Paraguay is a partner country for German Development Cooperation. GTZ has been working there since 1974 on a behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

22 percent of the population live below the poverty level, and the average income is US$ 380 (2002). In the Human Development Index, Paraguay ranks 89th. 25 percent of the population are aged 19-25.

After 35 years of dictatorship, the country has since 1989 been in a far-reaching process of transition from a military regime to a civilian government, from arbitrary rule to a constitutional state, from a centrally planned semi-nationalised economy to a market economy. Paternalism is giving way to a self-confident civil society, decentralisation is on the way to replacing the former centralism.

The establishment of a democratic modern state is an important component in Paraguay’s transformation. Numerous efforts are being made to press ahead with modernising the state and setting the democratic process on a firm basis.

The government programme for 2003-2008 links sustainable development and modernising public administration with the goals of restoring confidence in state institutions, active popular participation in establishing democratic institutions, reviving the economy and employment, reducing poverty, combating corruption and improving public safety.

GTZ activities are consistent with the partner country’s development strategy and are aligned with its approach. This consists of good governance at a decentralised level, popular participation, local economic development and poverty reduction.

In cooperation with projects of other donors, German Technical Cooperation is currently focusing on modernisation of the state and decentralisation, including poverty reduction, and conservation and sustainable management of natural resources.

Gender, youth and the environment are important themes, and are reflected in the strategies for action.

GTZ is cooperating with the development activities of other donors, such as the EU, the Agencia Española de Cooperación Internacional (AECI), World Bank and Inter-American Development Bank (IDB). Complementarity of measures is ensured by cooperation agreements with the KfW Entwicklungsbank (development bank), USAID, UNICEF and the Economic Commission for Latin America and the Caribbean (ECLAC).