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Paraguay Defense Spending
According to the latest available government figures, the
defense budget for 1985 was 13.9 billion guaraníes (for the value
of the
guaraní--see Glossary). That figure represented
approximately 10.1 percent of the total expenditures of the central
government, down from the 13- to 14-percent levels sustained in the
early 1970s. When measured in current guaraníes, military spending
increased more than fivefold during the 1972-82 period. The most
rapid growth occurred in the 1979-81 period, when revenues from the
Itaipú project were at their highest
(see Fiscal Policy
, ch. 3).
When factoring in inflation during the ten-year period, growth was
a more modest, but still respectable, 80 percent. The sharp dropoff
in revenues from Itaipú was reflected in defense expenditures after
1982; when measured in current guaraníes, military spending fell by
10 percent in 1983, thereafter rising relatively sharply. These
increases were insufficient to match high levels of inflation
during the period, however. When measured in constant 1980
guaraníes, defense spending fell almost 30 percent during the 1982-
85 period.
When compared with other Latin American countries, the portion
of the national budget devoted to defense was about average. The
military's percentage of the gross national product
(
GNP--see Glossary)
was about 1 percent in 1985, a low percentage for Latin
American nations. The level of military expenditures per soldier
was among the lowest in the hemisphere.
A breakdown of the defense budget was not publicly available in
late 1988, but the army, as the largest service, was known to
account for the biggest portion. A large part of army spending went
to fund civic-action projects. It must therefore be assumed that
the purely military operations of the army, as well as those of the
navy and air force, were affected adversely by budget constraints
during the mid-1980s. Any modernization of the military's
relatively obsolete inventory would require a significant increase
in defense spending.
The domestic defense industry was very limited in scope, and the
nation imported almost all of its military equipment. The
Directorate of Military Industries, an agency subordinate to the
Ministry of National Defense, maintained a complex in Asunción that
produced explosives and repaired and maintained military vehicles.
Under the auspices of the army quartermaster, such items as field
kitchens and uniforms were manufactured locally. The navy also
maintained repair workshops and a naval shipyard.
The army, which had owned large tracts of land since the 1800s,
ran a number of ranches and farms. The produce from these
operations helped to supply the military's food requirements. In
conjunction with these operations, the army also operated a
slaughterhouse and a meat-packing concern.
Data as of December 1988
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