Glossary -- Paraguay

Dessarrollismo: An economic policy that attempts rapid economic development with an emphasis on progress, often with a leading role for the public sector.
Encomiendas: A Spanish, colonial system of land grants to Conquistadors that included rights to the use of Indian labor.
fiscal year (FY): Calendar year.
guaraní (G): The national currency. From 1960 to 1982 the guaraní remained pegged to the United States dollar at G126=US$1. Responding to the completion of construction of the Itaipú hydroelectric plant and lower commodity prices for soybeans and cotton, in July 1982 the Central Bank established a multitiered exchange rate system. The most favorable rate was reserved for the imports of certain state-owned enterprises and for external debt-service payments. Three other controlled rated were applied to imports of petroleum and petroleum derivatives; distribursements of loans to the public sector; and agricultural imports and most exports. Commercial banks set a fifth, free-market rate that governed most of the private sector's nonoil imports. In early 1988, these five rated were G240=US$1, G320=US$1, G400=US$1, G550=US$1, and approcimately G900=US$1, respectively. The multitiered system constituted a massive subsidy to state-owned enterpreses. Central Bank losses in controlled exchange rate transactions accounted for nearly half of public-sector deficit in 1986. In July 1988, the Central Bank eliminated the two most favorable exchange rates; set G400=US$1 as the rate for imports of state-owned enterprises; external debt-service payments, and petroleum imports; and established G550=$US1 as the rate for disbursements for loans to the public sector, agricultural imports, and most exports. In January 1989, the Central Bank further devalued the guaraní by setting the controlled rates at G600=US$1 and G750=US$1 and also required petroleum imports to be paid at the higher rate. In early 1989, the free-market rate exceeded G1,000=US$1.
Gross Domestic Product (GDP): Total economic output in a given country. (See definition used in earlier volumes).
Gross National Product (GNP): Total market value of all final goods and services produced by an economy during a year. Obtained by adding GDP (q.v.) and the income received from abroad by residents less payments remitted abroad to nonresidents.
International Monetary Fund (IMF): Established along with the World Bank (q.v.) in 1945, the IMF is a specialized agency affiliated with the United Nations; it is responsible for stabilizing international exchange rates and payments. The main business of the IMF is the provision of loans to its members (including industrialized and developing countries) when they experience balance of payments difficulties. These loans frequently carry conditions that require substantial internal economic adjustments by the recipients, most of which are developing countries.
Informal Sector: Small, competitive individual or family firms engaged in petty retail trade and services, typically in urban areas.
Southern Cone: name for area of South America consisting of Argentina, Chile, Paraguay, and Uruguay.
World Bank: Informal name used to designate a group of three affiliated international institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the International Finance Corporation (IFC). The IBRD, established in 1945, has the primary purpose of providing loans to developing countries for productive projects. The IDA, a legally separate loan fund, administered, however, by the staff of the IBRD, was set up in 1960 to furnish credits to the poorest developing countries on much easier terms than those of conventional IBRD loans. The IFC, founded in 1956, supplements the activities of the IBRD through loans and through assistance designed specifically to encourage the growth of productive private enterprises in the less developed countries. The president and certain senior officers of the IBRD hold the same positions in the IFC. The three institutions are owned by the governments of the countries that subscribe their capital. To participate in the World Bank group, member states must first belong to the International Monetary Fund (q.v.).