Especially after the end of the dictatorship, Germany assisted Paraguay on the road to democracy, both with its investigations into the human rights violations committed during the dictatorship and with juridical reforms, which were partly based on the German model. Germany has a particularly positive image in Paraguay. The many German immigrants (around 25,000 persons as of 2018) continue to contribute to the country’s development, while the German Government’s engagement there in terms of development cooperation and cultural policy is appreciated.
Paraguay’s relations with the European Union, especially through its membership of the Mercosur free trade zone, have steadily intensified during the last few years. Among the European Union member states, Spain and Germany are particularly important partners. Bilateral trade between Germany and Paraguay totals approximately 270 million euros annually. Germany’s main exports to Paraguay are vehicle parts, machinery and chemical products (approx. 171 million euros), while its main imports from Paraguay are raw materials, especially oil seeds and oleaginous fruits (approx. 99 million euros). German penetration of the Paraguayan market is much larger if the goods supplied by German subsidiaries in Brazil, Argentina and the United States to Paraguay are also taken into account.
Paraguay is one of the poorest countries in South America and has marked socio-economic inequalities. Even though it has been possible to almost halve the number of people living in poverty since 2003, further progress has been very slow during the last few years and the poverty rate is between 20 and 25 percent (of which approximately 5 percent are suffering from extreme poverty). The main focuses of Germany’s development cooperation with Paraguay are rural development and the sustainable management of resources. These are complemented by measures in the field of vocational training. There is an increasing number of triangular projects with other countries in the region aimed at fostering Paraguay.
Through its wide range of language courses and cultural events, the Instituto Cultural Paraguayo-Alemán – Goethe-Zentrum in Asunción makes an acknowledged contribution to cultural life in the capital. In recent years, the German Government has increased its funding for cultural preservation projects in Paraguay.