Monday, June 25, 2012

Whither Paraguay?

I'm quoted in this AP story on Paraguay, and one of the things I mention is the fact that Fernando Lugo didn't rapidly receive popular support, such as occurred in Venezuela in 2002 and Honduras in 2009.  Lugo complained a bit but then just left. There were some protests on Sunday, and the Paraguayan press mentions newly formed groups that pledge to go to the streets throughout this week. So will there be large numbers and staying power?

As with Honduras, simply being in power gives the new government tremendous leverage. It just has to wait things out. Unseating Federico Franco will therefore take enormous pressure.


Justin Delacour 11:10 PM  

Paraguay's opponents of this maneuver will have to make their own choices about what to do at this point, but I personally don't think the practical objective of Paraguay's neighbors should be to unseat Federico Franco at this point. Everybody knows that the landed oligarchs-senators of Paraguay will scream bloody murder if others suggest that an impeachment that is technically within the bounds of the Paraguayan constitution must be overturned. Rather, a more practical objective would be to make the Paraguayan political establishment pay a significant price for what it did so that other legislatures in the region don't start thinking that this sort of maneuver might serve a useful purpose. I mean, let's be honest. The tiny Paraguayan market means diddly squat to Argentina and Brazil, whereas the Brazilian and Argentine markets mean quite a lot to Paraguay. I think the practical strategy is to just remove Paraguay's preferential access to its Mercosur partners' markets for a period of, say, two years. I'm sure there would be some political hurdles within the legislatures of Brazil, Argentina and Uruguay, but this seems to me to be a more realistic strategy than wasting one's time trying to force Paraguay's oligarchs-senators to restore Lugo through diplomacy.

Justin Delacour 11:50 PM  

Here's an interesting excerpt from a Financial Times report today:

Paraguay could be badly hit by Venezuela's decision to yank oil exports in protest at Lugo's ouster. Petropar is upbeat it has sufficient stocks to avert a supply crunch but Venezuela accounts for nearly a third of supplies, and Petropar already owes Venezuela's PDVSA $260m. Any fuel shortage would presumably increase the opposition to Franco's administration that Lugo is now seeking to rally.

Meanwhile, presidents from the Mercosur trade bloc meet on Friday in the Argentine wine capital, Mendoza. Lugo says he'll go too; Franco hasn't been invited.

One item on the agenda is applying anti-coup sanctions against Paraguay that could include removal of trade preferences or closing Paraguay's border – though Brazil could oppose that. But such sanctions could be very damaging to the small economy, which is already seeking to overcome a severe drought and an outbreak of foot-and-mouth disease.

Greg Weeks 7:10 AM  

This outcome could be even worse because it would punish the average Paraguayan while changing nothing.

Justin Delacour 7:47 PM  

I think you're wrong on two counts (and right on only one). A period of economic isolation of Paraguay would likely have the effect of discrediting the country's political establisment for having engaged in such a maneuver without having seriously considered the possible consequences. Secondly, it would serve as a lesson to the old political establishments of other Latin American countries that this sort of maneuver is costly. Thus, you can't credibly claim that economic punishment changes "nothing."

You can credibly claim that Paraguayans will suffer as a result of a period of economic isolation, but that's something that Paraguay's old political establishment should have thought about before putting its neighbors in the position of having to make some tough choices. In the long run, the precedent that the old political establishments of Latin America can just throw out democratically elected presidents on completely abitrary grounds with impunity is far more damaging to Latin American societies than whatever costs Paraguayans would have to bear as a result of being economically isolated for a period.

Justin Delacour 8:23 PM  

By the way, I notice that Lugo decided not to attend the upcoming UNASUR meeting, after previously saying that he would attend. I suspect one reason for that is that he doesn't want to be associated with the possible decisions that will be made to economically isolate Paraguay.

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