father of their children and that the
children became when he was a bishop. He rejects demands that he resign.
Protest against slow land reform
Thousands of people take part in a protest in Asuncion against slowing land
First phase of land reform
The government presents what is called the first stage of land reform, which
is concentrated on rural development and does not contain any redistribution of