Paraguay: New government faces elite resistance

Barely two weeks after being sworn in on August 15, a coup plot to oust newly elected Paraguayan president Fernando Lugo was exposed on September 2.

Reflecting a growing shift to the left across Latin America, the April 20 election of Lugo put an end to the right-wing Colorado Party's six-decade-long grip on power — including a 35-year period of military dictatorship.

In an August 15 interview with Argentine daily Clarin, Lugo — a former Catholic priest known as "the Bishop of the poor" — said one of his first measures would be to "recuperate institutionality".

"We are going to take over state institutions identified with the hegemonic party. We want these institutions to be at the service of all citizens, without ideological distinction", he explained.

A supporter of the landless peasants' movement, Lugo has also pledged to carry out a program of agrarian reform, although since being elected has criticised land occupations carried out by poor peasants arguing they should be a "last resort".

He has also promised to implement a series of measures to combat poverty.

However, this reform program has put him on a collision course with the right-wing oligarchy.

The coup plot allegedly involved Lugo's predecessor Nicanor Duarte, Attorney-General Ruben Candia Amarilla, electoral court president Manuel Morales and retired general Lino Oviedo. It was exposed after the group invited General Maximo Diaz Caceres, the officer who is the official intermediary between the armed forces and parliament, to a meeting on August 31 to discuss the best way of ousting Lugo.

Oviedo, who attempted a coup in 1996 after being sacked as army chief, is also implicated — though never tried — in the murder of former vice-president Luis Maria Argana in 1999 and the ensuing "Bloody March" massacre of six pro-democracy protesters on March 26, 1999.

Oviedo was pardoned by the Supreme Court for his role in the 1996 coup attempt just in time for him to run in the 2008 elections as a candidate for the National Union of Ethical Citizens (UNCE). He came third.

Parallel senates

Clifton Ross reported in a September 2 article that Oviedo specifically asked Diaz Caceres about the "appearance" of the military as a means of resolving a crisis over the existence of two competing senates formed, respectively, by Duarte and by Lugo.

Diaz Caceres immediately reported the meeting to the commander of the Paraguayan armed forces, General Bernadino Soto Estigarribia, who in turn reported it to Lugo — assuring him that the military would take no position on the question of the two separate senates.

The crisis of the two separate senates arose after Duarte illegally registered to run for the Senate while still serving as president, and attempted to get himself sworn in as a senator.

In a manoeuvre when only a minority of senators were present, Duarte and Oviedo managed to pass a resolution electing UNCE member Enrique Gonzalez Quintana as "president" of the senate, and swore in Duarte as a senator.

The majority of the Senate — involving some of the Authentic Radical Liberal Party (PLRA), other factions of the Colorado Party and Lugo's Alianza coalition — rejected these actions and formed a parallel senate.

In a press conference on September 1, with heads of the armed forces behind him, Lugo warned Paraguayans to be "alert against anti-democratic and retrograde sectors out to overthrow" the government and called on the people to mobilise in support of the process of change, according to a Reuters report that day.

On September 4, the Popular Social Front — formed after Lugo's election in order to unite left groups, social movements, unions and peasant organisations — held a rally of more than 10,000 people outside the Senate in support of the new president, shouting "Nicanor, go home!"

The same day, an ordinary session of the Senate passed a resolution excluding Duarte as an active member, but ratifying him as a non-voting "senator for life", as is traditional for ex-presidents.

Governments across Latin America, including Brazil, Venezuela, Argentina, Bolivia, Uraguay and Ecuador, as well as Organization of American States President Miguel Insulza, issued statements in support of Lugo.


Despite winning this first battle, Lugo faces enormous resistance to his program of change from the old elites, including from within his own governing coalition.

As a September 4 statement by the Brazilian Communist Party pointed out, the conservative PLRA occupies the vice-presidency and many ministries, constituting the government's largest parliamentary support base.

While the PLRA, Lugo's main institutional support, is opposed to any change in the agrarian structure, the main social movement is the landless peasants' movement, which is demanding land redistribution.

Paraguay is one of the biggest beef and soy producers in Latin America, however almost 80% of land is owned by only 1% of the population — many with ties to both the Colorado Party and PLRA.

According to Bloomberg, agriculture minister Candido Vera Bejarano indicated on September 8 that the Lugo government will press ahead with proposals for a new tax on soybean production and banning the growing of oilseed in some areas, as part of a broader agrarian reform package.

Currently soy producers pay no tax on exports.

Unlike neighbouring Argentina, which imposed a variable tax rate on soy in March that led to a four-month conflict with agricultural producers, Paraguay will attempt to negotiate a new tax with producers, Bejarano said.

The government will also create zones dedicated to small-scale farming, where the cultivation of soybeans will be prohibited, the minister said.

However, Luis Enrique Cubillas, advisor to Paraguay's Oilseed and Cereals Chamber (CAPECO) said soybean growers will protest if the government attempts to introduce a direct tax on exports.

"We have indicated before that we are willing to discuss a tax on profits with the government", Cubillas said. "But we will not accept any taxes on exports, in fact we will go out onto the streets to defend our rights".

As with other progressive governments in Latin America, Lugo will have to rely on the mobilisation of the popular masses to break this impasse with the oligarchy, if he is to genuinely implement a program of progressive change.