m centered in the white band; unusual flag in that the emblem
is different on each side; the obverse (hoist side at the left) bears
the national coat of arms (a yellow five-pointed star within a green
wreath capped by the words REPUBLICA DEL PARAGUAY, all within two
circles); the reverse (hoist side at the right) bears the seal of the
treasury (a yellow lion below a red Cap of Liberty and the words Paz y
Justicia (Peace and Justice) capped by the words REPUBLICA DEL
PARAGUAY, all within two circles)

@Paraguay:Economy

Overview: Agriculture, including forestry, accounts for about 25% of
GDP, employs about 45% of the labor force, and provides the bulk of
exports, in which soybeans and cotton are the most important. Paraguay
lacks substantial mineral or petroleum resources but possesses a large
hydropower potential. In a major step to increase its economic
activity in the region, Paraguay in March 1991 joined the Southern
Cone Common Market (MERCOSUR), which includes Brazil, Argentina, and
Uruguay. In 1992, the government, through an unorthodox approach,
reduced external debt with both commercial and official creditors by
purchasing a sizable amount of the delinquent commercial debt in the
secondary market at a substantial discount. The government had paid
100% of remaining official debt arrears to the US, Germany, France,
and Spain. All commercial debt arrears have been rescheduled. For the
long run, the government must press forward with general,
market-oriented economic reforms. Growth of 3.5% in 1993 was spurred
by higher-than-expected agricultural output and rising international
commodity prices. Inflation picked up steam in fourth quarter 1993
because of rises in public sector salaries and utility rates. GDP
growth continued in 1994 at 3.5%. Although inflation declined a bit
over 1993, increases in food prices, and crop and infrastructure
damage from heavy rains at the end of the year, forced inflation to
18%, above the government's target of 15%. Paraguay reaffirmed its
commitment to MERCOSUR on 1 January 1995 by implementing the
organization's common external tariff.

National product: GDP - purchasing power parity - $15.4 billion (1994
est.)

National product real growth rate: 3.5% (1994 est.)

National product per capita: $2,950 (1994 est.)

Inflation rate (consumer prices): 18% (1994 est.)

Unemployment rate: 11.2% (1994 est.)

Budget:
revenues: $1.2 billion
e