On August 3, The Council on Hemispheric Affairs published an article entitled “The Paraguay Imbroglio: A disconcerting endgame,” authored by Eric Stadius. One of Stadius’ arguments is that the impeachment of former president Fernando Lugo and his replacement with President Federico Franco, which had followed the so-called Curuguaty Massacre where seventeen people lost their lives, has not “enacted” any change in Paraguay’s political scene. 

Indeed land reform has been the priority of Franco’s newly formed government. In his first week after taking office, Federico Franco’s administration started negotiations with leaders of various sectors in order to solve the situation of landless indigenous communities.  On July 6t the president announced that Paraguayan Vice President Oscar Dennis will lead the land distribution mediation process with the intention to bring a solution to this problem.  Franco declared that 16,200 acres of land positioned in the Colonia Barbero will be transferred to the current occupants of this property. Under Lugo’s watch,  nothing like this was done regarding agrarian reform.
What Lugo did support was a form of the theology of liberation undertaken by various left-wing groups, including the Paraguayan People’s Army (Ejercito del Pueblo Paraguayo), Equality Group (Tekojoja)  and Great Front (Frente Guazu).   There is no doubt that the Colorado Party has corrupt elements, but it should be kept in mind that former President Lugo and his top generals do not fall far behind in receiving bribes and foreign stipends. In his first year in office, President Lugo purchased a private ranch.  In three years and ten months as president of Paraguay, Lugo traveled 75 times abroad, while at times even his chauffeur was traveling with his delegation.  As a stirring figure of Bolivarian socialism, Lugo has all heartedly supported the economic and political initiatives of Venezuelan President Hugo Chavez. In addition, Lugo periodically received a considerable amount of cash from Venezuela, as did his top generals. 

In fact, General Adalberto Garcete Martínez, Division Gen.  Ángel Vallovera Antúnez, Lugo’s personal confidant and Admiral Juan Carlos Benítez Fromherz, are being investigated for their relationship with  Venezuelan Foreign Minister Nicolas Maduro.  The latter visited the Paraguay’s armed forces’ headquarters adjacent to the presidential palace and on June 22 attempted to convince the aforementioned generals to take up arms against the Paraguayan National Congress to secure the Lugo’s threatened presidency.  The only general who helped prevent this armed undertaking was the Chief of Paraguayan Air Force, Gen.  Miguel Christ Jacobs. 
The Paraguayan generals where on Venezuela’s payroll, topping off their Paraguayan salary.  Venezuelan government paid Vallovera, Benitez and Garcete, well over $ 3500 per month. As Lugo’s impeachment  was taking place, this was the perfect time for the Venezuelan foreign minister  to reap the fruit of his investment in Paraguay’s generals. At the beginning of impeachment process, former President Lugo offered nine ministerial posts to the UNACE (Union Nacional de Colorados Eticos), led by a retired General, Lino Oviedo, in order to prevent his political demise.  During the early morning hours of June 23, Senator Sixto Pereira departed for Venezuela report everything to President Chavez everything that had happened in Paraguay on the night before.  

Over a month after his impeachment, former President Lugo is asking to return to his seat. One of the two groups comprising the Great Front (Frente Guazu) has showed support for Lugo’s candidacy in the 2013 presidential elections.  Lugo’s political intentions were condemned by President Franco, while Lugo’s popular support has dramatically dropped and he will have a difficult time to gain support from fellow Paraguayans living in rural areas. 

Another historic achievement stemming from the current political situation in Paraguay is the historic  alliance between the Colorado Party and the Liberal Party in impeaching Lugo.  It was never thought before that these two political parties could come into agreement for such an important matter.  It should be recalled that many Liberal Party leaders were persecuted during the thirty-five years of President Alfredo Stroessner’s regime. For example, President Stroessner knew that the province of Concepcion was a bastion of Liberal Party adherents and thus decided to forego the building of roads and other means of communications there.

The alliance of the Colorado Party with the Liberal Party and UNACE (which has nine senators and fifteen representatives in the Paraguayan Congress), marks a stunning progress in Paraguayan democracy and assures a consolidation of institutional independence and decision making in Paraguay. Tiny and landlocked Paraguay is thus a model for parliaments of neighboring countries who are currently on the Bolivarian path and are not free to think independently. The impeachment  of former President Lugo was conducted under Article 225 of the national constitution, which has been underscored in a finding by the Organization of American States.
In an interview three months after President Lugo took office, former Paraguayan president Luis Angel Gonzales Macchi told me that one of Lugo’s challenges was his lack of political experience and inability to work closely with Congress to push forward not only agrarian reform, but also land distribution, infrastructure and rural communication projects.

Landlocked Paraguay has only 4,500 km of paved roads and is the only county in South America where cattle and horse regularly cross the national highway system, throughout various urban segments.   In May 2012, I was traveling from the town of Ñeembucu to the capital of Paraguay, Asunción, and at the entrance to Paraguari province I found a dozen police officers a highway outpost pulling vehicles to the side of road for various reasons. About twenty yards from this police station, there were two cows crossing the main road while the officers on duty did not bother to stop them even though they are a cause of frequent accidents. This might be seen as a metaphor as to former President Lugo’s style of governance.

Lugo’s style of governance was not the same as President Franco’s.  After the swearing in ceremony,. Franco was congratulated by his Minister of Industry and Commerce, and the president’s immediate response was to get moving with the project of the Canadian mining firm Rio Tinto Alcan (RTA.  Franco  has asked this same minister to make sure this project is swiftly executed. Lugo’s modus operand, on the other hand, was passive and without a clear strategy in mind towards the implementation of strategic projects funded by foreign investors.

Former President Lugo had been characterized by his incompetence with regard to the Curuguaty Massacre, where 17 people died, including several police officers. Lugo appeared in front of the press five days after the massacre, giving a very brief press conference and announcing the designation of a new minister of the interior and new national police Commander, without previous consultations with the  Franco who was then serving as his vice-president.  Suspicions were piqued when it was determined that police officers participating in the Curuguaty operation were forbidden to know any classified information about the protesters they were about to confront. The concern in Paraguay is that Lugo did this to provoke a state of instability in the country and have the armed forces lockdown the National Congress. Lugo would have then declared the state of emergency and take actions to postpone the 2013 general elections. Once this was to take place, Lugo would have the prerogative to redraft the constitution and establish a later date for the elections, giving Lugo a presidency with the same privileges of Venezuela’s Hugo Chavez.

A Bright Future for Paraguay

Paraguay is the fourth largest exporter of soy beans and the biggest producer of sesame seed in the world.  The Chaco region of Paraguay has oil resources which have not been tapped yet. Also, Paraguay shows great potential for extracting valuable minerals such as titanium and uranium which could reshape the Paraguayan mining industry and change the direction of its national economy.   Paraguay is the largest producer of renewable energy per capita. The  Itaipu hydroelectric dam, the largest in the world, in combination with Paraguay’s mining reserves could diversify its industry and increase the employment rate, considering that 60 percent of the population is below 30 years of age.

According to Stadius at the Council on Hemispheric Affairs, Argentina and Brazil have suspended Paraguay from MERCOSUR, while Venezuela has cut the delivery of petroleum. What Buenos Aires and Brasilia failed to recognize was the freedom that the Chaco oil reserves can provide to Paraguay, while they also violated their respective binational treaties that assure the administration of the Itaipu and Yacyreta hydroelectric dams. Brazil and Paraguay jointly operate the Itaipu hydroelectric dam on their common border, while  Argentina and Paraguay have a similar arrangement for the Yacyreta power station.

Indeed, President Franco is now talking tough with Argentina and Brazil and threatening not to “give away” energy to neighboring countries. Instead, Franco would use hydroelectric power to light up joint projects at home.  “When are Brazil and Argentina going to respect us? When the government tells them, 'Actually, we are going to use our own energy. Paraguay is changing its position. It is no longer going to give away its energy',” Franco said.  He added, “Is it fair to pay the same price for power for 50 years?” Franco said on August 8 in a speech on energy policy. “I refuse to accept that Paraguay has to give its energy away as a gift.”  Industrialization of Paraguay is a main plank in Franco’s presidency, as well as increasing Paraguay’s leverage with its massive neighbors by increasing the price of energy sold to them.

Legal and strategic matters

Stadius continues with his article stating that “Paraguayan constitution condoned such a speedy process…the impeachment failed to uphold democratic legitimacy in a country where the populace already has little input in the political process.” According to Article 225 of the Paraguayan Constitution, the Paraguayan national Congress is allowed to proceed with impeachment against the president.  The Organization of American States averred that the impeachment process was indeed constitutional and done in accordance with the law. According to Lugo’s attorney, his defense team had more than 17 hours to prepare his defense case that was to be presented before the Senate. Paraguay was not allowed to participate in the Mendoza Summit where the heads of state of the MERCOSUR countries met, let alone to present its case.  Argentina, Brazil, and Venezuela have recalled their ambassadors and refuse to recognize the new government, thus further complicating diplomatic relations for the whole region.

For United States, now is the time to reshape its strategic interests in South America and extend to Paraguay multi-dimensional aid to foster further its government reform, public health projects and improvement of education.   American Airlines and a number of American companies importing organic sugar from Paraguay are some of those doing business in Paraguay.  Paraguay was the largest exporter of organic sugar to United States in 2011 year, reaching over 35.000 tons. Rio Tinto Alcan (RTA) of Canada will build an aluminum smelting factory which will strengthen Paraguay’s economy and employ more than 9,000 people. RTA will purchase energy from the Itaipu Hydroelectric Dam at almost the price charged to Brazil.   Thanks to the persistence of former U.S. Ambassador to Paraguay, James Cason, foreign investment expert. Blas Oddone, and National Representative Blas Lanzoni, American Airlines will begin daily flights from Miami to Asuncion on November 14, 2012. On August 7, Alain Denis Henchoz, the new ambassador of Switzerland presented his credential letters to President Franco.  On August 8 was approved the export of beef products to Peru, which is one of Paraguay’s ten biggest importers. 

In conclusion, the U.S. presence in Paraguay is strategically important since it would serve as a safeguard against any military adventurism on the part of Brazil, contain and monitor the presence of China  and Iran in the region, as well as stop the constant political meddling orchestrated by Hugo Chavez and his close associates in the Southern Cone.   

 Speroforum columnist Peter M. Tase is a former Peace Corps volunteer who served in Paraguay.

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