Despite Conservative Victory, Paraguay’s Presidential Elections Signal Growing Discontent

The status quo party is headed back to the top office, but exhaustion of the country’s development model spells shifting geopolitical relations and an uncertain political future.

May 31, 2023

Santiago Peña from the conservative and long-dominant Colorado Party was elected on April 29. (Wikimedia Commons / Francarballopy / CC BY-SA 4.0)

On April 29, Santiago Peña won the election to be Paraguay’s next president. On the one hand, Peña’s win was unsurprising, given that the Colorado Party he ran with has held the presidency for 72 of the last 76 years. On the other, however, closer scrutiny of the election shines light on key tensions defining the country that call for explanations of repeat Colorado party rule that go beyond mere voter apathy.

Many analysts have written off the recent presidential election as the expected result in a context where corruption and political patronage are said to rule contemporary politics. Indeed, scholars and independent media have documented the complex political patronage machine that drives repeat Colorado Party victories as well as the prevalence of vote buying to ensure voter turnout. Yet the months preceding Peña’s win and immediately following tell a more complex story about the rifts and aspirations that will reshape the country in the next decade.

The Colorado Party ultimately won the 2023 election. Yet, the success of the second- and third-place candidates, Efraín Alegre and Paraguayo “Payo” Cubas, signals broad social discontent with the Colorado platform and the significant challenges that Peña will face upon taking office. The election shows that Paraguay is at an inflection point where social, political, and environmental pressures intersect in ways that are changing the country’s regional significance.

The Colorado Party Won, Again

Founded in 1887, the Asociación Nacional Republicana (ANR or Colorado Party) is Paraguay’s largest political party by affiliation and by far the most influential. The Colorados have held the presidency and majorities in the Chamber of Deputies and Senate virtually without interruption since 1947. The only successful challenge to Colorado control came in 2008, when former bishop Fernando Lugo and his coalition won the presidency. However, in 2012, a year before the end of his five-year term, Lugo was forced from power by a rushed legal process that many describe as a parliamentary coup. The Colorado Party is socially conservative, promoting some of Latin America’s toughest anti-abortion and LGBTQIA+ policies, and fiscally liberal, maintaining some of the strongest and most consistent macroeconomic conditions in the region.

Despite the Colorado Party’s sustained political control, the party is not a homogenous front. This year’s election brought those differences to light. President-elect Santiago Peña hails from the conservative majority wing that is aligned with former president Horacio Cartes (2013-2018). Peña served as Finance Minister (2015-2017) during Cartes’s administration and gained his support at that time. Peña’s first attempt to secure the Colorado Party nomination failed to current president Mario Abdo Benítez, whose term ends in August. During the nomination process, Abdo’s wing of the ANR, Colorado Añetete, sought to distance itself from Cartes’s influence and supported Arnaldo Wiens, Abdo’s former minister of public works and communications, as the potential nominee instead of Peña.

Polling during the months leading up to the election suggested that the Colorado win was not certain. Efraín Alegre and his vice-presidential running mate Soledad Núñez Mendez posed a real threat to Peña’s path. Running on a more progressive campaign, Alegre and Núñez promised to shift key geopolitical relations, particularly Paraguay’s relationship with China, to drive greater exports. However, a third-party outlier candidate appeared late in the race. Paraguayo “Payo” Cubas Colomés, a lawyer and former senator, launched a populist campaign that spoke directly to marginalized urban and rural populations by attacking entrenched inequity that many associate with longstanding Colorado rule.

Cubas’s campaign surprised nearly all observers when he carried 23 percent of the votes on election day, splitting the vote and leaving Alegre with only 27 percent. Peña won with 43 percent. The candidate with the most votes wins in Paraguay; there is no runoff as in many other countries in the region. Following the election, Cubas and his supporters alleged widespread fraud without significant evidence and mobilized protests across the country that resulted in Cubas being arrested on charges of inciting public unrest.

Debating Development

The 2023 election and the major issues each candidate discussed highlight important social and economic trends that are not going away anytime soon. Paraguay has long been known for extreme land inequality, a legacy of the U.S.-supported dictatorship led by Alfredo Stroessner (1954-1989). That legacy is directly related to the political patronage system that helps Stroessner’s Colorado Party maintain power.

Unequal land ownership also supports the country’s two primary economic activities: export-oriented cattle ranching and soybean farming. Paraguay is currently the third greatest exporter of soybeans and often in the top ten of beef by tonnage globally. The establishment of each industry has been extensively studied, with negative impacts on Indigenous rights and campesino livelihoods. The importance and impacts of these industries not only enabled Cubas’s populist discourse to take hold with many disaffected younger voters, but also brought Paraguay’s geopolitical relations into question.

Paraguay is the only country in South America and one of only 14 countries globally to maintain diplomatic ties with Taiwan. A key point of Alegre’s campaign was to build direct relations with China to appease soybean and cattle producers’ interests in exporting their goods to Chinese markets. By contrast, Peña rejected the notion of severing the country’s 60-year old ties with Taiwan. Given China’s growing role in Latin America, why does Paraguay maintain its relationship with Taiwan? What might the Paraguay-Taiwan relationship have to do with longstanding U.S. support for Paraguay?

Current reporting does not delve into possible U.S. influence over Paraguay regarding Taiwan. But there is growing political pressure within Paraguay to change the terms of that relationship, either severing diplomatic relations or requiring that Taiwan provide greater development aid. The Nicaraguan government made similar demands before severing relations in 2021. Since his election, Peña has affirmed his commitment to Taiwan. But the influential ranching organization Asociación Rural del Paraguay has made it clear they want to export to Chinese markets.

Much closer to home, the world’s second-largest power generating hydroelectric dam, Itaipú, also played an outsized role in the recent elections. Constructed between 1975 and 1982, the Itaipú dam has generated more power than any other in history and is only outsized by China’s Three Gorges Dam complex. A key component of the binational treaty with Brazil that governs the sale of the power that the dam generates expires in August 2023. Thus, the two countries are locked in closed-door negotiations over the future of the energy allocations and pricing.

Upon signing the Itaipu Treaty nearly 50 years ago, Paraguay agreed to exclusively sell power to Brazil at below market rates. The terms of the agreement are a source of geopolitical tension, and many Paraguayans view the relation as exploitative and a detriment to national growth. On the campaign trail, Alegre vocally supported negotiations to significantly alter the relation with Brazil over Itaipú, whereas Peña was largely silent on the matter. Many analysts suggest that the Peña administration will likely advocate for terms more favorable to Paraguay without taking as aggressive a position as Alegre or Cubas proposed.

Within Paraguay’s borders, other development-related processes have shaken up political dynamics and point to significant challenges moving forward. Drug trafficking and contraband smuggling are not new to Paraguay. Yet a major anti-narcotics and money laundering investigation called Operation A Ultranza sparked political fallout in 2022 when members of several leading political parties were imputed for high crimes. Just months after Operation A Ultranza launched, the leading Paraguayan prosecutor responsible for the investigation, Marcelo Pecci, was murdered while on honeymoon in Colombia as retribution for his role.

In the wake of A Ultranza, the new U.S. Ambassador to Paraguay, Marc Ostfield, sought to demonstrate the U.S. resolve to combat money laundering and drug trafficking. Ostfield named former President Horacio Cartes, current Vice President Hugo Velázquez Moreno, and others as involved in “significant corruption.” Cartes and several of his immediate family members’ U.S. visas were nullified and his assets frozen, among other sanctions. Velázquez Moreno dropped his planned run for president as a result of the U.S. designation. Although money laundering is not new in Paraguay, these Embassy actions are unusual, signaling growing U.S. impatience with organized crime in the region.

What Lies Ahead?

Peña, who enters office August 15, will immediately contend with these challenges, to say nothing of the growing social unrest as economic and political inequality grow each year. The country’s reliance on agro-exports for macroeconomic growth will likely be strained as the effects of rapid deforestation in the Chaco region and social-environmental challenges posed by climate change will levy uncertain taxes on the agricultural sector. These dynamics may force Paraguay’s hand on China and are likely influencing ongoing Annex C negotiations that set energy prices for power generated by Itaipú and possible future development pathways that more energy sovereignty would enable.

These challenges intersect with growing public acceptance of the Stroessner dictatorship. Former president Cartes established many of his contraband and financial services operations during the dictatorship. Outgoing president Abdo’s father was Stroessner’s personal secretary. In a post-election interview, Peña described the Stroessner era as displaying a mere “deficit” in human rights, arguing that it was ultimately positive for Paraguay. The whitewash of Storessner’s brutal regime is alarming on its own, but it also dovetails with Cubas’s calls for a return to dictatorship to ensure greater security and employment across the country.

Rather than address the structural inequities driving insecurity, many political leaders—including the president-elect—are dangerously flirting with authoritarian ideals in one of Latin America’s youngest democracies.

Joel Correia is assistant professor in the Human Dimensions of Natural Resources Department at Colorado State University and author of Disrupting the Patrón: Indigenous Land Rights and the Fight for Environmental Justice in Paraguay’s Chaco.

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