As part of our ongoing efforts to expand our coverage throughout Latin America, we at The Bubble are pleased to announce a new monthly article series focusing on Paraguay.
Paraguay, nestled in the very heart of South America between Argentina and Brazil, does not receive much attention in the English language media, so readers at home may have a lot to get caught up on. Don’t sweat it; we’ve got you covered. For the debut article in the series we begin with the big picture: the newly sworn in President of Paraguay, Mario Abdo Benitez Jr.
Paraguay has a new president?
Yes, on April 22th of this year, Mario Abdo Benitez Jr. won the Paraguayan presidential elections. He took office on August 15th, and will serve a single, five-year term. The Paraguayan Constitution (adopted in 1992) prevents Presidents from seeking re-election (more on this later).
Ok, slow down. Who was president before?
Abdo replaces previous president Horacio Cartes, a private sector multi-billionaire who governed from the Colorado Party. Cartes oversaw five years of large economic growth, private sector investment, and large infrastructure projects, mostly in the nation’s capital city – which is Asuncion by the way. You knew that, right?
Both former president Cartes and his successor Abdo are members of the Colorado political party, one of the two dominant political parties in Paraguay, along with the Liberal Party. In fact, every single elected president since the beginning of Paraguay’s modern democracy in 1989 has been a member of the Colorado Party, except for one who was elected in 2008. This one lonely non-Colorado, Fernando Lugo, was promptly impeached and removed from office in 2012.
Paraguay has only been a democracy since 1989?
Yes. Between 1954 and 1989, Paraguay was ruled by the dictator General Alfredo Stroessner, also a Colorado. Stroessner’s brutal regime committed many well documented human rights violations, including political kidnappings and disappearances, torture, murder of homosexuals and other minorities, and general suppression of freedom of speech and press.
In 1989, General Andres Rodríguez led a military coup and removed Stroessner from office, ending what remains to this day South America’s longest uninterrupted period of dictatorial rule. For those keeping score at home, Mario’s term will bring the Colorado Party’s control of the government to nearly seventy consecutive years, minus the brief interruption between 2008 and 2013.
Ok. So president Abdo and dictator Stroessner are from the same party. How do we feel about that?
This is where things get complicated. The new president, Mario Abdo Benitez Jr., is the son of Mario Abdo Benitez Sr., who was Stroessner’s private secretary and one of his four closest advisors, the so-called Cuatrinomio de Oro. When Stroessner was overthrown and fled to Brazil, Abdo Sr. was taken into custody for his contributions to the dictatorship. This is why some attentive readers may have heard Abdo Jr. referred to by the diminutive name Marito, to distance himself from his father’s unsavory legacy.
So Abdo Jr. keeps his distance from Abdo Sr.?
Not so fast. This was by far the biggest issue of the presidential campaign, in which Marito defeated his Liberal opponent Efrain Alegre, by four points. Because of his last name, Marito’s opponent regularly accused him of “stroenismo.” Yet Marito has done little to beat the accusations; at his election night victory party he made sure to label his father as a “great Colorado.” In his defense, he has condemned the human rights abuses committed during the dictadura, but he often softens the condemnation by simultaneously expressing admiration for the infrastructure projects completed during the dictatorship.
Should Paraguayans fear a return to the dictatorship?
No. For the time being, Paraguayan democratic institutions appear strong enough to withstand executive power grabs. In fact, Marito first entered the political spotlight through his condemnation of a proposed Constitutional amendment that would have allowed presidents to seek reelection. The Cartes-backed amendment was defeated last year, but not before protestors burned the national Congress and a young political demonstrator, the twenty-six year old Rodrigo Quintana, was killed by police within liberal party headquarters.
Ultimately, the amendment failed and for the time being Abdo has denied interest in re-election, which remains illegal.
Then what should Paraguayans expect from Marito’s term?
Most outside commentators expect Marito to keep Paraguay on the rapid economic growth path carved out by his predecessor. Even as the much larger economies of Argentina and Brazil have faltered in recent years, Paraguay maintained an impressive average annual growth rate of six per cent. Abdo has indicated that he will continue to increase foreign direct investment, and has already deployed his finance minister to seek capital investment abroad. Generally, Paraguayans should expect continued low levels of taxation and pro-growth business friendly policies.
With growth rates high and increasing rates of foreign investment, president Abdo looks poised to preside over one of the more tranquil periods in modern Paraguayan history. Yet many legitimate areas of concern remain. First is Paraguay’s atrocious public education system. A recent World Economic Forum index declared Paraguay’s primary education system to be ranked 136th out of 138 countries judged by overall quality. Math and science education was even worse- dropping to 137th out of 138 – second to last place. The new administration must address the urgent issue of the dysfunctional educational system.
Trouble Coming From Behind
However, the single biggest policy challenge facing the Abdo administration is sure to be the renegotiation of the Itaipu hydroelectric dam treaty with neighboring Brazil. The fifty-year 1973 treaty is set to expire under Abdo’s watch in 2023.
The renegotiation of the binational treaty, by which energy rich Paraguay is currently forced to sell its excess power at sub-market rates to energy hungry Brazil, will have an enormous impact on both the Paraguayan economy and its critical relationship with Brazil. In next month’s edition, we will break down what’s at stake in the treaty: what Paraguay stands to gain- and what it stands to lose.