Lugo Must Choose his Battles

A Year of Lugo: In an Effort to Remain Relevant, Lugo Must Choose his Battles

• Paraguayan President, Fernando Lugo, has been in office for one year, but many of his campaign promises have yet to be fulfilled
• Lugo must fight powerful Brazilian-backed entities if he is to succeed in carrying out his agrarian reform promises
• So long as the ANR retains control, Lugo is powerless
• A much-needed victory for Lugo has occurred outside of Paraguay, as President Lula shows he is willing to compromise on renegotiation of the terms of the sale of Itaipú Dam hydro-electric power

Fernando Lugo, a former catholic bishop, became a beacon of hope for impoverished Paraguayans when he was elected in 2008, seemingly ending over half a century of Colorado Party (ANR) control. His unexpected victory came as a result of a coalition forged under the Patriotic Alliance for Change (APC), which included a number of interest groups that sought to topple the powerful ANR. The ten party alliance included groups fatigued with the ANR’s rampant corruption, as well as Liberals attempting to increase the land-locked country’s attractiveness to foreign investors.

Lugo’s campaign platform centered on ending corruption and pursuing agrarian land reform. April 20 marked Lugo’s first year in office; albeit a year without much progress. His vision of a new Paraguay has yet to be fully realized as he has had to contend against powerful forces. On the one hand, the formidable ANR retains control of the country’s legislative and judicial branches. On the other hand, in order to achieve land reform, Lugo must go head to head with powerful agri-businesses, which are traditionally owned by wealthy Brazilian nationals. In an effort to safeguard its interests in Paraguay, Brazil has utilized its armed forces to shine their bayonets. In October of 2008, it deployed troops to the “friendship bridge” that connects the two nations, claiming it was part of a drug interdiction campaign. As a result of these opposing forces, Lugo’s campaign pledges have been largely fruitless. Expecting rapid changes, landless farmers are becoming increasingly disillusioned by his lack of progress and have staged land occupations, occasionally in turn being subjected to violent evictions. Unfortunately, Lugo has failed to make significant progress in the redistribution of land to peasant farmers and has shown little prospect of ending the ANR’s tight grip on the country and the flagrant corruption it has institutionalized in Paraguay.

Agrarian Reform
One percent of the population owns 77 percent of the land in Paraguay leaving hundreds of thousands of campesino families without a sliver of land. A huge war debt after the War of Triple Alliance, which ended in 1870, forced the country’s leaders to sell off large sections of land to foreign entities. Further exacerbating the land disparity in Paraguay, corrupt leaders routinely granted friends and relatives pieces of land, which they then often sold to Brazilian citizens. Much of the land being claimed by the squatting campesinos has been acquired illegally, with much of it handed out during the dictatorship of Alfredo Stroessner (1954-1989). According to the Paraguayan Truth and Justice Commission, after examining close to 200,000 land grants, which amounted to 12 million hectares, nearly 8 million hectares were awarded between 1954 to 2003 with grave “irregularities” due to ex-parte agrarian legislation. Foreign agri-businesses have since been established throughout Paraguay and small farmers have been forced to live with runoffs from the indiscriminate spraying of pesticides and herbicides. These chemicals are often carried by the wind or sprayed with such resulting proximity to neighboring small farms that they turn out to be responsible for the destruction of crops, birth defects, and even death.

The Lugo administration made some progress in coping with this problem, when the president agreed to use funds coming from Paraguay’s share of revenue from the Itaipú Dam to pay for 22,000 hectares of land bought back from Brazilian landowners. The deal, brokered by the campesino Coordinating Committee for the Defense of Sovereignty and Agrarian Reform and a group of Brazilian farmers, was a clear victory for landless campesinos in Paraguay, as they long have been fighting the Brazilian presence. According to a U.S. Department of Agricultural study published in January 2009, the lands were expected to eventually be returned to indigenous farmers and retired from soy production. But, similar agreements will be difficult to negotiate in the future, as Paraguay’s economy relies heavily on the soy grown by these large scale producers.

Paraguay now finds itself in a distinctly compromising position. According to the North American Congress on Latin America, soy made up a staggering 50 percent of the country’s export sales in 2007, and accounted for 10 percent of the country’s gross domestic product (GDP). As of last year, Paraguay’s soy industry was growing exponentially due to increased demand for cattle feed and bio-diesel, although soy production itself is expected to shrink in 2009. As the soy agri-businesses expanded, a number of farmers were forced to abandon their lands after they experienced the effects of pesticides, while others were intimidated by strong-armed “thugs,” who were often associated with large-scale soy farmers, after they refused to grow soy or sell their lands to large scale producers.

In a speech early in his presidency, Lugo pointed out that the Paraguayan constitution respects private property, but it also guarantees the right of all Paraguayans to own land. His biggest support group, the landless campesinos and the poor of Paraguay, are demanding action and mean to hold Lugo to fulfilling his campaign pledges. However, their demands are at odds with those of the Authentic Radical Liberal Party (PLRA), the biggest party in the APC, who tenaciously support the protection of private property rights. The PLRA is also the second biggest holder of seats in the legislature after the ANR. Lugo would be wise not to heedlessly frustrate the PLRA if he wants their continued support, a necessary component in maintaining his political leverage in Asunción.

According to Joaquín Rivery Tur of Granma International, during Lugo’s first one hundred days in office, Paraguay witnessed 80 land occupations and respective land evictions, with one involving the death of Bienvenido Melgarejo, a member of the Farmer’s Association in Alto Paraná (ASAGRAPA). In November of 2008, the Paraguayan president assured his people that state efforts towards land reform already had been initiated, and he also reiterated that one hundred days is not enough time to enact meaningful change. Any progress in the venue of agrarian reform will require a massive restructuring of a series of state institutions, many of which are deeply tainted with the ANR’s influence and permanently act as an obstructive force. The agrarian reform guaranteed by the Paraguayan constitution and held on high by Fernando Lugo, will continue to see little, if any, actual realization given Paraguay’s current heavily partisan political climate.

The ANR Remains in Control
Despite Lugo’s election, in which he succeeded ANR member, Óscar Nicanor Duarte Frutos, the ANR continues to be a strong component of the Paraguayan power structure. Having retained a majority of seats in Congress, the ANR remains the main loci of legislative action in Paraguay.

The ANR’s most formidable foe in Congress, the PLRA, currently has 14 seats in the Chamber of Senators and 27 in the Chamber of Deputies, compared to the respective 15 and 30 seats swept up by the ANR. The PLRA could become a contending force by allying itself with other groups in Congress, but its opposition to land reform could make such an alliance impossible to achieve especially in regards to Lugo’s promises to the landless. These fundamental disagreements and a lack of interest in achieving such a coalition have eroded the PAC’s governmental power, effectively leaving Lugo alone with the wolves.

Renegotiation of the Itaipú Dam Contract
While running for the presidency, Lugo’s platform included the stipulation that a renegotiation of the Itaipú Dam contract would be undertaken. Lugo’s social programs will require massive funding, and he has looked to the 14,000 megawatt jointly-owned Itaipú Dam that connects Brazil and Paraguay in generating the much needed revenue. According to Mercopress, currently Brazil pays the Paraguayan Treasury $2.7 per megawatt per hour for the energy Paraguay does not utilize, at a time where international market prices were close to $60 per megawatt per hour as of April 2009. The contract had been contested by former president Nicanor Duarte and his inability to renegotiate what was universally seen as an outdated agreement was interpreted as a weakness on his part by the Paraguayan population. In a similar pursuit, Lugo attempted to renegotiate the contract that as of now only allows the sale of surplus energy to Brazil. President Luiz Inácio Lula da Silva, however, refused to budge, stating that there will be no change in the contract until its expiration date in 2023. Lugo knows that the agreement with Brazil over its use of the Itaipú Dam must be altered if he is to remain popular among Paraguayans, who have taken up the issue as a national cause.

However, although Lula continually has indicated that Brazil would refuse to budge on the issue, recent developments may indicate that Brazil is willing to compromise. Lugo’s reluctance to retract his condemnation of the 1973 treaty has bore some promising results. “If necessary we’ll take the issue to wherever necessary, although first we must exhaust all the bilateral mechanisms,” stated Lugo, stronger in persuading international venues than utilizing the processes available at home. With a lot of indignation and a set timeline, Lugo was successful in pressuring Lula to promise close to $1 billion in industrial projects (half of the total amount Lugo originally asked for) to compensate for the low prices paid for energy to the Paraguayan state which only uses about 6 percent of the energy produced by Itaipú. “It cannot be what Lugo wants, but we must find middle ground,” Lula recently stated, seeking to reach a proposal that acknowledges Paraguay’s claims. Such an arrangement should properly be seen as a small victory which still goes some way in overshadowing Lugo’s lack of domestic accomplishments. In his one year anniversary speech, Lugo further pushed for a fair deal that would give each country freedom to do anything with 50 percent of energy produced at the dam, and was greeted by cheers from the huge, ecstatic crowd.

Conclusion
The “bishop of the poor,” as he is popularly known after his many years of service as a liberation theologian that empowered the poor, has not “shown abilities to unify and lead in making the changes demanded by his bases,” according to April Howard of Upsidedownworld.com. Lugo will have difficulty uniting his supporters because of their conflicting interests. On the one hand, Lugo has the support of the huge social power composed of the landless and the poor, and on the other hand, Lugo’s coalition, the APC, includes a high number of PLRA members, who will not easily compromise their beliefs when it comes to the importance of private property.

Lugo must capitalize on his victories abroad where he has proven to be effective. It is likely that he will not be able to enact any sort of radical change when it comes to domestic policy as he is handicapped by the rift with the ANR, but he can retain the support he enjoys internationally by projecting his authority, as he has shown he can do in recent developments with Lula. Lino Oviedo, who came in third place in the 2008 election, has criticized Lugo for “wasting his time” with Brazil, perhaps realizing that any head-way in renegotiation efforts will only help the Lugo administration retain its support.

Nevertheless, Lugo’s other promises will be hard put to maintain if the current political structure remains. As the constitution forbids his reelection, Lugo has four years left to enact his policies. He recently has stated that he would run for reelection if the Paraguayan people supported him and agreed to consider a constitutional referendum that would allow him to run again. If Lugo can deliver, it is possible that Paraguayans would approve a constitutional referendum, much like the Ecuadorians, Bolivians and Venezuelans have done. But without a guaranteed second term, Lugo could alternatively pursue stronger executive initiatives, although his falling approval ratings pertaining to the current paternity scandal revolving around him might make that unrealistic. Regardless, any move to gain more executive power could scare many who still remember the brutal Stroessner dictatorship that ended in 1989.

It is not clear whether he really seeks to pursue this path, as this action will most likely be frowned upon domestically and even internationally, and Lugo will risk being lumped together with Venezuelan President, Hugo Chávez, and his left-leaning allies by die-hard rightist opportunists. However, April Howard states that supporters of the Lugo administration will try to continue backing it as they fear that the break up of the Lugo support base could be used by the ANR to regain control of the executive. “By supporting Lugo,” she stated, “they are supporting the democratic process, which is still fragile in Paraguay, and maintaining the opportunity to elect a future candidate who might be able to effectively address social changes.” Nevertheless, the breaking domestic scandals and the setbacks in domestic projects seem to be paralyzing Lugo. Without any bolder action, his government will increasingly be seen as a transitory regime, and possibly no more.

This analysis was prepared by COHA Research Associate Billy Lemus

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