Highlights
– Unknown political player, former bishop Fernando Lugo, defeats ruling party candidate Blanca Ovelar
– Energy sovereignty will be first and most important issue on Lugo’s presidential agenda
– Limited by holding a minority in Congress, Lugo’s initial reforms will remain moderate
On April 20, 2008, Fernando Lugo defeated Blanca Ovelar of the ruling Colorado Party for the presidency. Lugo’s win brought an end to six decades of government control by the Colorado Party, which was viewed as largely ineffective and corrupt by the public. Citizens have applauded Ovelar’s defeat as the beginning of a wave of change for Paraguay; however, Lugo’s lack of political experience, which allowed him to campaign as an outsider, may hinder his ability to push through substantial reform.
As his backing coalition is comprised of many political parties with a range of leanings, it is likely any reform during Lugo’s five-year term will be moderate at best.
The Results Are In
Lugo won 41 percent of vote, ten points higher than Ovelar’s results. This result illustrates a major push for change by Paraguay citizens, as the ruling Colorado Party has held office for over 60 years. Known for its anti-communist dictatorship, General Alfredo Stroessner ran the country for over 35 years before being ousted in 1989. His Colorado Party has maintained control ever since.
Lugo, who will take office officially on August 15, 2008 for a single five-year term, represents a newcomer to the political scene in Paraguay. A former clergyman who renounced his religious position in December 2006 to enter politics, Lugo campaigned as a “bishop of the poor,” and has pledged to spread the benefits of recent economic growth to the masses. While endorsing Liberation Theology, a doctrine criticized by the Vatican for Marxist influence, Lugo appears to be more moderate than other leftist leaders in Latin America.
Vow to Increase Energy Sovereignty
One of Lugo’s largest campaign issues was his promise to renegotiate energy treaties with neighboring Brazil and Argentina. When he takes office in August 2008, Lugo plans to dedicate his first week to initiating discussions over the sharing and selling of energy generated at the Itaipu and Yacyreta dams. While it is important to maintain friendly relations with both countries, Lugo believes that the treaties signed in the 1970s are “unjust” and cheat the Paraguayan people out of millions of dollars per year.
Internal debate will be fierce over the issue of the Itaipu dam and will likely become a determinant used by critics to predict how his leadership will progress. Brazil and Paraguay currently maintain joint ownership of the hydroelectric dam, but as Paraguay uses only a fraction of its portion, the unused shares are bought by Brazil. Lugo claims the shares are being sold at rates well below market price, but Brazilian President Luiz Inácio Lula da Silva has indicated that he will not renegotiate the current treaty.
Despite Lugo’s claim to take the issue to the International Court of Justice (ICC), he will likely try and settle any dispute directly with neighboring leaders. Further, Lugo will likely avoid radical decisions, such as imposing a unilateral price increase, as Brazil remains Paraguay’s sole customer for energy. Lugo will be forced to balance a thin line between pushing for action to appease the Paraguayan citizens, while at the same time ensuring the nation does not become isolated from two of its largest energy customers.
Future Outlook
Energy sovereignty is one of many areas in which Paraguay citizens are looking to Lugo for change. The grace period given to new presidents will likely be short for Lugo, as the ending of the Colorado Party’s claim over the presidency has led the public to set high expectations for Lugo’s rule. However, the Colorado Party still maintains the majority in the legislation over Lugo’s coalition parties, so it is to be expected that any wide-ranging changes Lugo proposes will be limited. The varied opinions internally among the coalition parties will force Lugo’s outward decisions to remain moderate.
Lugo will be forced to work hard for change to satisfy the public, who may become frustrated easily if drastic improvements are not seen immediately. He will likely use the energy debate with Brazil and Argentina to garner nationalist support, but the issue will remain limited largely to rhetoric in the near-term.
However, small reforms are more likely to be implemented domestically, within areas such as the agriculture industry, as these are issues that could ultimately be passed through Congress.
