South America - Economy

More than half of Paraguay's workers are engaged in agriculture and forestry; less than 15% work in industry and mining. The principal crops are cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava, and fruits; cattle raising is also important. Orange groves furnish petitgrain, used in perfumes and flavorings. In addition to quebracho, hardwoods and cedars are commercially exploited. Meatpacking, sugar processing, cement production, textile and wood-products manufacturing, brewing, and the production of other consumer goods are the main industries. The country also has a large underground economy based on smuggling, money laundering, and trafficking Bolivian cocaine.

Paraguay has minimal road and rail systems, and river transportation is the primary means of moving goods. HydrovIa, a proposed waterway to straighten and deepen the ParanA, was approved by Paraguay, Bolivia, Argentina, Brazil, and Uruguay in 1994. The ItaipU Dam on the ParanA River, completed in 1991, is one of the world's largest, and the electricity it generates is economically vital to Paraguay. The YacyretA hydroelectric project, also on the ParanA, was inaugurated in 1998.

The leading exports are electricity, soybeans, meat, feed, cotton, and oils. The leading imports are vehicles, consumer goods, tobacco, petroleum products, and electrical machinery. Paraguay's main trading partners are fellow members of the Southern Cone Common Market, the United States, and European Union countries. Customs duties furnish an important part of the country's revenues, but are significantly undercollected due to smuggling.

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