Paraguay’s economy continues to be characterised by high levels of inequality. “No one left behind” is therefore a compass that can successfully guide development efforts, but it raises questions and poses major challenges in a country whose economy is growing steadily, along with its public debt (41.2% of GDP), and which nevertheless continues to have significant socio-economic gaps, such as inadequate levels of reduction in poverty. Paraguay’s GDP is well above the regional average, with a projected growth rate of 4.0% for 2025 and 2026, compared to the average of 2.2% and 2.3% for Latin America and the Caribbean for those years. However, these advances have not been reflected in income distribution, where inequality is close to the regional average. While income inequality for the region remains at a Gini Index of 0.452 for 2023, in Paraguay it stands at 0.444 for both 2023 and 2024. 

Based on the above factors, the government has accumulated social debts with its citizens in key areas such as social security, reducing informal employment, narrowing gender gaps, and improving income levels. These debts also include the need to address the structural problem of access to land, compounded by shortcomings in the rule of law. Transparency International’s Corruption Perceptions Index (CPI) 2024 gives Paraguay a score of 24/100, ranking it 149th out of 180 countries evaluated. Within the Southern Common Market (Mercosur) regional bloc, the country ranks lowest, compared to Uruguay with a score of 76 and a ranking of 13/180, Argentina with 37 (99/180) and Brazil with 34 (107/180). The measurement of principles relating to accountability, fair laws, open government, and accessible and impartial justice, carried out using the World Justice Project index, gives Paraguay a score of 0.46 out of 1 for 2024. This places it in one of the lowest positions, 24th out of 32 in the region. It has fallen to 100th place among 142 countries internationally, also scoring low compared to Mercosur countries, with Uruguay ranked 1st (0.72), Argentina 13th (0.52), and Brazil 17th (0.50).

In this context, the enabling environment for civil society is restricted. The legal framework remains a threat, given the enactment of Law 7363/24 on the control of social organisations, which is not yet in force due to a lack of regulations – a situation that could quickly change when the Executive Branch decides to implement this requirement. This process is accompanied by narratives from public bodies that have sought to challenge the contribution of civil society organisations (CSOs). There is further a trend of criminalising CSOs with some CSOs specifically targeted in the context of disputes between ruling party parliamentarians and international cooperation agencies. Likewise, controversies about the “woke” agenda have also reached the country, driven especially by sectors of the ruling party.  

These conditions and recent events have led to a visible decline in Paraguay’s democratic rating. In The Economist’s Index, it has gone from the already low category of “flawed democracy” in 2023 to “hybrid regime” in 2024. Its average score fell from 5.23 to 5.17. In terms of organised crime, Paraguay ranks 3^rd in the Organised Crime Ranking of 35 countries in the Americas, 2^nd in South America and 4^th in a measurement carried out for 193 countries worldwide.

The limitations of the enabling environment cannot cancel out the progress and efforts of civil society organisations in the country. Despite adversities, civil society continues to build paths that reduce setbacks and, at the same time, allow advances in democracy and the rule of law, with inclusive social development, based on collaborative work.

The conditions of the enabling environment for civil society in the country are largely disabling and have shown setbacks in various principles.

In order to record the current conditions of the enabling environment, consultations have been carried out with experts and leaders from different social sectors, who have given their time and shared their valuable experience and knowledge to examine the situation and challenges in the country. Data provided by secondary sources, especially civil society organisations, has also been reviewed, including reports from the EU SEE Programme and the Enabling Environment Baseline Snapshot.