Relations between Germany and Paraguay are friendly and the people of Paraguay have a very positive image of Germany. Many Paraguayans whose families emigrated from Germany generations ago are aware of their German roots. This generates a steady flow of immigrants and as a result there are currently some 26,000 Germans living in Paraguay. Due to its development policy engagement and the cultural role it plays in Paraguay, Germany is seen as a valued partner.
When the dictatorship ended, Germany stood by the country on its road to democracy. Investigations into the human rights violations committed during the dictatorship and the implementation of judicial reform, partly based on the German model, played a role here.
Paraguay belongs to the MERCOSUR free trade area. As a result, Paraguay’s relations with the European Union have intensified in recent years. Among the EU member states, Spain and Germany are particularly important partners. Bilateral trade with Germany totalled 220 million euro in 2019. Germany’s main exports are cars, car parts, machinery and chemical products, while imports are dominated by food and raw materials. The large‑scale deliveries undertaken by branches of German industry in Brazil play a major role.
Paraguay has been experiencing an economic upturn since 2003 and managed to almost halve poverty in this period. Nevertheless, Paraguay remains one of the poorest countries in South America and has marked socio-economic inequalities. The positive economic trend was stalled by COVID 19, yet economic growth of 4% is forecast for 2021.
In the next few years, German bilateral development cooperation with Paraguay will draw to a close as Germany focuses its assistance more sharply. This will mean more importance will attach to Germany’s engagement in EU development cooperation, as well as in triangular cooperation, regional projects and the secondment of integrated experts.
In Asunción, there is a German-Paraguayan cultural institute (Instituto Culutral Paraguayo-Alemán (Goethe-Zentrum)) that makes a major contribution to the capital’s cultural scene offering many different language courses and a wide range of cultural events. Cultural preservation projects supported by Federal Government funding likewise play an important role.