The economist Santiago Peña, 44, took office on Tuesday as the new president of Paraguay, supported by the most oiled conservative machine in the region, the Colorado Party, which has been in power for 71 years almost without interruptions, between democracy and dictatorship. Peña will rule under the shadow of his political mentor, former Paraguayan president Horacio Cartes, declared “significantly corrupt” by the United States.
After leaving the management of Banco Basa, owned by the Cartes family, Peña won the elections on April 30 with the promise of creating half a million jobs in a country of seven million inhabitants. Peña promised it again this Tuesday in his inauguration speech in front of the nineteenth-century Government Palace of Asunción, capital of this landlocked country, wedged between Brazil, Argentina and Bolivia. Paraguay has a third of its population in poverty, 60% with informal jobs and two million people abroad.
On the banks of the Paraguay River, Peña promised to shrink the State and maintain the Catholic traditions and those of the party that dominates the Executive, Legislative and Judicial branches. He also addressed Horacio Cartes, whom he thanked for “persevering, without fainting, in building consensus and seeking agreements over differences.”
Three months before the elections, Cartes, a millionaire tobacco businessman who held office between 2013 and 2018, was accused by the United States Government of “indulging in acts of corruption before, during and after his term as president of Paraguay.” He barred her from entering the country, accessing banks and doing business with US companies.
The US Treasury says Cartes “founded his career and continues to rely on corruption” and accuses him of paying bribes of up to $10,000 to boost his run for the presidency in 2013. It also accuses him of investing at least $1 million dollars in 2017 to promote a constitutional reform that would allow him to run for a second term and to continue paying bribes to benefit his companies.
“This government begins with very strong signs of little political governance, the appointments of ministers and secretaries are from Cartes and not from Santi Peña,” Fernando Masi, a Paraguayan sociologist and economist with a master’s degree from Johns Hopkins University, told EL PAÍS. Masi, director of the Center for Analysis and Diffusion of the Paraguayan Economy, assures that in the anti-drug and anti-laundering institutions “they have put people who are going to defend the illegal activities of this man, at a time when the United States is determined that Paraguay not become a global drug hub.”
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As Masi explains, for an economic policy to be applied it needs a high degree of institutionality “and Paraguay has always had a very low one.” “Corruption practices are much higher than in other Latin American countries and also clientelism. And now something more dangerous is coming in that has to do with organized crime and drug trafficking, because Paraguay is becoming an important hub for the cocaine trade,” this researcher details. In recent years, the largest loads of cocaine seized in Europe originate from Paraguay, such as the 10 tons last July or the 16 tons seized in 2021.
A country in (non) voluntary isolation
Peña said he will strengthen already firm relations with the United States and Israel, to whom he promised to move his embassy from Tel-Aviv to Jerusalem. At the same time, he will opt for Taiwan instead of China, as the Colorado Party has always done since the days of the dictator Alfredo Stroessner (1954-1989). As a novelty, he promised to approach Venezuela and reopen its embassy in Caracas.
Peña took office surrounded by leaders of the region who do not share his ideology, but do share history, borders and sometimes conflicts. Like Brazilian President Lula da Silva, with whom he will have to discuss the clauses for the use of the Itaipu dam, the one with the highest production in the world, which Paraguay shares with Brazil on the Paraná River. Or with the Argentine Alberto Fernández, with whose successor he will discuss the free trade agreement between the European Union and Mercosur, or about trade in the rivers they share so that Paraguay has access to the sea.
Also in attendance were Chilean President Gabriel Boric, Bolivian President Luis Arce and King Felipe VI of Spain, as well as diplomatic representations from the United States and Taiwan. The former Argentine president Mauricio Macri and the Chilean Sebastián Piñera also did so, among a thousand other guests who filled the monumental esplanade of the pastel-colored palace gardens.
“We feel not only allies, but also brothers,” Peña exclaimed about Taiwan in his speech before thousands of guests, an important message being the island’s only ally in South America and one of the 13 countries that recognize it as a independent state.
The Vice President of Taiwan, William Lai, participated in the ceremony in Asunción, where he arrived the day before like almost all the other guests. Before, Lai made a stopover in New York, as his government had announced, arousing complaints from China that does not recognize the independence of what he considers a “rebel island”.
“Trade is important, we need to generate progress, but we also have to understand that the basis of relations has to be on the principle and democratic values. That does not mean that countries that do not have a democratic culture should be rejected. No. We are respectful, but yes, we believe that there is enormous value in our relationship with Taiwan, ”Peña told El PAÍS during an interview at his house days before the elections.
The new Peña government brings in old acquaintances from Paraguayan politics such as Enrique Riera, Cartes’s former Minister of Education, known for promising then to burn books that contained the word “gender.” He will now be Minister of the Interior. Meanwhile, outside the palace, but close by, in the very historic center of the capital, hundreds of organizations from the countryside and the city, together with progressive and left-wing parties, gathered under the slogan Fighting we are going to be better, in the which was the first protest against Peña. Paraguay is a country marked by inequality: while a construction worker earns a minimum wage, a liberal professional earns ten times more, according to Masi. “There is a lot of difference. And not to mention the owners of medium and large companies, ”he details.
“A large part of civil society is dissatisfied, articulated in Human Rights organizations, which in recent times have been highly attacked by speeches from political and religious leaders and in some way, in accordance with the region: fundamentalist, religious speeches of a authoritarian. Paraguay is no exception”, highlights Sara Mabel Villalba, a professor and social researcher at the Catholic University of Asunción, with a PhD from the University of Salamanca in Spain, to EL PAÍS.
Villalba fears that the concentration of power of the Colorado Party “will have an impact on the weakening of the rule of law.” And he remembers that Paraguay does not have a past of democratic governments. “And this affects the population in one way or another. It is replicated in the family, educational institutions, work environments, it permeates a large part of society. It allows or facilitates the normalization of an authoritarian system that does not go against the march of society. A large part of society sees an authoritarian system and an authoritarian discourse as normal and does not know of another form of government, or does not conceive of a very different form ”, he concludes.
Paraguay’s growth will continue to depend on agricultural commodities: soybeans and meat, which generate almost no employment. “That is, depending on the climate and international markets. But our commodities go to the world with drugs, our most competitive products, and that is already a big problem,” Masi says by phone, from his home near the Paraguay River, while shots ring out from the gunboat celebrating the new president.
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