Paraguay in the 21st century

Continued rule by the Colorado Party

After a decade of stagnation, the Paraguayan economy revived, spurred by rapid growth in soybean production. Indeed, Paraguay was one of the world’s largest exporters of soybeans at the beginning of the 21st century. However, despite faster economic growth, unemployment and crime rates remained high as the government failed to address the urgent need for land reform and industrialization. There was growing resentment at Paraguay’s subordinate role within the region, including calls to leave Mercosur. Also of concern were the terms of the hydropower Itaipú Treaty with Brazil (1973), which many Paraguayans saw as inequitable. Gonzalez’s term in office was scarred by corruption charges, and on April 27, 2003, Colorado Party candidate Nicanor Duarte Frutos won the presidential election, promising to fight corruption in his party and in his country. During his presidential term Duarte removed six judges from the Supreme Court who were suspected of corruption, introduced tax reforms, and pursued efficient macroeconomic policies. In June 2004 Oviedo returned from exile and was imprisoned for his 1996 convictions; he was paroled in 2007. In the historic 2008 presidential election, former bishop Fernando Lugo of the centre-left coalition Patriotic Alliance for Change (Alianza Patriótica para el Cambio; APC) defeated Blanca Ovelar of the Colorado Party, ending that party’s 62 years of continuous rule.

The Lugo interregnum

In 2009 it was discovered that Fernando Lugo had fathered a son while he was still a bishop. Other paternity claims were filed against him shortly afterward. Lugo was urged to step down, but he said that he would fulfill his five-year term. In April 2009 Lugo and Bolivian Pres. Evo Morales signed an accord settling the border dispute over the Chaco region that had caused the Chaco War in the 1930s. They blamed foreign intervention for fueling the war. In 2010, largely in response to his advocacy of Venezuela’s ascent into Mercosur, Lugo lost the support of Vice Pres. Federico Franco of the centre-right Liberal Party, who had been a key player in the broad coalition that brought Lugo to power.

Lugo’s attempts to introduce land redistribution were blocked by ranchers and large landowners as well as by the Colorado Party. After 17 people were killed when peasant farmers clashed with police who were evicting them from land in eastern Paraguay on June 15, 2012, Lugo came under criticism that culminated in his impeachment by the Chamber of Deputies on June 21. The next day the Senate quickly convicted Lugo of incompetence (39–4), removed him from office, and replaced him with Franco until an election could be held. Initially Lugo acceded to his dismissal, but within days he sought its reversal, calling the action a “parliamentary coup.” A number of Paraguay’s neighbours also questioned the legality of Lugo’s removal, including Argentina, Brazil, and Uruguay, all of which recalled their ambassadors from Paraguay. Moreover, both UNASUR and Mercosur suspended Paraguay. As time passed, however, few Paraguayans came to Lugo’s defense.

The Horacio Cartes presidency

In April 2013 the Colorado Party regained the presidency when businessman and political neophyte Horacio Cartes, one of the wealthiest people in the country, defeated the Liberal Party’s Efraín Alegre by capturing some 46 percent of the vote to about 37 percent for Alegre. By late 2015 Cartes had reneged on his initial promise to clamp down on endemic corruption in the public administration by appointing individuals to senior posts on the basis of merit alone. Instead, he gradually came to an accommodation with traditional leadership of the Colorado Party, choosing to tolerate the patronage system in exchange for its support in Congress.

The next year—while Latin America’s longest-running civil war, between the Colombian government and Fuerzas Armadas Revolucionarias de Colombia (“Revolutionary Armed Forces of Colombia”; FARC) guerrillas was apparently winding to a close—a rebel insurgency in Paraguay was heating up. In late August 2016, eight Paraguayan soldiers were killed in an attack in the town of Arroyito, in northern Paraguay. The roadside explosion and execution of the survivors was thought to have been carried out by the Paraguayan People’s Army (EPP), which was formally organized in 2008 but had been active for some two decades. The tiny Marxist group (thought to comprise only several dozen members) may have killed as many as 60 people since beginning its rebellion, which was carried out primarily with stolen weapons and funded through ransom kidnapping.

Despite broad fluctuations, Paraguay’s GDP expanded by an average of about 5 percent from 2008 to 2017, benefitting from the country’s export of beef and soybeans as well as from Cartes’s successful courting of foreign investment. Looking to capitalize upon this continued prosperity, Cartes sought to have the constitution altered to allow him to run for an another term as president. Determined to prevent the ascendence of another Stroessner-like strongman, the country’s 1992 constitution limited Paraguayan presidents to one term. After a Senate vote to amend the constitution failed in August 2016, members of the Colorado Party began holding “alternative” sessions that were attended by only some members of the opposition. In one of these sessions, on March 31, 2018, 25 senators (two more than a majority of the normally 45-seat body) voted to amend the constitution to allow Cartes to run again for the presidency. The opposition, however, declared that the vote by the “alternative” Senate was illegal, arguing that approval by a constituent assembly was required to amend the constitution to change presidential term limits. Seemingly as outraged by the senators’ political end run as they were by the amendment itself, protesters invaded the Congress building on March 31 and set fire to it. By mid-April, Cartes had demurred and announced that he no longer intended to seek reelection. Moreover, before the month was over, the Chamber of Deputies (the lower house of Congress) had rejected the amendment.

The presidency of Mario Abdo Benítez

With Cartes sidelined, the Colorado Party chose Mario Abdo Benítez, a 46-year-old former senator, as its candidate in the April 2018 presidential election. Abdo Benítez, whose father had been Stroessner’s private secretary, shared a pro-business socially conservative outlook with his main competitor, Alegre, who ran as the candidate of the Liberal Party and the GANAR coalition. Some preelection opinion polling found Abdo Benítez to have a 20 percent lead over Alegre, but the actual contest proved much closer, as Abdo Benítez captured the presidency by taking a little more than 46 percent of the vote to about 43 percent for Alegre. The remainder was divided among eight other candidates.

Arguably the biggest challenge that Abdo Benítez faced as president was leading Paraguay’s response to the COVID-19 global pandemic, which began sweeping the world in early 2020. Because Paraguay was quick to close its borders and impose other measures aimed at containing the spread of the coronavirus SARS-CoV-2, which causes the potentially deadly disease COVID-19, the country fared better than many of its neighbours in the early stages of the pandemic. However, when Paraguay’s health care system struggled to respond to a surge of the contagion that began in March 2021, many people blamed Abdo Benítez, especially for the limited amount of vaccines that were available in the country. Protesters took to the streets, and in the Chamber of Deputies an unsuccessful attempt was made to impeach the president (it was rejected by a 42 to 36 vote). By October 2022, with the virus under control, Paraguay had removed most COVID-19-related health protocols, but resentment of Abdo Benítez’s handling of the public health crisis remained.

Abdo Benítez and the Colorado Party were also the targets of corruption accusations. Former president Cartes, who remained the head of the party, was accused of money laundering and tobacco smuggling, and the current vice president, Hugo Veláquez, was tied to drug trafficking. In January 2023 both men were sanctioned by the United States for “rampant corruption” as well as for their alleged involvement with the Lebanese militant group Hezbollah, which the U.S. government considers a terrorist organization.

As the 2023 election approached, a rift developed in the Colorado Party that resulted in the faction led by Abdo Benítez supporting one candidate for the party’s presidential nomination and the faction led by Cartes backing another. In the end, Cartes’s handpicked candidate, former finance minister Santiago Peña, secured the nomination. In a field that included 12 other candidates, Peña’s principal challenger was Efraín Alegre, making his third run for president, this time with the backing of the broad Concertación coalition, comprising some two dozen political parties. Among the other contenders was far-right candidate Paraguayo (“Payo”) Cubas.

In addition to the widespread disgust with the country’s seemingly endemic political corruption, economic concerns such as unemployment and inflation were central issues in the campaign, as was the matter of Paraguay’s relationship with Taiwan. Peña supported maintaining Paraguay’s longtime economic ties with Taiwan, whereas Alegre advocated abandoning Taiwan and pivoting to China, which offered a huge potential market for Paraguayan beef and soybeans. Opinion polling indicated that the race between Peña and Alegre would be tight, but the results were anything but close, as Peña coasted to a commanding victory, capturing nearly 43 percent of the vote, compared with only about 27 percent for Alegre. The election’s other big surprise was the unexpectedly strong showing by Cubas, who garnered nearly 23 percent of the vote and seemingly played the role of spoiler for Alegre by siphoning off a large chunk of antiestablishment voter. In the national legislative elections, the Colorado Party captured majorities in both the upper and lower chambers. It also was victorious in 15 of 17 gubernatorial contests.