The victory of Fernando Lugo in Paraguay's presidential election on 20 April 2008 marks an unforgettable turning-point to rank with any in the country's tortured history. Indeed, the importance of the event is on an even greater scale, and in two ways - Lugo's victory both puts an end to the sixty-one-year rule of the Colorado Party (the longest in office of any political party in the world), and installs a former Catholic bishop as president (another world first). At a stroke, a country used to the neglect of the world's media, and considered a backwater even in its own region, propels itself into the global record books!
Andrew Nickson is reader in public management
and Latin American studies at the University of Birmingham
Also by Andrew Nickson in openDemocracy:
"Paraguay: Fernando Lugo vs the Colorado machine" (28 February 2008) But if Paraguayans can bask in a rare moment of international fame, the real triumph and joy belongs "inside", in the dignified achievement of a fair election and the prospect of a peaceful transition of power in an environment where effective one-party rule has unbalanced the institutional and political culture for so long. Whatever happens now, and after Fernando Lugo's inauguration in Asunción on 15 August, Paraguayans have voted their country into a new period of history.
The balance of forces
Fernando Lugo only appeared on the political scene in early 2006, yet from this comparatively recent starting-point he has scaled the political heights in remarkable fashion. His victory was convincing: the preliminary official figures (with 92% of the votes counted, amid a 68% turnout) gave him 41% against his three main rivals. This left the others trailing - Blanca Ovelar (of the defeated Colorado Party) received 31%, Lino Oviedo (a maverick former army chief who been jailed for an attempted coup in 1996) scored 22%, and Pedro Fadul (founder of the modernising pro-business Patria Querida) saw his vote slump to 2% from 21% in the 2003 presidential election - a striking demonstration of the changing political mood in the region.
Lugo's win was the more impressive as it was achieved in the face of a vicious smear campaign. The lowest point was probably when the Colorado Party used the mother of Cecilia Cubas - the daughter of a former president kidnapped and murdered in 2005 - in TV spots, accusing Lugo of involvement in her daughter's death. Blanca Ovelar, however, was magnanimous in defeat and quick to accept the result.
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Lugo has committed himself to a platform of progressive social and economic change in order to address Paraguay's gross inequality of income and wealth - the worst in Latin America after Brazil and Guatemala. The means he proposes is targeted poverty-reduction programmes (the bolsa familia initiative of the Brazilian president, Luis Inácio Lula da Silva, is one obvious model here), support for small farmers through land reform, and combating Paraguay's endemic and notorious corruption.
The political challenge facing Lugo is considerable. In steering his course, there are elements in the election outcome that both favour the new president and potentially will handicap him. He should benefit from the bitter recriminations inside the Colorado camp, which is divided as well as vanquished. The outgoing president, Nicanor Duarte Frutos (2003-08), is widely blamed for having imposed Blanca Ovelar as his preferred candidate for the succession against the wishes of party activists. Duarte also engineered a place at the head of the party list for the senate; his presence in the upper house will exacerbate Colorado splits and thus aid the APC in its efforts to push through its reforms.
Lugo will also be helped in fulfilling his objectives by the fact that both leftwing and indigenous candidates have been elected to Paraguay's congress for the first time ever. They include the deputy Camilo Soares, head of the innovative and youth-dominated Partido-Movimiento al Socialismo (MAS) and the senator Margarita Mbywangi of the Aché ethnic group (indigenous peoples compose 3% of the population, though many more people share an indigenous inheritance).
Yet there are cautionary factors too. The results of the legislative election suggest that the coalition Lugo heads, the Alianza Patriótica para el Cambio (APC), may not have an absolute majority during the 2008-13 term. This matters since the excesses of the Alfredo Stroessner dictatorship (1954-89) led the framers of the 1992 constitution to craft a system that awards congress extensive powers and leaves the presidency fairly weak. Moreover, the Colorados won the vote in ten of the seventeen elections to head Paraguay's regional governments.
Neither can the new president rely on permanent unity in his shaky coalition of a dozen small leftwing parties, led by Lugo's own Movimiento Popular Tekojoja (MPT). The Alianza Patriótica para el Cambio also includes the Partido Liberal Radical Auténtico (PLRA), one of the two traditional parties created in the 1880s together with the Colorados. Many powerful groups inside the PLRA are deeply opposed to the introduction of income taxation and land reform, two aims central to Lugo's reform programme.
Even if Lugo can carry through his reforms, his government will face an enormous task in rooting out corruption to make way for the delivery of new social programmes. This will be made even harder by the control that the Colorado Party still exercises over large sectors of the public administration as well as the supreme court.
The Itaipú contest
In regional and foreign affairs, the biggest challenge of all is relations with Paraguay's neighbourly giant, Brazil. From the moment that he set out on his presidential bid, Lugo promised to renegotiate the Itaipú treaty, under which Paraguay sells to Brazil most of its 50% share of the energy from the largest hydro-electric undertaking in the world at a pittance(see "Paraguay: Fernando Lugo vs the Colorado machine" [28 February 2008]).
Also in openDemocracy
Isabel Hilton, "Alfredo Stroessner: revisiting the general" (17 August 2006)
As the election campaign progressed, it became apparent that this promise had captured the mood of the electorate, reflected in the fact that Ovelar, Oviedo and Fadul - all of whom had criticised Lugo for raising the matter - were forced into a hasty reposition. A national consensus has now clearly emerged inside Paraguay on the issue.
But Itaipú accounts for 19% of all energy consumed in Brazil, and remains high on its geopolitical agenda too. The response of Brazil's government has been intransigent: before the election, foreign minister Celso Amorim said that no renegotiation could take place before 2023, when the fifty-year treaty expires (even though it was signed between two illegitimate military governments back in 1973). Moreover, President Lula took the opportunity of his congratulatory official message to Lugo to deliver a surprising diplomatic snub - the ex-metal worker reminding the ex-priest that renegotiation of the treaty was out of the question.
But the symbolic importance of Itaipú to Paraguayan has become so great that Lugo is likely - in an echo of the Argentina-Uruguay pulp-mills dispute - to contract international experts to present its case to the International Court of Justice. It may be too that financial support will be offered to Paraguay (or requested from Paraguay) by Venezuela's president, Hugo Chávez. The contest for influence over Paraguay's new president among the regional powers will be worth watching.
The Itaipú question is sensitive in relations with Brazil for another reason: it concerns the vexed question of land reform. Paraguay is now the world's fourth largest soybean exporter, and most of the product is created by Brazilian immigrants who from the 1970s onwards have bought enormous tracts of land in eastern Paraguay; much of this is close to the enormous Itaipú lake created by the dam, which is so large that it has changed the map of Latin America.
These brasiguayos - paying no direct taxes, using non-minimum wage labour, and deforesting fertile virgin land - have begun to exercise powerful economic muscle while showing scant regard for environmental protection. On several occasions since the late 1990s, they have mobilised to block major highways with thousands of tractors in order to halt legislation that would have brought soy growers into the the tax system. Claudia Ruser, head of the powerful soybean-growers' association, has been an outspoken critic of Lugo, accusing him of fomenting invasions of private property by land-hungry peasant families, whose communities are increasingly becoming isolated islands of poverty surrounded by enormous soy plantations. After Lugo's victory, Ruser warned that relations with his government will be "very difficult".
Gabriel Torres, a Moody's analyst, made the essential point in an assessment for Latin Finance's daily brief on 20 April 2008: "Paraguay has almost no taxes for exports, and there are practically no taxes for the agricultural sector." World soy prices have trebled since late 2006, driving the area under cultivation to a new record in 2007-08 and trebling too the value of the country's total exports in 2005-07). Lugo's election gives him a strong mandate to begin taxing what is now the richest economic group in the country. But the sense of fiscal responsibility among the brasiguayos - whose attitudes are akin to white farmers in parts of southern Africa - remains limited, and they are likely to resist any new tax policy from Asunción, and appeal to Brazil for help.
The hardest test
The election, then, may be the prelude to tough times for Fernando Lugo. The good news is that Paraguay is finally embarking on a genuine democratic process, one that had been postponed for nearly twenty years since the Stroessner dictatorship ended in 1989. Now, a groundswell of popular energy and aspiration to structural change is emerging, including a new pride in the country's indigenous Guaraní language and cultural identity. This fuels a widespread sense of hope and optimism in a country where most people had come to despise politicians.
The fact that Lugo was not a "politician" was thus one of the strongest sources of his electoral appeal, and helped make him the catalyst for this shift. But as he dons the presidential sash on 15 August, he will be assessed no longer as a "man of God" but as a mere politician. This may for Lugo prove to be the hardest test of all.