Tuesday, January 21, 2014

Paraguayan President Impeached and the Reverberations in Mercosur

article from June 28, 2012
By Jamie Douglas

Paraguay, a country that was long ruled by the iron fist of its dictators, the Alfredo Stroessner family, managed to slip into an uneasy kind of democracy a few years back subsequently electing the horny bishop who has fathered at least four illegitimate children, His Eminence Fernando Lugo.

But all that came to a screeching halt last week when he was “impeached” by Congress over a bloody shootout between landless peasants and the authorities that left 19 dead in total. His impeachment trial was a farce, with his side not being allowed to mount a defense. It basically was just a vote in the opposition Congress to get rid of him because, as a socialist, he had always taken the side of the poor, which rubbed the very wealthy elite of Asuncion the wrong way.

Paraguay, a founding member of Mercosur, suddenly found itself being chastised by its fellow members, Brazil, Argentina and Uruguay. They were also uninvited from the Mercosurial Presidential shindig to be held in Mendoza, Argentina, June 28-29. Lugo had initially announced that he would attend, but changed his mind because the new president would likely not let him go or not allow him back into the country.

While the leaders of South America, including Venezuela, expressed their outrage at the actions of the Paraguayan Congress, the United States of America is doing and saying nothing, probably wondering what country Paraguay belongs to. The State Department’s reaction is very similar to their initial reaction to the military coup in Honduras: nothing! The latest comments from Washington merely defer to future OAS actions and sanctions.

Meanwhile, with Paraguay’s suspension from Mercosur, business leaders in that landlocked nation are cheering for their leaving the flawed trade block altogether, going way back in history to the War of the Triple Alliance, where Brazil, Argentina and Uruguay banded together to carry out the extermination of almost 60% of Paraguay’s population. Old wounds to the national pride are still festering!

The fact of the matter is that, in spite of all the good intentions when Mercosur was formed in 1991, Brazil and Argentina have always treated the “junior members” of the alliance as their prostitutes, using their labor forces and resources for their own benefit, while at the same time (today) halting all imports from the small nations of Uruguay and Paraguay. To quote Paraguay’s head of the Industrial Union, Eduardo Felippo: 

 “Outside of Mercosur we will have greater options. We are going to develop our muscle to export to other countries, we are going to ensure that our trade partners in the future will be other countries, other continents and not our neighbors which whether we like it or not, were part of the Triple Alliance”

Best of luck, during these trying economic times.

Perhaps this would be a great time for Paraguay to renegotiate the agreements reached for selling electricity dirt cheap from the Itaipu Hydroelectric Plant, which supplies almost all of São Paulo’s energy, as well as a substantial amount of Argentinean electrical needs at a very unfair, low cost. Bringing the price of that energy up to market values would do a lot to bring much-needed foreign currency into the coffers of the impoverished nation, but it would also take on the risk of being invaded by the bully nations. As I have mentioned in previous articles, Argentina is charging Uruguay three times the cost of the electricity transmitted from Paraguay through its grid just for the use of it, in addition to Uruguay having to pay for the original cost of the energy it is buying. That is particularly harsh when there is a draught in Uruguay, as presently exists, limiting the tiny nation’s electricity generation from its own hydroelectric sources.

It is my opinion that for all practical purposes, Mercosur is useless. It might as well be just a customs union between Argentina and Brazil. But currently even those two nations are bickering over imports and exports with each other. The current summit in Mendoza may clarify things a bit, but I may just as easily be confusing many of the issues with multiple meaningless political grandstanding by Argentinean President Cristina Fernández de Kirchner and Brazil’s Dilma Rousseff.

Jamie Douglas
(Not) holding my breath in La Paloma

[Image of disposed Paraguayan President Fernando Lugo via Flickr]

I encourage you to write me at cruzansailor [at] gmail [dot] com with any questions or suggestions you may have. Disclaimer: I am not in any travel-related business. My advice is based on my own experiences and is free of charge (Donations welcome). It is always my pleasure to act as a beneficial counselor to those who are seekers of the next adventure.

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