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USAID/Paraguay 

Operational Plan 

FY 2006 

June 15, 2006 
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Please Note: 

The attached RESULTS INFORMATION is from the FY 2006 Operational Plan and was assembled 

and analyzed by the country or USAID operating unit identified on the cover page. 

The Operational Plan is a "pre-decisional" USAID document and does not reflect results stemming 

from formal USAID review(s) of this document. 

Related document information can be obtained from: 

USAID Development Experience Clearinghouse 

8403 Colesville Road, Suite 210 

Silver Spring, MD 20910 

Telephone: (301) 562-0641 

Fax: (301) 588-7787 

Email: docorder@dec.cdie.org 

Internet: http://www.dec.org 

Portions released on or after July 1, 2006 
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Program Performance Summary FY 2005: Background: The past 16 years since the fall of the 

Stroessner dictatorship have seen the adoption of a new constitution, the establishment of freedom of 

expression, the development of a transparent and free electoral process, some improvements of the 

judicial system, including a transition to a judicial adversarial system allowing increased public scrutiny of 

legal cases, and the defense of democratic institutions in the face of severe challenges. These 

challenges include several coup attempts, the assassination of a Vice President, the resignation of a 

President and a replacement whose administration lacked direction, authority and credibility. Upon 

assuming the presidency in August, 2003, President Duarte aggressively launched an anti-corruption 

campaign and constructed a broad political consensus for macro economic reforms that rescued the 

country from the brink of economic crisis and propelled his popularity to stratospheric levels. During the 

second year of his Administration, growing resistance to his reforms and only modest economic recovery 

and job creation has produced the inevitable decline in his ratings as people’s inflated expectations could 

not be met. 

The Duarte Administration produced an impressive list of accomplishments in its first two years in office. 

It displayed courage and prudence in restoring discipline to macro economic policy that averted a major 

default on international and domestic debt obligations, transformed alarming budget deficits into a small 

surplus, and kept inflation manageable at 12.3% in 2005. While un- and under-employment remain high 

(7.3% and 24.2% respectively) poverty rates have declined to 39.2% after peaking at nearly 50% of the 

population two years ago. Finally, prudent macroeconomic policies have helped Paraguay grow at 

approximately 2.7% in 2005, representing a mere 0.4% in real per capita terms-far too little to afford 

perceptible relief to the large body of poor and under-employed people looking for relief. 

Initiatives by the Duarte Administration to improve governance and fight corruption have produced 

significant results. According to the Ministry of Finance, anti-corruption measures dramatically increased 

tax revenues by 44% during the first year and custom collections by an additional 18.7% through May of 

the second year, compared to collections the previous year. Public procurement reforms have increased 

transparency and competition and resulted in a 40% savings in government contract costs. Six Supreme 

Court magistrates, discredited for corrupt and unethical behavior were replaced utilizing a process to 

select new magistrates that afforded citizens an opportunity to scrutinize candidates’ professional and 

ethical qualifications. The courts have sentenced or sustained challenges to convictions in high profile 

cases involving the president and seven member board of directors of the National Development Bank, 

the Director of the Central Bank and the Superintendent of Banks, giving hope that the rich and powerful 

are not always above the law. 

This and numerous other measures that demonstrated resolve and results in addressing corruption and 

pursuing responsible economic policies resulted in the Millennium Challenge Corporation (MCC) 

designating Paraguay eligible to apply for the Threshold Country Program. Areas in which Paraguay 

scored particularly low on Millennium Challenge Account (MCA) indicators include control of corruption, 

rule of law and governing effectively. Paraguay submitted a successful concept paper to MCC in late 

February 2005 followed by a Threshold Country Plan (TCP) in October 2005 which responds to these 

weaknesses. USAID’s current program also addresses important aspects of each of these important 

indicator areas. 

U.S. Interests and Goals: The primary U.S. goal in Paraguay is to develop a robust democracy, 

underpinned by economic performance that maintains people’s faith in the system. President Duarte’s 

unquestioned electoral legitimacy and reform agenda make prospects for progress on good governance 

better now than ever before. However, although worthy of our support, serious constraints in the capacity 

of the Central Government make this a challenging goal. Among these constraints are weak skill levels of 

government managers, duplicative or nonexistent policies, patronage, clientelism corruption, growing 

resistance by the vested interests that benefit from the status quo and a business environment 

incompatible with the competitiveness requirements of the global economy. Combating terrorism, 

reducing transnational crime, fighting corruption and strengthening the rule of law, and building a growing, 

diversified economy that strengthens economic well-being and democracy are important U.S. foreign 

policy goals. 
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USAID’s strategy is to strengthen decentralized power and authority in order to improve government 

accountability to citizens and to develop civil society and private sector grassroots level efforts as the 

basis for democratic governance, economic growth, improved trade capacity, improved health, and 

protection of ecologically sensitive areas. Complementary to this effort, USAID also works with the 

national government to reform policies, strengthen institutions and encourage a working partnership with 

civil society, the private sector and local government. Much of the activity the Mission supports in all four 

SO’s have a positive effect on fighting corruption and promoting decentralization. 

In accordance with Agency policy, it is in the U.S.’s interests to help Paraguay strengthen its development 

policies and performance defined by MCA principles. USAID‘s strategy is well positioned to support 

numerous reforms that are central to the Government of Paraguay’s (GOP’s) agenda and MCA principles. 

Thus, the lessons, expertise and effective partnerships of the bilateral program have proven invaluable as 

USAID has assisted the GOP to design its Millennium Challenge Account Threshold Country Plan. 

The beneficiaries of the USAID program are the people of Paraguay who receive improved basic 

services, increased employment opportunities, and who enjoy expanded opportunities to have their 

voices heard and their rights to transparent and accountable governance recognized. 

Donor Relations: USAID is the third largest bilateral donor in Paraguay (after Taiwan and Japan) but its 

unique contribution is in having other donors build upon its pioneering activities, in strengthening civil 

society and local government, pioneering innovative health service delivery models, addressing 

deforestation, and generating replicable models of judicial reform and decentralization. The World Bank 

(WB), Germany and Japan now have programs to strengthen local NGOs and work through NGOs to 

develop programs with local communities and adolescents. The United Nations Development Program 

(UNDP), the Inter-American Development Bank (IDB), and Germany (GTZ) are continuing to collaborate 

with USAID on judicial reforms and decentralization activities initiated by USAID. The World Bank (WB) 

has developed a new health sector loan focused on provision of health and is working with USAID to 

incorporate the lessons from USAID about decentralization. 

At a local level, USAID partners consistently coordinate with programs supported by other donors such as 

current collaboration between CEPEP (a local health NGO) and the UNFPA. Under support that USAID 

provides to local government strengthening through a GDA, USAID and it’s partner are currently 

coordinating with a Canadian Development agency grant to provide sewerage in a suburb of Asuncion, 

with the Swedish Development agency to decentralize planning and resources in the education sector, 

and with the IDB on sanitation landfills and bio-diesel initiatives in the capital and other municipalities. 

Finally USAID partners coordinate with IDB support to promote competitiveness in the private sector, in 

conjunction with USAID’s economic growth SO. 

The Global Environmental Facility (GEF) continues to work in protected areas and eco-regions where 

USAID initiated environmental activities. USAID currently selects areas in which to focus, in close 

cooperation with the GEF program, including areas which pertain to the Atlantic Forest. USAID is 

providing critical technical assistance to lead and implement, with UNDP input, a debt swap under the 

Tropical Forest Conservation Act (TFCA) that would invest financial resources for site conservation and 

for activities which protect biodiversity in the Upper Parana Atlantic Forest’s southern corridor. USAID 

also coordinates with the IDB to assure that the IDB-supported establishment of a national environmental 

fund coincides with the parameters under which the TFCA debt swap will be established. Also in the 

environmental sector USAID is coordinating with the Spanish Cooperation Agency to determine activities 

it will be carrying out. USAID continues to lead in health decentralization, and reproductive health 

activities, closely coordinated with the World Bank, the IDB, the Pan-American Health Organization 

(PAHO), the United Nations Fund for Population Activities (UNFPA), the United Nations Children's Fund 

(UNICEF), and Japan. 

Challenges: The state of Paraguay’s democratic institutions, civil society, and political parties indicates 

that substantial time and effort are still required to complete the transition to a fully functioning democracy 

and market economy. The GOP is committed to addressing the challenges related to economic 

reactivation, poverty and corruption. To accomplish this, reform and modernization of all branches of the 
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government are necessary. They suffer from corruption and patronage, which have caused enormous 

inefficiencies in public service delivery and undermine citizens’ confidence in their government 

institutions. Generally, popularly elected local governments are inexperienced and lack adequate 

financial and human resources, although they are perceived to be relatively more honest and competent. 

The business environment discourages private sector investment, both domestic and international. Unfair 

and illegal business practices such as smuggling and bribery make it difficult for legal activity to compete. 

Unclear, complicated and costly export requirements make it difficult to invest in export production. The 

World Bank’s Doing Business Report, 2005 found that in Paraguay it takes, on average, 74 days to start a 

business. This is one of the highest in the world. Paraguay’s external debt is almost 40% of Gross 

Domestic Product and while budget deficits were controlled and turned into a surplus during the first two 

years of Duarte’s term, the problems Paraguay still has results in high risk ratings and expensive credit for 

private sector initiatives and makes it difficult for Paraguay to compete internationally. 

Paraguay’s deforestation rate is the highest in Latin America (over one million hectares were lost between 

1999 and 2001) due to the state’s complete failure to enforce environmental regulations and laws, thus 

giving rise to indiscriminate exploitation of land, water, and wildlife resources. Sustainable development 

has been severely threatened by depletion of Paraguay’s natural resources, timber reserves are nearly 

completely exhausted, much of the rich topsoil of the eastern region is severely eroded, and the Guarani 

aquifer, the largest on the continent, has decreased its water flow considerably in the last 20 years. In 

spite of this, public authorities have been slow to respond to these challenges because of inadequate 

capacity. Despite having signed and ratified almost all international agreements and treaties related to 

environmental protection, the country still lacks effective enforcement capability and a coherent national 

environment policy. 

High poverty levels contribute to mortality rates and better reproductive health services are needed. 

Almost 40 percent of pregnant women do not receive adequate pre-natal care. The Ministry of Health 

(MOH) does not have the capacity to deal efficiently with these and other problems such as the supply of 

contraceptives, basic supplies, and medicines and additional outreach to adolescents on reproductive 

health and family planning issues. Many citizens also lack access to other basic services such as 

education, potable water, sewerage systems, solid waste collection and basic infrastructure. Although 

national and local governments are hard pressed to adequately provide these basic services, there has 

been some improvement and some local governments are struggling to compensate for deficiencies in 

services provided by the national government. 

FY 2006 will be a very political year and may adversely affect some of the Mission’s programs. Internal 

Colorado Party elections will be held early in the year and the results could have a profound impact on 

the Administration’s ability to continue to advance its reform agenda. Municipal primaries and elections 

will be held in early FY 2007, and although they will negatively impact the local government program, the 

elections may provide an opportunity to gain valuable experience working with political parties. 

To overcome these challenges USAID is working directly with the host country through various grants and 

contracts to develop a more effective and accountable local government, encourage an active civil society 

and expand national reforms. It also is strengthening the capacity of environmental NGO’s and improving 

the policy, legal, and financial tools for improving eco-regional management. In the health sector USAID 

is improving decentralized community based health care and expanding access to quality reproductive 

health services. In the economic sector it is implementing business development strategies and improving 

the business environment for businesses to advance our goals of creating jobs for the poor and export 

opportunities for the economy. 

_Key Achievements: 

Democracy. During the year, USAID/Paraguay supported measures which improved transparency and 

accountability in justice sector institutions with the aim of fighting corruption. A Judicial Code of Ethics 

was developed, approved and launched by the Supreme Court. The Council of Magistrates enacted 

regulations establishing selection criteria for judicial sector positions, including judges, prosecutors and 
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public defenders. In addition, the Council established procedures for exams and approved regulations for 

the implementation of an electronic registry of candidates. The capacity of the Public Ministry was 

strengthened to fight corruption through support provided to the Economics Crimes Unit to increase its 

prosecutorial capacity regarding corruption cases. A new Anti-Corruption Unit at the Public Ministry was 

established that will be responsible for investigating and prosecuting selected economic crimes that 

require specific expertise. The Controller’s Office established a support unit that will serve as a liaison 

between auditors and prosecutors, and that will provide assistance to prosecutors regarding corruption 

investigations. This eventually will have a significant impact on indictments and successful prosecution of 

corrupt officials and private individuals. 

A whistle blower program was initiated in the Procurement Office of the Ministry of Finance aimed at 

increasing transparency of public procurement. Two other whistle blower programs were agreed upon by 

the Supreme Court and the second largest city in the country. In general USAID support for anticorruption activities with civil society has helped open the political space for USAID partners to discuss 

issues in other sectors such as the environment where a local environmental partner promoted public 

access to information legislation on matters related to the environment, which was then used as a model 

for drafting public access to information legislation in general. 

USAID support to local government and decentralization increased credibility of municipalities as the first 

and most critical tier of government in a democratic society. With USAID support local governments have 

been strengthened to respond to citizen needs by providing improved public services, such as potable 

water, garbage collection, street improvements and maintenance, health clinics, schools, etc., financed 

with enhanced revenue collection and increased expenditure effectiveness. Since 2002, 54 municipalities 

have increased property and commercial tax collection on average by 111% per municipality, resulting in 

an additional $6 million in revenue, more than 300 new or improved local services and over 170 

transparency and participatory governance mechanisms, such as public budget hearings, citizen 

committees for monitoring public works, access to information policies, and education and development 

councils. These newly created mechanisms, the strengthened capacity developed, and a new GDA 

under this program, resulted in greater ability of citizens and the local government to discuss and address 

issues related to economic development, environment and health. 

Civil society improved its capacity to monitor and press for transparency, accountability and reduced 

corruption in government functions. Several examples include: the presentation of a Freedom of 

Information Act to the Congress by more the 20 civil society organizations and its passage in House of 

Deputies, a National Network of Citizen Watchdog Groups successfully promoted the removal of an 

allegedly incompetent and corrupt mayor in a small town, the recovery of a public park that had been 

inappropriately transferred from a municipality to a private developer, and the removal of a dean who had 

fired a university professor without grounds. 

Environment. During the past year, the broad goals of the Biological Vision for the Upper Parana Atlantic 

Forest (UPAF) (developed with USAID support) have been advanced with the launching of an innovative 

Social Pact that employs the principle of tradable rights to foment reforestation and compliance with land 

use regulations. This was achieved by promoting dialogue between different sectors including a recently 

formed network of landowners and NGO’s to discuss management of protected areas. As a result of the 

Social Pact and Biological Vision, over 3,000 hectares have been purchased for additional conservation 

under the San Rafael strategy, which protects areas in and around the San Rafael Reserve-the highest 

conservation priority in the UPAF. In the Chaco, a Biosphere Reserve of over 7 million hectares was 

established by the GOP and formally recognized by UNESCO. 

The performance of national institutions in enforcing environmental regulations improved markedly. 

Environmental attorneys improved their capacity to investigate cases where environmental regulations 

were violated and procedural guidelines were elaborated to assist in interventions of illegal activity 

negatively affecting the environment. Also, training was provided to inspectors at the environmental 

ministry to enforce environmental laws which resulted in greater understanding and enforcement of 

policies and regulations, as well as compliance with international conventions related to the environment. 

Departmental and municipal governments have begun to take a greater role in conservation efforts. This 
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was achieved with the help of technical assistance to municipalities to improve their cadastre and training 

of municipal staff regarding environmental functions. Coordination amongst and between municipal and 

departmental governments has improved resulting in coordinated awareness raising programs, training 

for local level officials, promoting land zoning and implementation of a biosphere reserve. USAID support 

to one municipality with serious illegal land invasions and related environmental problems, resulted in a 

cadastre which is assisting the municipality to determine actions to resolve land use and environmental 

issues. USAID’s partner, IDEA, advises Congressional environmental committees on environmental legal, 

policy and technical matters. This has led to IDEA’s critical role in policy matters such as the 

development of the draft Water Law and the draft General Environmental Law. 

Coordination between the environmental program and support to municipalities through the mission’s 

decentralization activities led to discussions where support to municipalities included those municipalities 

which had sensitive ecological areas within its boundaries. Strengthening the general capacity of 

municipalities resulted in greater transparency and a framework which was created which allows for 

citizen discussion of local environmental issues and the need to address these. 

Negotiations between the GOP, US Department of Treasury, and American NGOs for a debt-for-nature 

swap under the Tropical Forest Conservation Act (TFCA) began during the period. USAID and its local 

environmental partners have provided input and have helped to facilitate the process of negotiations. 

Global Climate Change (GCC) was mitigated through the protection of various sections of the UPAF 

through presidential decrees and purchasing of land. Over 132,000 hectares are under improved 

management for biodiversity. Departmental and municipal governments have begun to take cognizance 

of the role they can play in conservation efforts. Coordination amongst and between municipal and 

departmental governments has improved resulting in coordinated awareness raising programs, improved 

capacity of local level officials, promoting land zoning and implementation of a biosphere reserve. 

Reproductive Health. In FY 2005, the community pharmacy program was successfully extended into 

three new departments and now includes a total of over 160 pharmacies with USAID assistance. 

Alternatives to health coverage, such as low-cost health insurance, began implementation in one new 

municipality during the year to help finance basic health care costs. The system in one of the 

municipalities now covers 70% of the population. The results of this effort are being replicated in other 

municipalities in the same region. 

Despite significant progress over the past years, Paraguay continues to face serious reproductive health 

problems, with high rates of maternal and infant mortality, and continues to experience chronic childhood 

malnutrition. Although the fertility rate has gone down according with the latest RHS, (2.9 births per 

woman) within rural areas (3.9), guarani-speaking populations (5.4) and less educated women (4.2.) 

higher rates still persist confirming the unequal access to health services and supplies. There is still a 

significant percentage of women of reproductive age that have unmeet needs for family planning (14.7%) 

and this percentage is even higher in poorest quintiles (18.9%). 

During FY 2005, USAID/Paraguay continued to implement its strategy to increase use of voluntary 

reproductive health services by improving individual, family, and community reproductive health practices 

with a focus on maternal health, by strengthening the quality of reproductive health service delivery in the 

public and non-profit sectors, and by reinforcing local authorities’ capacities to manage and provide basic 

health care. Difficulties were experienced during this year with the contractor implementing this activity 

and the Mission is working with the Regional Contracting Officer to modify this contract in order to more 

properly allocate funding planned for this contract into other activities, addressing items noted in the 

recent audit performed by RIG. 

The Paraguayan Government has shown a strong commitment to the USAID program. Reproductive 

health, and especially family planning, is one of the highest priorities identified by Ministry of Health 

(MOH) officials. This commitment has helped USAID to exceed performance targets, in the case of its 

decentralization efforts. The MOH’s is still showing a significant interest in expanding the models which 

have been developed and taking lessons learned to design national level programs. An opportunity 
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exists under the current administration to make significant progress in reforming the MOH’s health service 

delivery system. 

New authorities in the national social security system have also demonstrated their willingness to work 

with international agencies, coordinating efforts and exchanging experiences to better serve 

Paraguayans. The donor’s round table (including World Bank and IDB) is for the first time working closely 

with the MOH and other health sector institutions to define health sector reform activities and priorities in 

order to better support the government efforts. Donors are also working together in defining assistance to 

be provided to the Paraguayan government with regard to the Avian Flu preparedness and response. 

In terms of program management, the SO was designed to have a much broader impact, but the Mission 

has received less than half of the planned funding levels for the SO. Consequently, the magnitude of 

activities was scaled back to focus on certain geographic areas. The family planning program was 

targeted for imminent graduation during this year and a team from Washington visited Paraguay in June 

to work with the Mission in developing a phase-out plan for the up coming years. This phase out plan 

was submitted to Washington for approval in October and will be incorporated in to the new Country 

Strategy Statement to be presented to Washington during FY 2006. 

Based on Washington decision’s to graduate the Family Planning program, the Mission has allocated 

funding to start a project on contraceptive security. During the year, it started providing assistance to the 

Ministry of Health and the Social Security Institute so that these can respond to contraceptive demand. 

USAID and its partner are working closely with UNFPA, the Pharmaceutical Association, and NGOs 

providing contraceptives, focusing its efforts on establishing a commitment from the MOH and other 

public institutions like the Paraguayan Congress and the Minister of Finance in order to work towards 

graduation from donations. 

With regard to gender issues, the Reproductive Health SO has used a participatory methodology 

throughout the program, in its management, in service delivery, and in specific services. The experience 

of working with local authorities and communities has also provided an opportunity to empower women in 

the community that could translate into greater involvement in other aspects of local government. 

Through the outreach, training and education components of the program, selected communities seek 

methods and messages to address gender issues. Gender roles and power in provider/patient 

relationships and cultural variations of gender roles highlight the importance of gender awareness and 

analysis in the design and production of written materials and activities. 

A high level of community participation is occurring through local health councils in order to improve 

preventive health measures and promote reproductive health. The number of communities offering basic 

health services increased by two during FY 2005 to a total of 15. The system includes trained promoters 

that raise awareness on services and maternal care, undertake surveys to increase knowledge of the 

local health situation, and help identify health services for children and women. USAID/Paraguay 

continued to support CEPEP, a local NGO that operates a system of clinics to provide family planning 

and other reproductive health services at affordable prices. 

During the year, USAID provided technical assistance to local governments and local health councils on 

the legal framework for health decentralization that resulted in a modification of the Law 1032 which 

allows for local governments to retain control of some financial resources which are raised at the local 

level. This has resulted in increased authority of municipalities through the 31 agreements which were 

implemented between the MOH, local health councils and local governments to decentralize some health 

functions and authorities. USAID provided support in 12 of these to implement these agreements. This 

activity builds upon successful local government strengthening activities and promotion of 

decentralization under the democracy program. 

The final results of the Reproductive Health Survey are now widely available. The survey serves as a 

snapshot of the maternal and reproductive health situation in the country, and also serves as the baseline 

information of the National Reproductive Health Plan. One of the most impressive results of the survey is 

the Total Fertility rate, which went down from 4.3 children per woman (1995 to 1998) to 2.9 children per 
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woman (2001 to 2004). However, TFR figure masks important differences between rural and urban 

regions and between women with different levels of education. The TFR of urban and rural women 

measured from 2001 to 2004 was 2.5 and 3.7, respectively, compared to 3.2 and 5.6 from 1995 to 1998. 

For the period 2001 to 2004, the TFR for women with less than six years of education was 4.2 children 

per woman compared to 2.1 for women with 12 or more years of education. From 1995 to 1998 the TFR 

for the same level of education was 6.0 and 2.3, respectively. 

Trade. The program far surpassed its main target of generated employment. It created over 1,200,000 

person days of employment. Sales and exports far exceeded targets for the first year. Investments didn’t 

meet the target for 2004 but did meet the targets for the cumulative first two-years of the program (2004 

and 2005) and so is still on track. The program is also having an impact beyond that of its individual 

clients by addressing sector and regional policies as those related to the informal economy around the triborder region of Ciudad del Este. The program played a major role in helping the government define 

policies which encourage formal economic activities as opposed to operating in the informal economy. By 

the end of this SO we expect to have significantly strengthened the capacity of Paraguayan firms to 

participate in international markets as suppliers, clients and competitors and thus have fostered marketled growth and employment generation in Paraguay 

Global Development Alliance (GDA). USAID is providing support to a cooperative agreement to a local 

NGO to support a broad alliance of private and public partners that is implementing a good governance 

and anti-corruption program at the local level. Under this alliance, a bio-diesel project benefiting 500 

families obtained $1.2 million in non-USAID funding, a 15 year solid residuals recycling project and a 

sewerage project were initiated, and an environmental decentralization project was approved. These 

projects leveraged over 2,000,000 in non-USAID funding. Finally, a separate Mission GDA encourages 

local and international NGOs to work with the private sector and government to protect over 12,000 

hectares in and around a reserve which forms a critical biological corridor between other protected areas 

in the Upper Parana Atlantic Forest. 

Gender. A gender assessment was finalized during the year and found that although many of the 

programs being implemented incorporate gender considerations into its activities, greater emphasis 

should be placed on assuring that all activities do so. By the end of the FY, all of the mission programs 

were addressing gender concerns in their delivery mechanisms. There was also general consensus on 

how the upcoming strategy could incorporate gender concerns. In general, women are by far the majority 

of beneficiaries of the health portfolio activities and of basic community services as a result of enhanced 

participation opportunities in civil society and with local government on local issues. 
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FY 2006 Program 

SO: 526-004 Key Democratic Governance Practices Instituted 

Promote And Support Anti-Corruption Reforms 

Promote And Support Anti-Corruption Reforms ($350,000 ESF). USAID is providing technical assistance 

and training to strengthen the capacity of the business and civil society to fight corruption and promote 

reforms. Activities are supporting oversight, access to information, transparency and accountability, and 

promote reforms focusing on anticorruption policies. Prime implementers: Management Systems 

International (MSI) and the Institute for Penal and Social Science Comparative Studies (INECIP). 

Strengthen Civil Society 

Strengthen Civil Society ($1,130,000 ESF). USAID is extending a successful sub grant program that 

strengthens civil society organizations in promoting citizen participation in the policy decision making 

process, citizen oversight and control, and advocacy. Prime implementer: Center for Information and 

Resources for Development. 

Strengthen Democratic Political Parties 

Strengthen Democratic Political Parties ($500,000 ESF). USAID is providing technical assistance and 

training to political parties to promote public sector accountability and good governance practices to 

challenge the existing patronage system. Emphasis is placed on building political party capacity so that 

based on merit, technically qualified people have access to increasingly higher party positions, 

government positions or elected offices. Technical assistance is also being provided for political party 

finance reform. Prime implementer: Alter Vida. 

Strengthen the Justice Sector 

Strengthen the Justice Sector ($1,000,000 DA). Technical assistance is being provided to improve 

control functions of government institutions, including strengthening the capacity of the Prosecutor’s 

Office to fight corruption. Assistance is being provided to address problems caused by the patronage 

system in the justice sector, including improving the accountability of judges and prosecutors. In addition, 

this supports a career system focused on judicial employees that will address recruitment policies, 

procedures and practices based on merit. Prime implementers: MSI and INECIP. 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization ($980,000 DA). USAID is providing technical 

assistance and training to strengthen the capacity of newly elected mayors and council members by 

helping them implement good governance practices, including service provision, revenue enhancement, 

citizen participation, transparency mechanisms, and performance measurement. Technical assistance is 

being provided to local governments and their associations to implement decentralization projects in 

coordination with the central government. Prime implementer: Alter Vida. 

FY 2007 Program 

SO: 526-004 Key Democratic Governance Practices Instituted 

Promote And Support Anti-Corruption Reforms 

No obligations are planned during FY 2007. 
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FY 2006 Program 

SO: 526-005 Management of Globally Important Ecoregions Improved 

Improve Sustainable Management Of Natural Resources & Biodiversity 

Improve Sustainable Management Of Natural Resources & Biodiversity ($920,000 DA). USAID is 

providing technical assistance to NGOs and local governments to increase their capacity to develop 

legislation to promote financial and structural incentives (such as a national environmental fund and 

carbon offset projects) for ecological management and forest conservation in three globally significant 

eco-regions. Technical assistance is being provided to conserve public and private land by establishing 

resource management areas, conservation easements and leasing, land purchases and zoning, and 

protecting public parks. USAID is supporting decentralization efforts so that departments and municipal 

governments have a greater role in addressing environmental concerns in their communities. USAID is 

supporting NGOs and other local entities in the Chaco and Pantanal eco-regions in improving the 

capacity of municipal and departmental officials to incorporate environmental designs into local 

development plans. Incentives will also encourage actions that contribute to compliance with 

international environmental conventions and increase the capacity of local officials to enforce national 

environmental regulations. Technical assistance is provided to improve the capacity of national park 

personnel in the Chaco to implement conservation activities, establish biological corridors, and coordinate 

efforts with local institutions and institutions in Bolivia and Argentina. In the Upper Parana Atlantic Forest 

eco-region, funds are used to improve the capacity of five local NGOs to implement conservation efforts 

and promote the protection of approximately 100,000 hectares through activities that include the training 

of local and national government officials to enforce environmental regulations. USAID continues to 

encourage a debt swap between the Government of Paraguay, the U.S. Department of Treasury, and 

U.S. NGOs. A moratorium policy to protect against indiscriminate deforestation and a coordinated effort 

with institutions in Brazil and Argentina is also being supported. A Global Development Alliance activity 

continues to provide support to ensure sustainability of the Tapyta Reserve. USAID provides technical 

assistance to support conservation efforts in an ecologically sensitive area where few conservation efforts 

have been carried out. USAID promotes and offers technical assistance and training towards the creation 

of private protected areas, and improves the capacity of local government officials to enforce 

environmental regulations. USAID is also supporting the preparation of draft policy and legal tools to 

improve the current environmental framework. Principal contractor and grantees: World Wildlife 

Foundation, Institute of Law and Environmental Economics, Moises Bertoni Foundation and one other 

local contractor. 

FY 2007 Program 

SO: 526-005 Management of Globally Important Ecoregions Improved 

Improve Sustainable Management Of Natural Resources & Biodiversity 

No obligations are planned in FY 2007. 

FY 2006 Program 

SO: 526-006 Use of Voluntary Reproductive Health Services Increased 

Improve Maternal Health & Nutrition 

Improve Maternal Health & Nutrition ($1,102,000 CSH). USAID provides technical assistance to 

strengthen the central, regional and local Ministry of Health (MOH) in the implementation of norms and 

protocols for maternal mortality surveillance, including support to improve the current public health 

information system. Principal contractor and grantees: to be determined. 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization ($450,000 CSH). Local government control in 
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the provision of health services is being strengthened through technical assistance to regional and local 

authorities and through greater community participation in the design, evaluation and financing of health 

care. USAID's technical assistance continues to help the MOH identify ways it can decentralize 

authorities and functions including supporting the extension of the community pharmacy concept into new 

areas by increasing awareness and providing support to two departmental governments and local health 

councils. USAID is also strengthening the already successful grassroots insurance schemes in three 

municipalities and disseminating information about the success to other municipalities and departments 

as well as to the MOH and other donors. Tools developed under this initiative are being transferred to the 

central MOH in order to implement the experiences at new sites. Discussion is underway to determine if 

USAID assistance will be provided to help Paraguay address threats caused by the avian flu pandemic. 

Principal grantee: Center for Information and Development Resources. 

Support Family Planning 

Support Family Planning ($1,332,000 CSH). USAID continues to coordinate with the United Nations 

Fund for Population Activities in supporting the establishment of a sustainable mechanism for the 

purchase and distribution of contraceptives. USAID is strengthening the Government of Paraguay's 

contraceptive distribution system including its capacity for forecasting, financing, and procurement. 

USAID provides support for family planning services at low cost clinics located in economically depressed 

areas in the capital and other large cities. In coordination with other donors, USAID is updating and 

disseminating family planning norms in order to give users informed choices. Principal contractor and 

grantees: Paraguayan Center for Population Studies and John Snow, Inc. 

FY 2007 Program 

SO: 526-006 Use of Voluntary Reproductive Health Services Increased 

Improve Maternal Health & Nutrition 

No obligations are planned in FY 2007. 

FY 2006 Program 

SO: 526-007 Increased Incomes for the Poor in Selected Economic Regions 

Improve Private Sector Competitiveness 

Improve Private Sector Competitiveness ($1,485,000DA). USAID continues to provide business 

development services such as marketing assistance for agricultural products and supply chain 

management to help firms expand their sales and generate employment. Through technical assistance 

provided to companies in the poorest areas of the country, the program plans to generate over 

$5,400,000 in additional sales of Paraguayan products. It is anticipated that at least one third of these 

sales will be exports. The generation of this amount in sales is expected to lead to the creation of at least 

450,000 labor days of additional employment during the year and additional investment of $250,000. 

Principal contractor: Chemonics and various Paraguayan subcontractors. 

FY 2007 Program 

SO: 526-007 Increased Incomes for the Poor in Selected Economic Regions 

Increase Trade and Investment 

No obligations are planned in FY 2007. 

FY 2006 Program 

SO: 526-008 Corruption Reduced and Good Governance Improved in Key Sectors 

Promote And Support Anti-Corruption Reforms 
13

No obligations are planned in FY 2006 as the program will begin in FY 2007. 

FY 2007 Program 

SO: 526-008 Corruption Reduced and Good Governance Improved in Key Sectors 

Promote And Support Anti-Corruption Reforms 

Promote And Support Anti-Corruption Reforms ($1,000,000 ESF). USAID plans to provide technical 

assistance in promoting broad anticorruption efforts in such areas as, transparency and accountability in 

the justice sector, greater access to public information, civil society oversight, and tracking and monitoring 

of corruption cases. Prime implementer: to be determined. 

Strengthen Democratic Political Parties 

Strengthen Democratic Political Parties ($1,000,000 ESF). USAID intends to provide technical 

assistance and training to political parties to promote public sector accountability and good governance 

practices to challenge the existing patronage system. Emphasis may be on building political party 

capacity so that technically qualified people have access to increasingly higher party positions, 

government positions, or elected offices based on merit. Political party finance reform may also be 

supported. Prime implementer: to be determined. 

Strengthen the Justice Sector 

Strengthen Justice Sector ($830,000 DA). USAID plans to provide technical assistance to strengthen 

such institutions as the Supreme Court, Public Ministry, Controllers Office, and the Council of Magistrates 

in coordination with civil society to promote transparency, fight corruption, promote judicial independence, 

and strengthen the rule of law. Prime implementer: to be determined. 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization ($1,000,000 DA). USAID plans to expand the 

number of local governments implementing good governance practices by evaluating governance 

performance against independent, objectively verifiable municipal performance indicators specific to 

Paraguay. Indicator results may be used to determine where to provide technical assistance, to promote 

transfers and coordination by central government actors, and to promote specific local projects. In 

addition, a local database on municipalities’ performance will be developed to promote competition and 

provide citizens access to municipal performance information. Support may be provided to help expand 

local development and economic growth by working with the private sector, local entities, international 

donors, and other actors through the Global Development Alliance. Prime implementer: Alter Vida. 

FY 2006 Program 

SO: 526-009 Health Coverage for the Underserved Population Improved 

Improve Maternal Health & Nutrition 

No obligations are planned in FY 2006 as the program will begin in FY 2007. 

FY 2007 Program 

SO: 526-009 Health Coverage for the Underserved Population Improved 

Improve Maternal Health & Nutrition 
14

Improve Maternal Health & Nutrition ($1,000,000 CSH). USAID plans to strengthen selected essential 

public health functions of the Ministry of Health (MOH), focusing on maternal health and nutrition. 

Technical assistance may be provided to assure improved public health information for policy and 

decision making. This would benefit all stakeholders and reinforce ongoing health sector decentralization 

and logistics strengthening activities. This assistance will help the MOH assume its functions as a 

regulatory and enforcement arm of the Government of Paraguay by providing quality public health 

information for planning and evaluation purposes. Principal contractors and grantees: to be determined. 

Support Democratic Local Government & Decentralization 

Support Democratic Local Government & Decentralization ($250,000 CSH). USAID plans to continue to 

strengthen local government and community control in the provision of health services with a focus on 

family planning; disseminate financial models of providing health services; and develop community 

models for information, education, and a communication strategy that will help increase access to family 

planning and prevent unwanted pregnancies in those areas. Technical assistance will be used to 

improve the structure of the health services network so those in need of health services where (e.g. 

hospital, health center, health post) they will receive the services required. Support will continue to be 

provided to the MOH to promote policy issues related to health reform including reforms aimed at further 

decentralization of the health system and to design and implement activities that complement the 

Maternal and Child Health Insurance system, financed by a World Bank loan. Principal contractors and 

grantees: to be determined. 

Support Family Planning 

Support Family Planning ($856,000 CSH). USAID intends to begin graduating from the family planning 

program. In coordination with the United Nations Fund for Population Activities, USAID plans to continue 

improving the capacity of the MOH to provide quality family planning services to poor and rural areas of 

Paraguay. Technical assistance will improve public sector provision of contraceptives including continued 

support to improve the MOH’s capacity to forecast, finance, procure, and distribute contraceptives. This 

assistance will be expanded to the Social Security Institute to ensure that all actors within the health 

sector are assuming their responsibility in providing contraceptives. Principal contractors and grantees: 

John Snow, Inc. and others to be determined. 

FY 2006 Program 

SO: 526-010 Employment generated through diversification of markets and products 

Increase Trade and Investment 

No obligations are planned in FY 2006 as the program will begin in FY 2007. 

FY 2007 Program 

SO: 526-010 Employment generated through diversification of markets and products 

Improve Private Sector Competitiveness 

Improve Private Sector Competitiveness ($1,000,000 DA). A follow-on program to the highly successful 

Paraguay Vende activity will be implemented to continue supporting private sector growth through 

technical assistance to individual firms. Technical assistance will be used to provide marketing and 

general business expertise. This will include supply chain development services that allow firms facing 

immediate business opportunities to utilize the assistance to increase sales in the short term. The 

program will emphasize the importance of generating exports and improving market access in order to 

strengthen private sector ties to the global economy. Principal contractor or grantee: to be determined. 
15

Increase Trade and Investment 

Increase Trade and Investment ($300,000 DA). USAID plans to support efforts to reduce regulatory, 

policy, and institutional constraints affecting trade and investment by providing technical expertise to 

business associations and Government of Paraguay initiatives. This assistance is planned to facilitate 

public-private dialogue and advance reforms to the business environment conducive to increased trade 

and investment. Principal contractor or grantee: to be determined. 

FY 2006 Program 

SO: 526-011 Conservation Management of Globally Important Eco-regions Improved 

Improve Sustainable Management Of Natural Resources & Biodiversity 

No obligations are planned for FY 2006 as this program begins in FY 2007. 

FY 2007 Program 

SO: 526-011 Conservation Management of Globally Important Eco-regions Improved 

Improve Sustainable Management Of Natural Resources & Biodiversity 

Improve Sustainable Management Of Natural Resources & Biodiversity: (DA $1,000,000). USAID plans 

to improve the conservation of biodiversity in prioritized areas of globally important eco-regions. 

Training and technical assistance are planned to improve conservation measures in private and public 

protected areas and in buffer zones around them. On a pilot basis, this may involve areas which are 

concessioned. Technical assistance in buffer zones may focus on alternative and ecologically friendly 

economic activity. Support will also be provided to increase public awareness of local environmental 

issues, formulate management plans, and train local officials. Development of mechanisms for land 

purchases to promote biodiversity and assistance in the creation of biologically important corridors will 

also be supported. Environmental and natural resources policy and regulatory frameworks will be 

reinforced. USAID may provide training and technical assistance to strengthen selected local 

governments with the intent to improve their capacity to undertake zoning and land use surveys, as well 

as enforcement activities. USAID may provide technical assistance to assure that protected areas have 

title or legally definitive status, seek to promote citizen participation in identifying and addressing local 

environmental issues, and strengthen communities’ and municipalities’ capacity to respond. An important 

emphasis will be given to communities living in buffer zones surrounding protected areas. Assistance to 

these poor communities will be based on participatory studies involving the residents. Principal 

contractor and grantees: to be determined. 

FY 2006 Program 

SO: 526-020 Reduced Impunity and Informality in Paraguay 

Improve Economic Policy and the Business Environment 

Improve Economic Policy and the Business Environment ($13,464,759 MCA). Technical assistance is 

being provided to reduce informal economic activity by increasing the formality, operational efficiency, 

and transparency levels within the government Tax Authority; increasing the number of enforced 

sanctions imposed for customs related crimes; increasing the Ministry of Finances' internal investigative 

capabilities to reduce tax and customs related corruption; reducing the number of days to open a 

business through simplified processing and call centers that cut through red tape; and encouraging formal 

investments in duty-free assembly and re-export activities to provide a legitimate alternative to black 

market activities. Principal contractors: To be determined by a competitive process. 

Promote And Support Anti-Corruption Reforms 

Promote and Support Anti-Corruption Reforms ($23,605,489 MCA). Technical assistance is being 
16

provided to strengthen key institutions in the fight against corruption and impunity. Impunity is being 

reduced by: strengthening the investigative capability and internal controls of the Public Ministry; 

strengthening the Supreme Court by setting up an effective internal control and disciplinary system to 

deter illegal conduct; increasing the integrity and effectiveness of government operations by adopting an 

effective internal auditing system in the five most important ministries; designing and implementing an 

integrated public information management and registry control system that will allow information and 

coordination between the National Police Department, the Motor Vehicles Registry, and the Office of 

Court Records of the Judiciary; and improving the capacity of the National Congress to provide oversight 

of public finances and increase citizen participation in the oversight process. Principal contractors: To be 

determined by a competitive process. 

FY 2007 Program 

SO: 526-020 Reduced Impunity and Informality in Paraguay 

Improve Economic Policy and the Business Environment 

No obligations are planned during FY 2007. 
17

Results Framework 

526-004 Key Democratic Governance Practices Instituted 

Program Title: Democracy & Governance 

 IR 4.1: More effective and accountable local governments developed. 

 IR 4.2: Development of an active civil society encouraged. 

 IR 4.3: National democratic reform process expanded. 

526-005 Management of Globally Important Ecoregions Improved 

Program Title: Environment 

 IR 5.1: Ecoregional management capacity of local NGOs strengthened. 

 IR 5.2: Policy, legal and financial tools from improved ecoregional management developed. 

526-006 Use of Voluntary Reproductive Health Services Increased 

Program Title: Reproductive Health 

 IR 6.1: Decentralized community based health care improved. 

 IR 6.2: Access to quality reproductive health services expanded. 

526-007 Increased Incomes for the Poor in Selected Economic Regions 

Program Title: Economic Growth 

 IR 7.1: Business development strategies implemented. 

 IR 7.2: Availability of financial services in target areas increased. 

 IR 7.3: Business environment for micro and small businesses improved. 

526-008 Corruption Reduced and Good Governance Improved in Key Sectors 

Program Title: Democracy and Governance 

526-009 Health Coverage for the Underserved Population Improved 

Program Title: Health 

526-010 Employment generated through diversification of markets and products 

Program Title: Economic Growth 

526-011 Conservation Management of Globally Important Eco-regions Improved 

Program Title: Environment 

526-020 Reduced Impunity and Informality in Paraguay 

Program Title: Paraguay Threshold Country Program - MCA