One year after taking office, Fernando Lugo is facing several crises simultaneously. On the one hand, there is the matter of his recent paternity scandal which sullied his public image inside and outside of Paraguay. But that scandal is not what keeps the Paraguayan president awake at night these days. As it happens, his strategy of navigating a boat he does not fully control over a multitude of near-antagonistic forces is headed for disaster. In this way, the traditional neoliberals are fighting bit by bit, platform by platform with the Left, which advances as a united force. In turn, the neoliberals are incessantly turning on themselves, pushing for a succession battle which would leave the internal party lines paralyzed in the face of presidential elections in 2013. The situation is so tense that even the vice president has pushed for the impeachment of the president in order to subsequently break the governmental coalition which united left and right. Now, from an ambiguous position, the neoliberals are neither the government nor the opposition. What they currently demand, in the words of Senator Blas Llano, is "co-governance."

One year after taking office, Fernando Lugo
is facing several crises simultaneously.

On April 2, 2008 the "Patriotic Alliance for Change" headed by Lugo won 40.83% of the votes, which earned him the presidency. The inevitable debate that followed revolved around the construction of the government. It turns out that since their candidate won support in opposition to the traditional Colorado Party of then-President Nicanor Duarte Frutos, there was a dilemma. The Left, small and dispersed, did not gain enough support to break the 61-year dominance of the Colorados. The Authentic Radical Liberal Party (PLRA), the "blues," only had a realistic chance if they backed the outsider Lugo, who promised agricultural reform and renegotiations with Brazil over the Itaipú dam. This was how a new coalition was constructed; greedy, unstable, with the Left and Right cohabiting.

Today, the neoliberals represent 82% of the coalition in the senate and lower house. The remaining 17% belong to representatives from the Left. This is why Lugo needs them, to manage daily activities. And the neoliberals know this, which is why they use it as a currency, negotiating support and pressure from what is supposedly their own government.

Without going into more detail, less than a year after taking up his post, Vice President Federico Franco, of the PLRA, has unsuccessfully pushed for the president’s impeachment, provoked by the crisis over the ex-bishop’s paternity. At that point, Franco announced without subtlety that he was "ready to govern."

Recent news has shown that Lugo’s other faithful ally, the current Senator and previous Minister of Justice and Employment Blas Llano, has stepped forward and demanded to co-govern while announcing the withdrawal of his party from the coalition but not from the government. As the head of the PRLA, Gustavo Cardozo, explained, his party will not hand back the three ministries that Lugo gave them. "Those positions belong to us as the absolute majority, because the majority of our voters opted for President Lugo in the 2008 elections."

Today the neoliberals are internally debating the measures to be taken. There are three likelihoods: one is led by Efraín Alegre, minister of Public Works, who due to the importance of the ministry he runs has become a heavyweight player. His strategy is to get close to Lugo and wait it out until the 2013 presidential elections. Another group, led by Senator Blas Llano, with one foot in and one foot out, searches for better correlation among his group’s forces, negotiating and dividing support in accordance with the specific situation. But there is also a third option, headed by the vice president, which is openly destructive. The latter two are both front-runners yet are conflicting.


Before assuming power, in the heat of the campaign, the ex-bishop said, "I don’t believe in ‘statism’ or total deregulation. I am in the center, just like the collar of my poncho. In the new Paraguay we have to build, we all have something to contribute, from ‘oviedistas’ [followers of the National Union of Ethical Citizens (UNACE)] to ‘stronistas’ [supporters of the ex-dictator Stroessner]." The internal and national set-up of his coalition was complicated, and Lugo had to perform a balancing act. One year after taking power, things are the same, if not worse.

"There is a fundamental error when Lugo is spoken of. He is compared to Correa, Chavez, Evo. But he should be compared to Carlos Mesa in Bolivia, Rafael Caldera in Venezuela, or in the worst of cases with Lucio Gutiérrez in Ecuador. All those people move from one system to another. But you shouldn’t believe that this is going to be a left-wing government. It wasn’t, it isn’t, and it won’t be," political scientist Marcelo Lacchi wrote. This does not only apply to him; it is a maxim shared by many parts of the Left in Paraguay.

Upon consulting Sixto Pereira, current senator of Tekojoja, a social movement with a peasant base allied to Lugo, on his organization’s best assessment of the current situation, he responded, "This government is an opportunity. It is not revolutionary or socialist. It is merely a democratic-bourgeois government which aspires to recover institutionality. This is a period of political accumulation in which it is important to continue strengthening popular organizations with an eye on 2013."

The left-wing parties which continue to support Lugo are the Paraguayan Communist Party, the Tekojoja Popular Party, the Popular Socialist Convergence Party, the Patriotic and Popular Movement Party, and the Socialist Movement Party. For the sake of evaluation, it could be stated that the tools that the different organizations could gather during this time are relevant, even more so if we bear in mind that prior to beginning this process their true capacity to politically influence the national reality was purely and simply marginal. Today they run a number of ministries: The Socialist Movement Party run the Emergency Management Agency and State Department, Tekojoja manages the Yacyretá Dam Binational Entity and the Ministry of Health, while the Secretary for Social Action remained in the hands of Pablino Cáceres, a priest and friend of Lugo, and associate of Tekojoja.

The State Department is strategic. It was within its corridors that a lengthy conflict was resolved over the Itaipú binational dam, a flagship policy of the Lugo campaign and nationally significant because of the protracted dispute which involved Brazil. With a near-starving country, Lugo urgently needed to follow through on his social promise to collect more for the state coffers. On the one hand, he suggested a tax reform which was strongly rejected by the elites. The other source was the shared dam with Brazil. But the situation was complex.

Based on a 1973 contract, Brazil alleges that the dam must continue as usual: the entire production divided between the two countries and each side consuming what they need. Later, if either country has a surfeit, it is obliged to sell it to the other at production price. In concrete terms it means that the Paulista (Sao Paulo) bourgeois, like a vacuum, sucks up the majority of Itaipú’s entire production.

A new agreement signed on July 25 consists of 31 points and establishes a compensation rate to be paid by Brazil to Paraguay of 5.1 to 15.3, which signifies a 200% increase. In other words, this increases the annual Treasury revenue from US $120 million to US $360 million. Brazil will also compensate Paraguay with a whole other set of investments in infrastructure, such as bridges, railways, and high-voltage transmission lines, the latter at a cost of US $450 million. Nevertheless, all of this must pass through both parliaments.

In political terms, for the Left, this money is the fruit of their labor, given that the chancellor, Héctor Lacognata, previously of the conservative "Beloved Fatherland" party and now of the Socialist Movement Party, brokered the new deal.

In the opposition camp is the once all-powerful Colorado Party, which today is completely fragmented and in crisis. José María Ibañez, who was a minister under Duarte Frutos, states that, "The Colorado Party is weak today, divided into small pieces with selfish and impulsive leaders who cannot manage to establish a dialogue to enable internal reconciliation." It turns out that, as the ex-minister states, "The Colorado Party was a party built to govern," and without power it has lost its way. "Its self-esteem is diminished and damaged." The Colorado Party leader and member feels the weight of being out of power, and punished by society. "It is therefore difficult to recover the attitude and self-esteem which enable the party to be a mechanism for dialogue between civil society and the state. This is because today the party does not have the strength of the state to resolve specific problems." He sums it up: "Today we are the lepers of society."

As such, the most natural opposition today is the National Union of Ethical Citizens (UNACE), whose leader, Lino Oviedo, exercises a tough, vertical, and nepotistic rule. It is with this internal cohesion and charismatic leadership that the Colorado-like UNACE does not have to wait reluctantly before advancing and achieving all it wants.

Agricultural Reform

Paraguay is today the fourth-largest producer of soy in the world. Between 1995 and 2006 cultivated areas quadrupled, growing from 735,000 to 2,400,000 hectares, equivalent to almost 25% of cultivatable areas. Its production—equivalent to 10% of gross domestic product (GDP) and 40% of Paraguayan exports1—is inseparable from what in the Guarani region is called the "Brazilian invasion." According to the estimates of researcher Sylvain Souchaud, the number of Brazilians and their descendents, popularly called "Brasiguayos," in Paraguay is around half a million. Facing this reality, one of the main promises made by then-presidential candidate Fernando Lugo was agricultural reform. A short time after the ex-bishop took power the campesino social movements began to take Brazilian-owned lands without the explicit support of the government. It was then that Brazil mobilized its troops to the border zones.

But the response was not just external; there were seismic movements inside the country too. This was shown by a request signed by Mario Centurion on page 13 of the Paraguayan daily ABC Color on Wednesday, May 20: "For 7 years we have been attacked by so-called peasants without land in the ‘Toro Blanco’ ranch (Caazapá), who occupy the best lands and prevent us from working in agriculture and ranching as the law permits us. Each time that I try to enter the place with employees I receive a hail of bullets from them. We cannot do anything there (…) Since the government doesn’t protect us, despite being a large contributor to this damn country without getting anything back: only harm, and since I am not going to give up against outlaws of that sort without considering the millions of prejudices received, I’m looking for and invite at least 20 brave men who I suppose must exist in this country, to work the 1,000 mechanized hectares of our property (…) I offer to share the profits that are generated. The objective is to save the property (…) I think that with 20 courageous men, armed to the teeth, we can fend off these bandits and work there peacefully. I wish to clarify that I am doing this because Paraguay, now governed by the guerrilla priest Lugo and his team of Marxists, should protect us and because I am not going to give up."

In this context, even Lugo’s Left understands the government’s prudence. In political terms, "How long can an agricultural reform wait?" CIP Americas asked Senator Pereira de Tekojoja.

"The first thing to do is to make a cadastre, or in other words, identify public lands and recover them for the state. That is going to necessarily involve confrontation, because the landowners are not going to sit and do nothing. The truth is that there is still no room to raise the agriculture question, when the district attorney and judicial power remain intact. In addition, a large part of the government and opposition would block any attempt in Congress. In short, given the correlation of forces, I doubt that there is a state policy in this respect. That is why the social and popular movements have to actively organize and mobilize themselves for change."

What is questioned here is Lugo’s dubious management. Lacchi sees it like this: "Lugo has no backbone; he changes his mind with the wind and does not have the strength to impose his vision, which is certainly not socialist. Lugo is a liberal-democratic-progressive-moderate, more moderate than progressive."

However, beyond the questions, they all recognize that something has changed with the election of Lugo. And this is not just because of a few progressive initiatives, such as health reforms that enable free medical attention in public hospitals. You can see it on the street, where there is a resurgence in political debate, where affiliation and identity are not only connected to tradition and colors (blue for neoliberals and multi-colored for the Colorados), but rather there is something that has transformed the way that politics is done.

One example is embodied in the unions and social movements that throughout the 61 years of Colorado rule have been bound to the state through repression or little perks. "In Paraguay, the link between the state and different organizations was always personal, not conducted through third parties. The relationship was one of friendly, likeminded individuals. Now, the relationship with authority is changing, as it becomes recognized as a political player. The time has come to make demands as an industry, not to beg. That is why the next government is not going to have an easy relationship with the unions. They are now going to have to negotiate things, rather than going to the politician’s house for a chat," adds Lacchi. And these types of changes, irrespective of what the specific situation and the management failures demand, are what will remain and endure.

End Notes

  1. See end of "Época en Paraguay" by Pablo Stefanoni. South American edition of Le Monde Diplomatique, July 2007.