Latin America Advisor

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What Will Peña’s Presidency Bring to Paraguay?

Photo of Santiago Peña Santiago Peña, a conservative economist, overwhelmingly won Sunday’s presidential election in Paraguay, continuing the rule by the Colorado Party. // File Photo: Facebook Page of Santiago Peña.

Conservative economist Santiago Peña won Sunday’s presidential election in Paraguay, defeating center-left candidate Efraín Alegre by more than 15 percentage points and continuing the Colorado Party’s presidential rule. To what can Peña attribute his victory, and what does it mean for opposition rivals? What will be the main items on his agenda when he takes office in August, and what does his win mean for diplomatic ties with Taiwan? How effectively will Peña be able to work with the country’s Congress in order to get legislation passed?

Cordula Tibi Weber, research associate at the GIGA Institute for Latin American Studies in Hamburg, Germany: “Santiago Peña’s victory can be explained by three factors: first, the Colorado party has a support base of more than 2.5 million members and often clientelist links. Second, Efraín Alegre ran as the main opposition candidate for the third time. Being part of the political establishment, he couldn’t convince the electorate that he would bring the promised change. Third, Paraguayo Cubas, an anti-establishment, populist and right-wing candidate, got 22.9 percent of the vote. Many of those frustrated with the status quo voted for him, resulting in a strong loss for Alegre. When taking office, the main items on the new president’s agenda will be to stabilize the economy, stop tax evasion and alleviate poverty. Since 2018, the decade-long positive trend in poverty reduction has stopped. Peña’s main promise in this regard is the creation of 500,000 jobs. Contrary to Alegre, who was open to a switch to China to gain economic opportunities, diplomatic relations with Taiwan will be maintained under Peña’s government. Given that the United States in January sanctioned Peña’s political father, Horacio Cartes, for ‘rampant corruption,’ relations with Washington might become more difficult. In view of an absolute majority in both chambers of Congress, the probability that Peña will face obstacles in getting legislation passed appears to be low. However, potential problems might result from tensions between the two factions within his party, Honor Colorado and Fuerza Republicana, and from his lack of leadership over Colorados. He might depend on Cartes’ help to gain support for his politics, which would reduce his ability to govern.”

Brian Turner, professor and chair of the Department of Political Science at Randolph-Macon College in Ashland, Va.: “Peña’s victory shows that there was enough unity in the Colorado Party to use its resources and electioneering know-how to win by the biggest margin since the country’s transition to democracy. The key figure in the victory is Peña’s political patron, former President Horacio Cartes, whom the U.S. State Department declared ‘significantly corrupt.’ Alegre’s third straight loss will necessitate a leadership shake-up in the opposition parties that joined the Authentic Radical Liberal Party in an electoral coalition. The new ‘third place’ in Paraguayan politics is held by the National Crusade Party, led by populist Payo Cubas, who won 23 percent of the presidential vote. Previous ‘third place’ holders have largely disappeared from the political map, most notably former President Fernando Lugo’s leftist Guasú Front. A key item on the new administration’s agenda will be renegotiation of the Itaipú Treaty with Brazil. Nationalist pressure to negotiate a better deal will be intense. Paraguay will likely maintain its diplomatic ties with Taiwan, but that too may be subject to renegotiation given concerns that Paraguay is missing out on full access to the Chinese commodity market. The new Congress will be the first since 1998 in which the Colorados control majorities in both chambers. Nevertheless, Peña will need to manage the intense factionalism that characterizes the party to get legislation passed. This was the first national election in which voters could cast a ‘preferential vote’ for a candidate, and many candidates ran personal campaigns, unusual for Paraguay. That too may weaken party discipline in Congress.”

Barbara Ganson, professor of history at Florida Atlantic University: “While the new president-elect, 44-year-old Santiago Peña, offers a young face for the traditional Colorado Party, Peña served as minister of finance under then-President Horacio Cartes, who was associated with corruption as one of Paraguay’s richest men. Given the Colorado Party’s long association with corruption, there is little hope that socioeconomic conditions will improve, especially given inflation is currently at 6.4 percent. One cannot count out Peña’s future behavior, however, as a former one-time member of Paraguay’s Authentic Radical Liberal Party. Yet the general expectation is that not much will improve in one of South America’s poorest countries. With both congressional houses achieving a Colorado majority in Sunday’s election, nonetheless, there is always room for legislation to improve unemployment, infrastructure, health care, women’s rights, childcare and land reform, and also reduce crime. Peña’s campaign slogan, which promised to ‘make Paraguay better,’ is vague. A conservative economist trained at Columbia University, Peña will not be interested in raising taxes on Paraguay’s wealthy for social programs. With the hydroelectric Itaipú Treaty with Brazil expiring and negotiations to take place this year, there are new opportunities to transform Paraguay in a fundamental way. Since 1957, the Colorado Party has prided itself as a staunch supporter of Taiwan versus China, a key issue in this election. Paraguay gains much from its relationship with Taiwan. Paraguayan students study in Taiwan. Taiwan runs schools in Paraguay for Paraguayan children and built an engineering university. Taiwan has also provided both foreign aid and loans to Paraguay at very advantageous terms for several development projects.” 

R. Andrew Nickson, honorary reader in public management and Latin American studies at the University of Birmingham in England: “The scale of the Colorado victory, across the board, was a surprise, especially in view of the increase in poverty, rampant corruption scandals in the judiciary and a surge in narcotics-related violence that characterised the past few years. Several factors explain the result. Among them was the unexpectedly high 22.9 percent vote share of the third-ranked candidate, Paraguayo Cubas, a populist with extreme anti-democratic views. The media interests of former President Horacio Cartes strongly supported his candidacy, which proved extremely successful in splitting the opposition vote. Also, building on the deep-rooted nationalism and xenophobia in Paraguay’s political culture, Peña denounced U.S. sanctions against Cartes as an attack on the Colorado Party and unacceptable interference in domestic politics. Additionally, the party has pursued a strategy of converting thousands of jobs in ministries and other public sector bodies from ‘contracted’ posts without job stability into permanent posts. Furthermore, a major plank of Peña’s election campaign was a promise to create 500,000 new jobs, while at the same time adding that job selection in the public should be based as much on party affiliation as technical competence. There will be much soul-searching in the PLRA and left-wing Frente Guasú about the need to overcome the failure to construct a viable center-left opposition alliance that can attract voters away from the Colorado Party. Peña’s main agenda item should be the renegotiation of the Itaipú Treaty with Brazil. This was worryingly absent from the presidential campaign, and there is a real danger of yet another sell-out to Brazil. Taiwan will breathe a sigh of relief as Peña is committed to maintaining diplomatic relations. However, powerful business interests in soybean and meat production will continue to lobby for a switch to China. The Colorado Party has an absolute majority in both houses of Congress, but the party always splits into congressional factions. When this starts to happen after his honeymoon period ends, Peña will be at a great disadvantage in negotiating intra-party coalitions to get bills through Congress because of his lack of experience in navigating the complexity of Colorado Party politics.”


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