Brazil & Southern Cone - August 2011 (ISSN 1741-4431)

“Today we look back and we find [ourselves] with the pleasant surprise of a process that, despite not having been the one we dreamt of, is the one we knew how to undertake”, declared President Fernando Lugo of Paraguay during his 15 August State of the Nation address, which marked his third anniversary in power. Despite his lofty rhetoric, Lugo is living not a dream but something of a nightmare, for while the economy is booming, the president’s political future remains very unclear and his governing alliance has all but formally collapsed, two years ahead of the next  scheduled general election in 2013.

While the Lugo administration still has another 15 months to go before the pieces of the 2013 electoral puzzle fall into place, tensions between the more left-wing members of his own Alianza Patriótica para el Cambio (APC) and the Partido Liberal Radical Auténtico (PLRA), the main coalition partner, have come to dominate national politics [RBS-11-07]. Most recently, a debate over a possible constitutional reform to allow for presidential re-election got nowhere and indeed resulted in a criminal investigation into the alleged forgery of signatures in documents related to the process. All of which cost Lugo politically [WR-11-29].

This has taken away from the crucial political discussions that need to take place if Lugo is to deliver on some of the monumental campaign promises he made in 2008. Of these, land reform is possibly the most important, especially since illegal land seizures and occupations across the country have increased significantly in the past few months. But the president also has yet to address other pressing issues like a proposed institutional reform bill that has not even got as far as the national assembly. A bill to introduce a personal income tax has been discussed several times in both chambers of congress, but it has never received enough support, and at this stage it will probably be left to the next administration to take up.

Lugo, like his Chilean counterpart Sebastián Piñera, is suffering his lowest approval ratings to date since taking office. In the latest Ati Snead opinion poll, published by the local daily La Nación, 52.1% of respondents disapproved of Lugo’s administration, while 44.3% considered it “good” or “very good”. According to the survey, the main reason for dissatisfaction was the government’s inability to reduce poverty, unemployment or insecurity during its first three years in power.

Reasons to celebrate
Nonetheless, President Lugo has several achievements to celebrate, not least the country’s 14.5% real annual GDP growth rate in 2010 and his administration’s successful negotiations with Brazil to secure favourable changes to the founding treaty of the bi-national Itaipú hydro-electric dam [WR-11-20]. However, Lugo gave no details as to the discussions with Argentina to obtain permission to export Paraguayan electricity through the neighbouring country to Uruguay. The 15 August deadline set by Paraguayan authorities to receive a definitive answer from the Argentine government led by President Cristina Fernández came and went without any developments.

Lugo said that his government had extended state assistance to the number of extremely poor families to 120,000, up from 14,000 previously. He congratulated public hospital workers for the care they provide to the poorest Paraguayans. “We must concentrate on a single objective: uniting the country in social development. We will have time to confront each other at the ballot box”, he concluded.

• Soya tax
  Paraguay is the third largest exporter of soya in South America after Brazil and Argentina and President Lugo wants his government to benefit more from the sector’s economic boom. On 8 August he sent a bill to congress proposing an export tax of 6% on all soya shipments sent overseas. In his State of the Nation address, he celebrated agricultural producers saying: “To those who sow a quarter of a hectare with maize as well as those who sow hundreds of hectares of soya, and those who sell refreshing herbal remedies and the industrialists, to all, my most sincere gratitude”.