- Paraguay experienced over 60 years of rule by the Colorado party, which ended in 2008 with the election of Fernando Lugo as president. - Lugo faced challenges governing without a strong party behind him and had difficulties implementing reforms due to inexperience in his cabinet and strained relationships with other political forces. - While Lugo aimed to lead the Paraguayan people, limitations emerged in his ability to effectively lead the Paraguayan government and realize his economic and social agenda.

1. PARAGUAY AFTER 60 YEARS OF ONE PARTY RULE Fernando Masi April 2009

6. Source: DGEEC and BCP. Paraguay’s Main Economic and Social Indicators 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 GDP Growth (%) 3.0 -3.3 2.1 0.0 3.8 4.1 2.9 4.3 6.8 5.8 Inflation rate 14.6 8.6 8.4 14.6 9.3 2.8 9.9 12.5 6.0 7.5 Fiscal Surplus (Deficit) (as % of GDP) - (4.6) (1.2) (3.8) (0.6) 1.6 1.6 - 1.0 0.5 Debt (as % of GDP) - 46.1 47.7 65.5 60.7 47.8 40.7 33.0 25.9 21.4 Reserves (in millions of US$) 874.8 771.9 723.1 641.3 983.4 1168.0 1293.0 1703.1 2461.8 2864.1 Poverty (as % of population) 32.1 33.9 33.9 - - - 38.2 - 35.6 - Extreme poverty (as % of population) - - - 21.7 20.1 17.1 15.5 - 19.4 - Unemployment – formal sector (% of labor force) 14.3 15.9 15.3 16.4 13.0 10.9 9.4 11.4 5.6 - Underemployment – informal sector (% of labor force) 19.1 17.6 22.1 22.4 24.1 24.2 25.1 24.0 26.5 -

11. Paraguay’s Presidential Elections, 2003–2008 CANDIDATE VOTES PERCENTAGE 2003 2008 2003 2008 2003 2008 Duarte Frutos Ovelar de Duarte 547,232 573,562 37.1 30.6 Sánchez Oviedo 208,391 410,637 13.5 21.9 Total for ANR & UNACE 755,623 984,199 50.6 52.5 Julio Franco Lugo 370,349 766,502 24.0 40.9 Fadul Fadul 328,916 44,060 21.3 2.4 Total for Opposition 699,265 810,562 45.3 43.3 + ANR is the Colorado Party; UNACE is the National Union of Ethical Citizens; PLRA is the Liberal Party; and PPQ is the Beloved Homeland Party. ‡ The PLRA ran alone in 2003 and as part of the APC coalition in 2008.