Paraguay: Colorados returns to power
25 avril 2013
The Colorado’s return to power was expected. With the impeachment of former president Fernando Lugo and the wear on the Federico Franco government, of the PLRA, who succeeded Lugo, the tradition and structure of colorados in Paraguayan politics made the difference for Horácio Cartes, who is new to politics. Owner of 25 businesses, among which are a bank, a cigarette factory and a soft drink factory, aside from being president of Libertad (a soccer club), Cartes joined the Colorado Party in 2009, and was able to modify party statutes to launch himself as a candidate.
In the campaign, Cartes used his image as a successful businessman job creator to his advantage. Agriculture is the country’s main activity, but is not labor intensive and is dependent on the weather, which is unstable. Cartes’ ten point victory over the liberals can be explained by the Colorado Party apparatus, especially in the interior of the country; the last minute alliance between the Liberal Party with Oviedistas (sectors tied to fallen general Lino Oviedo), and possible votes from the left. This leftist support for the party created by dictator Alfredo Stroessner (1954-1989) can be explained by the Liberal Party’s actions in favor of the impeachment of Fernando Lugo, which were seen as a betrayal.
The Colorado Party’s return to power should facilitate Paraguay’s re-entry into Mercosur – the country was suspended from the South American bloc after the impeachment of Fernando Lugo. After taking office, one of the worries for Cartes’ government relates to Brazil. Months ago, current president Federico Franco commissioned a study from consultant Jeffrey Sachs that shows the following: Paraguay’s debt with Brazil regarding the bi-national hydroelectric dam, Itaipu, is already paid. In other words, Brazil would have to compensate Paraguay.
And more: the FMI predicts GDP growth of 11%, which means a greater need for energy to fuel the country’s industrialization. Today, Paraguay uses 5% of the half the energy it receives from Itaipu. The rest is passed on to Brazil as a subsidy. In 2012, electric energy consumption in Paraguay was 12 million mw/h. In 1994, it was 2.3 million mw/h. Aside from this, Cartes has said that he intends to use the good economy to diversify it, which means industrialization and energy consumption.