Structural traits of Paraguayan society after three decades

of democratization

Luis Ortiz

The New School University

New York
April 10th 2019
 Presentation

I. Introduction: an overview of Paraguay.

II. Concentration of economic assets and social inequality.

III. Institutions, labor market and social protection.

IV. Social fragmentation and spatial segregation in schooling.

V. Conclusion: Progress and limits of the democratization process.

I. Introduction: an overview of Paraguay.
Map 1. Location of Paraguay in South America

- Land-locked, located in the center of South America.

- Current population: 7,200,000 inhabitants.

- Democratic regime since 1989: formerly, a military dictatorship (1954-1989).

I. Introduction: an overview of Paraguay.

Fig. 1. Evolution of the demographic structure 1990-2015

- Increase in life expectancy.

- Relative decrease in child population

- Relative increase of juvenile and adults.

I. Introduction: an overview of Paraguay.
Fig. 2. Evolution of urban and rural population, 1950-2012
Gráfico 1. Evoluación de la población total y urbana, Periodo 1950-2012
8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0
1940 1950 1960 1970 1980 1990 2000 2010 2020

Población total Población urbana Población rural

- Continuous population growth.

- Recent urban transition: majority urban population since 1992.

- Sustained urbanization and tendency to stagnation of rural population

growth.
II. Concentration of economic assets and social inequality.
The concentration of land ownership undermines the development of an
homogeneous agricultural capitalism in the country.

1991 2008

Table. 1. Land ownership distribution, 1991 – 2008.

93% 91,4%

10% 6,3 %

Source: Riquelme and Kretschmer, 2016.

II. Concentration of economic assets and social inequality.

Income concentration hinders the development of well-functioning internal

market and produces sustained (and increasing) social inequality

Fig. 3. Income distribution, 1997 – 2015 (excluding the highest socio-occupational category)
II. Concentration of economic assets and social inequality.

Income inequality also restricts the expansion of opportunities in society and

reproduces poverty for a third of the population.

Fig. 4. Income distribution, 1997 – 2015 (including the highest socio-occupational category)
II. Concentration of economic assets and social inequality.

The performance of the economy is favorable; it has grown steadily since 2003
at an average annual rate of 5%.

Fig. 5. Economic grow 1950 - 2017

2010

2003

1983
II. Concentration of economic assets and social inequality.

Therefore, social inequality and poverty are the result of political power and
current institutions.

Fig. 6. Economic and Gini coefficient 1996 - 2016

III. Institutions, labor market and social protection.

Taxation is one of the institutions with stronger effects on wealth distribution.

Fig. 7. Tax pressure and evasion of the value added tax

7.1. Presión tributaria comparada (% del PIB), 2014. 7.2. Evasión del IVA. Paraguay y América latina.
III. Institutions, labor market and social protection.

Except for the period 1998 - 2003, the employment rates as a whole have been
very stable and unemployment rates have been 7% on average.

Fig. 8. Labor participation rates, 1997 - 2018

III. Institutions, labor market and social protection.

Widespread labor precariousness and lack of social protection lead to low

average productivity of the national workforce.
Labor precariousness is also one of the main causes for the reproduction of
economic poverty.

Fig. 9. Rates of employment, child labor and social security, 1997 - 2018
III. Institutions, labor market and social protection.

Although Paraguay is not the country with less social welfare expenditures, the
proportion of the GNP in social investment is very low.

Fig. 10. Social spending and Human Development Index in Paraguay and Latin America, 2015.
IV. Social fragmentation and spatial segregation in schooling

Low investment in social welfare leads to a lack of support to lower social

classes, who tend to have low schooling rates and low performances

Fig. 11. Schooling by social classes, 1997 – 2015.

IV. Social fragmentation and spatial segregation in schooling

Social fragmentation: social classes seldom share meeting places. Schools

reflect this spatial segregation.
Map 2. Distribution of elementary schools in Asunción and metropolitan area, 2014.
IV. Social fragmentation and territorial segregation.

Economical and social causes of school drop-outs can be verified in the territory,
as fewer students reach middle school and high school levels.

Map 3. Distribution of middle schools in Asunción and metropolitan area, 2014.

IV. Social fragmentation and spatial segregation in schooling

Only a few percentage of students reach the high school level in the country.

Map 4. Distribution of high school in Asunción and metropolitan area, 2014.

V. Conclusion: Progress and limits of the democratization process.

- The social structure during the democratic period is not oriented towards
greater equity, but rather inequality has persisted and has accentuated in
some sectors.

- Status quo: disadvantaged social sectors remain in a situation of poverty and

vulnerability, which speak of a weakness of democracy.

- Democracy did not bring about equality: the Paraguayan fiscal system
continues to be regressive, social policies are weak and often "anti-poor”.
There are "rent seeking" behaviors in the State and in its public policies.

- Even though the dictatorial regime ended in 1989, many practices and
characteristics of that era have remained during the three decades since
democratization.