[NYTr] Why Paraguay Matters (COHA)
 
Date: Sat, 18 Aug 2007 15:05:01 -0500 (CDT)


Via NY Transfer News Collective  *  All the News that Doesn't Fit
 
Council on Economic Affairs - Aug 17, 2007
http://www.coha.org/2007/08/17/coha-backgrounder-on-us-paraguay-relations-why-paraguay-matters/

Why Paraguay Matters

COHA Backgrounder on U.S.-Paraguay Relations: 

by Research Associate Jenna Schaeffer and Research Fellow Alex SC!nchez 

As a landlocked country in South America and a nation whose
economy heavily depends on illicit smuggling activities, Paraguay
demonstrates a history of political instability, corruption and
painfully slow structural reforms. In recent years, it has attracted
more attention from the U.S. military due to the fact that parts of
Paraguay are covered by vast jungles that are almost impossible to
readily monitor. This makes the country a drug, contraband, and
possibly (according to some U.S. authorities), a terrorist haven. Most
notably, in a post 9/11 era in which the U.S. is fighting its bWar on
Terrorb throughout the region and the world, Paraguay is of
increasingly strategic importance. Although the quality of the
U.S-Paraguay bilateral relationship has been vacillating for many
monthsbsometimes cool, at other times warmbthe approaching April 2008
presidential elections in that country is of the utmost interest to
Washington. At stake is the legacy of the Colorado Party (PC), which
has ruled Paraguay for 60 years, much of it with violence and venality,
while having done next to nothing to curb the countrybs widespread
corruption nor guard its loosely monitored borders. The year 2008 has
the potential to be a monumental marker for Paraguay as well as for its
future political and military links to the U.S.

Duartebs Current Relationship with the U.S.

Despite an overall history of friendly ties with the U.S., Paraguayan
President Nicanor Duarte has recently begun to distance himself from
the Bush Administration, something that was hinted at in a meeting with
COHA personnel in Washington, as well as during a visit the president
made to the UN in New York a few days later, with both encounters
taking place during a trip that the Paraguayan leader made to the U.S.
in 2004. Several weeks ago, during a visit with COHA personnel in its
Washington Office, the former U.S. Ambassador to Paraguay Timothy
Towellbwho currently heads the Foreign Policy Group in
Washingtonbreferenced Duartebs traditional relationship with the U.S.
by saying, b[Duarte] knows how to play the Yankeesb&he plays shoulder to
shoulder with the U.S.b The ambassador added that the U.S. blovesb
Duarte because of his unfaltering cooperation in helping to counter
post-9/11 terrorism, most notably by facilitating the tracking of
Islamic extremist groups such as allegedly Hezbollah agents at the
confluence of the tri-border area of Paraguay, Argentina and Brazil.
However, Duarte just might be beginning to show his teeth to Washington.

On June 21, Duarte dedicated a biodiesel manufacturing plant in
Guarambare, Central Department, as part of an energy agreement with
Venezuela and Brazil that was initiated on May 4. This deal with
Venezuelan President Hugo ChC!vez and Brazilian President Luiz Inacio
Lula da Silva is based on an energy plan that is in line with what
Paraguayan officials see as part of the countrybs development needs,
and should represent notable savings to the economy. However, from the
viewpoint of the Bush Administration, the pact will be seen as a
disturbing act of Paraguayan solidarity with ChC!vez, an outspoken
critic of U.S. foreign policy.

The Lure of the Left

Paraguay, consistently has ranked as the most corrupt country in Latin
America by Transparency International. It has a gross national income
per capita of only $1,110, and subscribes to a policy of accepting aid
from any potential donor nation, including communist Cuba. In an
interview with COHA, Dr. Christian Maisch of American Universitybs,
School of International Service, observed that, b[t]he tragedy of
Paraguay is that it never has had a stable democratic system or a sound
economy.b This reality makes Paraguaybs institutions very vulnerable to
disruptions and causes the country to be overly dependent on external
aid. Duarte acknowledges that: bA lot of people do not like President
ChC!vez, but we are Paraguayans and do what is most convenient for us
and we are going to like those who help us. We cannot like those who do
not help us.b

Much to the U.S.bs dismay, Venezuela and Cuba have become close
political friends with Paraguay. Currently, Paraguay has 600 of its
youths studying medicine in Cuba through scholarships granted by the
Castro government and, if ChC!vez were to provide Paraguay with the
equivalent opportunity, Duarte would likely accept such an offer with
ease.

Of interest, the hemispherebs most powerful and wealthy nation has not
been so quick to be as generous. Duarte pointed out that the very
powerful U.S. President George W. Bush, called to question Duartebs
decision to educate some Paraguayans in Cuba. Duarte responded: bTell
me Mr. President, could you give us scholarships to Michigan,
Georgetown, or Chicago? Could you give me 600 scholarships for young
Paraguayans today?b Paraguay is a nation that needs external assistance
and if it does not come from Washington, it is perfectly willing, on
the basis of pragmatism, to look elsewhere. Furthermore, Duarte accused
the U.S. Congress of sabotage because it did not approve credits to
Paraguay. At the same time, he condemned U.S. capitalism, stating: bIt
is the most savage capitalism that raves about profit without caring
about social responsibility and often not even caring about fiscal
responsibility.b

With the Paraguayan presidential elections less than a year away,
Duarte may be trying to strengthen support for the Coloradobs social
justice record by aligning his foreign policy more with his
left-leaning Latin American neighbors than with the U.S., because that
is where the most help can be found.

Deteriorating Relations

In recent months, President Duarte has made many more favorable
comments towards President ChC!vez than he has toward President Bush. In
a March interview with the German Channel 2 Program bThe Keys of the
Week,b Duarte defended the ChC!vez government, affirming the Paraguayan
leaderbs belief that Venezuela has an boverdose of democracy.b The
Paraguayan president further added that he will believe in George W.
Bush when the U.S. eliminates the trade barriers imposed on less
developed countries. In addition, Duarte defended Bolivian President
Evo Morales and even supported his announcement concerning arms
purchases, which one would think would rattle AsunciC3n because of the
historical bad blood between the two countries. Duartebs normally
friendly relationship with the White House began to deteriorate over
the past six months.

According to Duartebs Chief of Staff, this slide was partly a result of
a disappointing lack of technology transfer, trade barrier elimination
and a lack of respect toward Paraguayans wanting to visit the U.S. For
these reasons, the presidential candidacy of former bishop Fernando
Lugo Mendez in the April 2008 election, who is closely associated with
the ideals of liberation theology and his cordial feelings toward
ChC!vez, would not be too drastic a shift from existing Paraguay foreign
policy. However, the possibility that a populist candidate who leads a
large bandwagon of indigenous followers can defeat the Colorados after
60 years of continuous rule is a scary thought to a number of political
leaders in both Paraguay and the U.S. b mostly because so many unknowns
are involved in Lugobs candidacy.

The Lugo Candidacy Unfolds

Although President Duarte is backing former education minister Blanca
Ovelar, representing the Colorado Party, in the upcoming elections, she
is not the candidate receiving the greatest publicity. Stealing the
spotlight is Lugo, known to his supporters as the bBishop of the Poor.b
Although he has not announced his precise presidential platform, Lugo
has said that his recent travels have made public his peoplebs desire
for agrarian reform, industrial action and higher employment. His
upstart campaign continues to gain significant organizational support
and on July 17, a majority faction of the opposition coalition,
ConcertaciC3n Nacional, nominated Lugo as its candidate for the April
2008 election. bWe considerb&it is the right moment to define the
presidential ticket,b Senator Carlos Filizzola, of the Partido PaC-s
Solidario (PPS) said, announcing Lugobs nomination. The ConcertaciC3n is
made up of eight political parties that are united around the common
goal of ending the rule by the tainted Colorados. However, two major
ConcertaciC3n members, Pedro Fadulbs Partido Patria Querida (PPQ) and
ex-general Lino Oviedobs UniC3n Nacional C	ticos (Unance) b respectively
the third and fourth largest electoral forces in the countrybhave
declared Lugobs nomination billegitimateb and bhasty.b

General Oviedo, meanwhile, is serving a 10-year prison sentence for an
attempted coup against former President Juan Carlos Wasmosy that was
staged in 1996. Oveido has reason to hope that he will be released from
jail in time to compete against Lugo for the ConcertaciC3nbs leadership
as there have been reports of an alleged scheme by President Duarte to
attempt to drive a wedge between ConcertaciC3n supporters. However, the
Paraguayan press has suggested that Oveidobs early release would be
nothing less than an act of political expedience for the Colorados. At
the same time, even a conditional release of Oveido would be viewed as
hardly an edifying political maneuver which could only undermine
Paraguaybs history of tainted democratic institutions (though this
would not be an unprecedented move in Paraguaybs history of corrupt
politics). General Oviedo announced on July 20 that he would support
Lugo in the presidential elections if he himself cannot stand as
presidential candidate for the opposition bloc. According to Colonel
Carlos Liseras, the president of Oviedobs military tribunal, the court
will announce whether the ex-general is due conditional freedom bin two
months time.b

In the meantime, the pro-Lugo ConcertaciC3n members agreed last month to
accept a running mate from the Authentic Radical Liberals, the nationbs
second largest party, which has spent decades challenging Colorado rule
to no avail, but could still help finance and help mount a nationwide
campaign. Lugo currently leads in the opinion polls with more than 60
percent approval ratings. Nonetheless, several smaller opposition
parties still have not indicated whether they would unite behind Lugo,
and his bid as well could be derailed in the courts as Paraguaybs
constitution bans members of the clergy from seeking political office,
even though Lugo formally resigned his position in 2005. Duarte has yet
to file a legal challenge, which must be declared before a November 28
registration deadline, but it has been noted that the president has
repeatedly criticized Lugo in the recent past. Additionally, both PPQ
and Unance maintain they will remain part of the ConcertaciC3n for the
moment while they search for a consensus ticket with which to take on
the Colorados.

The U.S.b Preferred Candidate

In his recent June trip to Washington, Lugo assured the State
Department that he is not like Venezuelan President Hugo ChC!vez,
because he, unlike ChC!vez, is a religious man. Lugo said, bI am not of
the left, nor of the right. Ibm in the middle as a candidate sought by
my people.b Paraguayan political analyst Alcibiades Gonzales Delvalle
also characterizes Lugo as a moderate b more of pragmatist than an
ideologue. Lugo resists ideological labels, saying, for example, that
he embraces bsocially responsibleb capitalism. Since launching his
campaign, he has visited Cuba, Argentina, the U.S. and Spain to raise
his profile and also to meet with Paraguayan immigrants abroad and to
seek campaign donations. According to Ambassador Towell, the election
of Lugo as President of Paraguay bcould be fun.b Although it is early
in the race, Lugobs seemingly middle-of-the-road stance should be a
good opportunity for the U.S. to improve staggering political and
military ties with Paraguay, if it is so-minded and sufficiently
focused.

Paraguaybs Geo-strategic Importance

The U.S. has vested a long-time interest in Paraguay. This is largely
because the country is in the tri-border region, along with Brazil and
Argentina. This area is known to be a major transshipment point for
drugs, contraband and a place where criminal organizations have
flourished. There also have been many rumors that Islamic extremist
groups and institutions are located there; however, it is unclear to
what extent Hezbollah and other such organizations actually have
operational headquarters there for strategizing and implementing their
terrorist campaigns elsewhere, or if they are merely locations from
which to obtain funds to remit to onebs family back home or to onebs
favorite Middle East madrass. In addition, with Evo Moralesb somewhat
anti-U.S. regime in power in Bolivia, it seems that Paraguay in the
near future may again even more importance from Washingtonbs
geo-strategic point of view, if it hopes to meaningfully
counter-balance the leftward shift in the region.

A factor that Washington may try to utilize to promote close ties with
Paraguay could be that the U.S. has been a friend of AsunciC3n for a
long time while the same could not be said of the Bolivians, who have
had strained relations with its neighbor ever since the Chaco War in
the 1930s. That conflict eventually saw AsunciC3n emerge as the victor,
which La Paz has neither forgiven nor forgotten. Bolivia, under Evo
Morales, has attempted to emphasize its relationship with Venezuela
rather than Paraguay, and the Bolivian leader has picked up on ChC!vezb
geopolitical strategy, culminating with last yearbs decision to build a
number of bases along the lengthy borders. Bolivian Army Commander
General Freddy Bersatti has declared that these are not bases between
the two countries, but rather bborder modules.b

Building Bases

One of the proposed border bases affecting Paraguay, will be at Puerto
Quijarro, located 200 kilometers away from Paraguaybs Bahia Negra.
Added to the difficult terrain in that part of the country, there are a
number of rivers flowing across the border. As a Peruvian intelligence
officer interviewed by COHA observed, bIn the jungle, the rivers are
like roads,b meaning that Bolivian troops could be sent to the border
with Paraguay, if necessary and without too much difficulty. An October
11, 2006 article in El Mundo by Ramy Wurgaft, observed that the new
Bolivian base will also be close to Mariscal Estibarriaga, where,
according to rumors, the U.S. wants to build a base of its own, perhaps
to preside over the Guarani Aquafier, the biggest underground reserve
of agua dulce in the world. The Paraguayan military is not particularly
formidable, hence it probably makes some sense to consider allying
itself with the U.S. in the area against a Venezuela-backed Bolivia,
than to spend tens of millions of dollars on upgrading its military
from almost zero. The outcome of the upcoming presidential elections
will undoubtedly influence the development of all of these
relationships.

Tri-Border Area

The tri-border region is rumored to be full of a variety of criminal
cartels and ideological causes which could be taking advantage of the
lack of even low-level of international integration among the regionbs
law enforcement agencies and security forces, as well as the
traditional massive corruption in Paraguay that has facilitated the
countrybs national hobby: contraband. Washington is unclear at the
present time if there are terrorist cells in the tri-border region, but
it does suspect that Lebanese and other Arab residents in that region
of the country are sending remittances back to groups and Madrassas
linked to terrorist activities (namely Hezbollah) in the Middle East.
For example, an August 25, 2006 article in The Washington Times
explains that Assad Barakat, the owner of a shopping center in the
Paraguayan border city of Ciudad del Este, had been jailed on charges
of laundering $2.5 million that helped financed the 1994 bomb attack on
the Argentine-Israeli Mutual Association. Even if the presence of
Islamic extremist groups is not as widespread in the area as is
commonly perceived, it is well known that there is an extensive amount
of smuggling occurring in the region, a trademark of Paraguaybs long
history of lawlessness. As Dr. Maisch explains, bParaguay is a
smuggling paradise,b and it seems clear that AsunciC3n is unable, or
unwilling, to confront the countrybs historical cancer.

A final reason why the Paraguayan government may simply prefer to
accept a U.S. military presence rather than attempt a protracted as
well as expansive upgrading of its own military to protect the
countrybs borders is the historical fear of giving the armed forces too
much power. Paraguay has an abundant history of military coups, most
notably that of General Alfredo Stroessnerbs in 1954, which founded his
military regime that for decades has ruled by means of the Colorado
party, and the failed coup by General Lino Oviedo in 1996, which ended
in the assassination of then Vice President Luis Maria Argana. Viewed
from this perspective, it would be more reasonable for any civilian
government to resort to a major outside power for protection, as
internal forces have often proven to be the most worrisome factors in
the past. Should Oviedo be released from jail and elected president,
civilian-military relations will probably remain cordialbeven though
there may be some tension between the militarybs high command and
Oviedo over ideological differences, as well as who supported as well
as who opposed Oviedo in his attempted coup in 1996. Should Lugo be
elected, it is unknown whether he will challenge the militarybs power
and longstanding control over parts of Paraguay, like some areas to be
found in Chaco.

The U.S. Military Presence and Paraguay

There has been a good deal of speculation over the nature of the U.S.
military presence currently in Paraguay. After the withdrawal of most
American forces from the Panama Canal Zone in the late 1990s,
Washington switched to a new strategy of creating small Forward
Operation Location (FOL) bases throughout the region, as exemplified by
the Palmerola facility in Honduras, Manta in Ecuador and another
location in Aruba. Regarding Paraguay, in the summer of 2005, the
American military began a series of joint military exercises with
Paraguayan forces. These 13 military maneuvers lasted from July 2005
until December 2006. Washington repeatedly insisted that this did not
mean a permanent base would be built in the county. An article on the
State Departmentbs website explains that: bthese short, time-limited
exercises have been mischaracterized as a long-term stationing of U.S.
troops in Paraguay. This is not true, nor are the military exercises
stages in Paraguayan authority new. Paraguay and the United States have
been routinely conducting such bilateral military exercises since 1943.
For the 2005-2006 series of exercises, small numbers of U.S.
personnelbgenerally 10- to 20-member units at a timebwill train with
their Paraguayan counterparts for periods of two to six weeks. No U.S.
soldiers will be deployed for an extended period of time, and under no
circumstances will there be more than a few dozen U.S. service members
in Paraguay for longer than 45 days.b

After the series of exercises formally ended, Washington turned to
another way of projecting a military presence in the country, namely
constructing military infrastructure for the Paraguayan armed forces.
The current facility in question is an airport being built at Mariscal
Estigarribia. For several years, there has been discussion about who
originally played the major role in erecting the airport in the late
1970s and early 1980s. Some claim it was the American military which
built it, but the State Department claims it was the Paraguayans. Most
recently, American troops have expanded the airportbs facilities,
building new hangars and other structures, stoking the widely
circulated idea that the U.S. will enter an ongoing military presence
in the country. Nevertheless, the State Department has insisted that
the airport is not an American base, and would be unsuitable for
Americabs military in any case, as the runway is too narrow for the
largest American aircraft, such as B-52 bombers, making for a somewhat
lame argument.

Other forms of military cooperation and joint-military training
exercises also have taken place. Earlier this year, Paraguayan
paratroopers, along with forces of several Central American and South
American nations, trained with their American counterparts at the Soto
Cano base in Honduras. This was part of the annual airborne exercise
Iguana Voladora, which was held this year at Soto Cano from April 29
through May 4.

Analyzing Security Relations and Interests

Cooperation between Washington and AsunciC3n may be tense, at least for
the short term. The U.S. proposal to send military troops to Paraguay
is meeting resistance from the Duarte administration and the nationbs
Congress. In response, the U.S. has even suspended military and
economic aid to Paraguay as a result of Asuncionbs refusal to grant
permanent immunity to uniformed U.S. military personnel in accordance
with the Rome Statute. Should Lugo be elected, relations may be
strained as the former bishop could potentially decide to uphold the
Rome Statute. This pact refers to the right of the International
Criminal Court (ICC) to try individuals for the most serious offences
of concern to the international community, such as genocide, war crimes
and crimes against humanity. The ICC was originally agreed upon by 160
members of the United Nations on July 17, 1998. The U.S. repeatedly has
opposed the Statute and the creation of the ICC. A major reason for not
supporting its adoption stems from the refusal of the international
community to grant the United Nations Security Council (of which the
USA is a veto holding permanent member) control over which cases the
Court considered, instead favoring an independent Prosecutor
whobsubject to all safeguards and fair trial guaranteesbwould make such
decisions. Washington is currently approaching governments around the
world and asking them to enter into what many consider illegal impunity
agreements. These would provide that a government will not surrender or
transfer US nationals accused of genocide, crimes against humanity or
war crimes to the ICC, if requested by the Court.

Nevertheless, it seems likely that some kind of arrangement will have
to be worked out in regards to an American military presence in
Paraguay. After the 9/11 attacks, Washington sees any setting with a
significant Arab population and with known connections to radical
Islamic groups as a region of interest to its intelligence and security
assets. The tri-border is a textbook case of this. Whether it is Lugo,
Oviedo, Ovelar or another political figure, Washington will have to be
prepared to work with the next Paraguayan president in order to have
free access to monitoring the tri-border area, if it continues to be an
area of concern.

Other Presidential Candidates

Even though the Paraguayan presidential elections are still several
months away, there already exists a significant list of candidates
other than Lugo. It is unclear whether any of them will be able to
overtake Lugo in the polls as the election draws nearer and
presidential campaign speeches begin to be heard.

The Status of the Presidential Elections

In regards to the present campaign season, there have been two
significant developments. One issue is that former education minister
Blanca Ovelar, the Coloradosb candidate to be Duartebs successor, is
now far back in the polls. This development can be seen from two
different perspectives: one is that while there has been a
proliferation of female candidates contesting presidential elections
throughout Latin America in recent years, with mixed results: Michelle
Bachelet won in Chile, Cristina FernC!ndez de Kirchner is running a
strong campaign in Argentina, while Nobel Prize winner Rigoberta MenchC:
badly falters in Guatemala, and Lourdes Flores lost in Peru in the 2006
presidential elections. Will the Colorado candidate be able to rally
the support of Paraguayan women? Also, with Ovelar now falling behind
in the polls, the continuation of Colorado rule after six decades in
power seems to be in serious jeopardy. Colorado leaders must be aware
that the last decade has seen the end of rule by traditional parties
throughout the hemisphere, including the PRI in Mexico and Copei and AD
in Venezuela. With a year to go, the question remains whether there
will be a change of heart among the Colorado leadership to consider
supporting another candidate, or whether Ovelar b unlikely enough b
will be able to improve her standing as the months go by?

Finally, reports indicate that Lino Oviedo actually is beginning to
register in the polls with some backing, even if he has not been
released from jail and is unable to formally run for president. If his
contingent statement that he could support Lugo holds true, the
ex-bishopbs chances to become the countrybs new president will greatly
increase. In his interview with COHA, Ambassador Towell explained that
Oviedo is the one candidate that could be an effective threat to Lugo.
It remains to be seen what events will gestate in the coming months, if
Oviedo gains his freedom, the whole electoral picture could change.

2008 Is Not Far Away

Even though the presidential elections will only take place in 2008,
there is a growing sense of excitement within Paraguay over their
possible outcome. The possibility that Colorado rule may finally be
coming to an end either at the hands of Fernando Lugo or, even more
bizarre, due to Lino Oviedo, is an issue whose importance throughout
South America cannot be underestimated.

In addition, regional developments will also prove of importance. These
could include like Moralesb rule in Bolivia and Correabs in Ecuador and
how this affect La Pazbs regional relations. Also germane will be the
nature of future American military presence will end up being in
Paraguay, which is tied to the extent of Islamic extremist movements
that could be found in the tri-border area. All of these issues should
keep Paraguay on the radar of Washington policymakers into the future.
Paraguayans deserve to live in a corruption- and smuggling-free
society; however, both activities have become ingrained throughout
their modern history, severely crippling Paraguaybs economic and
political development. The next Paraguayan president will not only have
to possibly face recent issues like Islamic extremism in the tri-
border area, but also the countrybs endemic problems of corruption and
economic destitution. The magnitude of these issues makes it clear
that, for Paraguaybs sake, the next president will need God on his side.

 
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