Paraguay’s president-elect Fernando Lugo outlines his five-year strategy, which includes fighting poverty and resolving the Itaipú issue. By Hugh O’Shaughnessy.

“Business – the banks and the rest – must realise that poverty is not a good ally to have,” says Fernando Armindo Lugo, president-elect of Paraguay, where half the population lives in poverty or extreme poverty, according to the UN. “When you live together, poverty is a threat. Richer people now have to work with the rest to defeat poverty, to take their part in the slow and, at times, painful process of eradicating poverty. In the end, we will all be better off”.

Mr Lugo won a striking victory in April’s presidential elections. With 42% of the votes, he defeated the candidate of one of the traditional political parties, the Colorados (or Reds), which has been in uninterrupted power for the past 61 years but only won 32% of the votes. To do that, he had to lay down his responsibilities as the bishop of the unprepossessing diocese of San Pedro.

Against the opposition of some in the Vatican, he achieved that and, despite possessing no electoral vehicle himself, he fashioned a broad coalition, the Patriotic Alliance for Change. He was capitalising on the general conviction that change was what the country needed. The Colorados were an obvious anomaly in the 21st century. The majority of Paraguayans felt that an end had to be put to the concentration of wealth while business, local and ­foreign, thought that the traditional cronyism and corruption had to go.

Strategy map

Sitting in his temporary office, a former bank building in the heart of Asunción, Mr Lugo quietly maps out his strategy for his five-year term, which starts on August 15. “When my term is over, we’ll see a country with international credibility. A more serious country, where laws and the constitution can be respected and where agreements can be put into force. Corruption, especially state corruption, will be reduced,” he says.

“We’re seeking a much fairer system of economic growth. We don’t want a tiny sector of society monopolising the profits generated in the country.”

He does not forget the agricultural sector, where the best land is concentrated in very few hands. “We’ll start – though we may not finish – a genuine agrarian reform,” he says.

Solution for Itaipú

One of the principal problems that the incoming president has promised to tackle is the Itaipú question. What until recently was the world’s largest hydroelectric scheme was built as a joint venture with Brazil across the Paraná River, the boundary between the two countries. With Paraguay taking only a tiny part of its power potential, no more than 4%, 96% goes to Brazil.

In this era of power shortages, the Paraguayans have repeatedly said that the price was much too low. A higher price could make a vast difference to government income. But Mr Lugo expresses confidence in the outcome of negotiations.

“President [Luiz Inácio] Lula [da Silva] of Brazil has shown himself open to discussion about our concerns about Itaipú,” he says. “Talks are scheduled and that fact means that everyone agrees there’s a difficulty. We can sit around a table and agree on something better, both for Brazil and for Paraguay.”

Could Paraguay use its share of the power for some vast projects demanding large energy inputs? “We haven’t got the transmission lines. Nor have we got the power distribution facilities for things like agricultural projects,” says Mr Lugo.

His victory has been welcomed by the Bush administration in the US. According to Jim Cason, the US ambassador to Paraguay, who was the first foreign envoy to congratulate him on his victory, Mr Lugo will be welcomed in the White House sometime after he is ­inaugurated and before George W Bush steps down as president.


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