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Paraguay Awaits Lugo's Exit

Fernando Lugo

By PEDRO SERVIN and MICHAEL WARREN   12/25/11 10:51 AM ET   AP

ASUNCION, Paraguay -- Paraguay's congress closed its doors last week for more than two months of paid vacation, showing no interest in giving President Fernando Lugo anything on his wish list, even after lawmakers return to work next March.

Lugo's allies are also giving him the silent treatment. It's as if the entire political system has agreed to take a siesta until his five-year term is over.

Long legislative breaks are common in South America, where most governments shut down for the summer. But Paraguay sets the standard for collective stupor. Most businesses and public offices close at midday, even during relatively cooler months. Students attend classes in four-hour shifts in schools that lack air conditioning. Streets empty each afternoon as people seek refuge indoors.

Even the clocks seem to run more slowly from December through February, when the humidity thickens and temperatures soar to 109 degrees F (43 C) in the shade and 122 F (50 C) in the sun.

Still, the indifference Paraguay's lawmakers have shown to Lugo's proposals is striking. His 2008 election disrupted 61 years of right-wing Colorado Party rule, but he has hardly any reliable votes in Congress and his opponents dominate most government functions. Increasingly, they seem determined to prevent the left-leaning former Roman Catholic bishop from keeping any more of the promises that swept him into office.

Lugo pleaded with lawmakers last week to implement a 10 percent tax on personal income, first approved in 2004. He noted that booming soy and cattle exports boosted Paraguay's gross domestic product to 14.5 percent last year, one of the highest in the world. The windfall profits went almost entirely to a tiny elite, however, the president said, while the government remains starved of revenues.

"We won't defeat extreme poverty if we don't change the economic matrix," Lugo said. "In Paraguay the tax burden is only 13 percent, and it's the only country without a personal income tax. We need more resources to bring forward plans to eliminate social inequality."

The International Monetary Fund agrees with the liberation theologist on this point, insisting in its annual report on Paraguay that the country must collect more revenue. Economists generally recommend 30 percent or more overall taxation to provide for a country's people. In Europe's leading economies, the tax burden is more than 40 percent.

"We're concerned because the tax reforms aren't advancing," IMF representative Lisandro Abrego concluded during a visit to the capital, Asuncion, this year. "This country needs to raise its revenues to finance its economic development."

But Lugo's opponents stood firm before closing congress on Thursday: Incomes won't be taxed until January 2013, just four months before the end of his presidency.

Poverty has declined from 38 percent to 35 percent during Lugo's term as the economy has expanded, but 20 percent still live in extreme poverty, aptly described here as "misery," just as they have for the past 50 years.

Lugo has handed out $50 a month each to poor families in a small program known as Tekopora ("beautiful people," in the native Guarani spoken by Paraguay's poor). It's modeled on the welfare policies that keep kids in school and vaccinated across much of Latin America. But the payments reach just 93,000 of the nation's 6.8 million people.

Lawmakers said expanding the program would be a waste of money.

"Not a single family receiving this money has abandoned in 36 months its condition of poverty," said House budget commission president Olga Ferreira of the opposition Patria Querida party, who called the anti-poverty fight "a complete failure."

"Lugo gives them money but he doesn't teach them how to go out and earn their daily bread with their own sweat," she said.

Sen. Juan Manuel Boveda, an ally of retired general and convicted coup-plotter Lino Cesar Oviedo, said the welfare payments only serve to strengthen leftist parties. And Hector Cristaldo, president of a coalition of soy-producing landowners, said "the program should really be called 'Tekorei pora' ('beautiful but lazy')."

Lugo plans to work from Monday through Thursday during the summer weeks, but he too seems weary, distracted by his treatments for lymphatic cancer, isolated politically and frustrated by criticism in the news media. The leftist coalition he led three years ago has fallen apart. He hardly speaks with his vice president, Federico Franco, and has gone 18 months without formally talking to reporters.

He did push through the right to vote for Paraguayan citizens living outside of the country, and persuaded Brazil to nearly triple the amount it pays for electricity from their shared Itaipu dam, but that money, too, has remained tightly under congressional control.

In seeming desperation, he proposed some form of power-sharing agreement last week, a "governability pact" between political parties that could jointly run the country until the end of his term.

Not a single group among his political friends or foes reacted to his offer.

Instead, congress cut $1 billion from Lugo's proposed $12 billion budget for 2012. The money would have gone to raises for doctors, nurses and teachers; land reforms; and programs to house the homeless and improve schools, along with an expansion of welfare.

Workers had campaigned for weeks for their promised raises, occupying the plaza outside congress. Five hundred homeless people set up shelters inside Asuncion's zoo, suggesting that even monkeys get better housing. Riot police, themselves getting just a fraction of their promised raises, used water cannons, tear gas and clubs to remove them.

Far from being a savior, the sandal-wearing priest-turned-president has disappointed many among the poor.

"Lugo is just like all the politicians. He promised work for the whole world and he didn't come through," Tomas Benitez said Friday as he threw empty bottles and cans into the battered cart he pulls through downtown Asuncion. "I, my wife and my three children have to recycle trash to survive, but there are people who live quite well in this country."

Lugo still has 16 months left in office, but the leftists who helped him get there, such as farmworkers' leader Belarmino Balbuena, are already moving on, trying to find a candidate better able to wield power.

"With Lugo a change began toward the strengthening of democracy, but we still need land reform; health and education for the poor; job creation; work for thousands and thousands of young people; the establishment of taxes on grain exports and personal income, and other issues that are key for a functioning state."

___

Associated Press writer Michael Warren in Buenos Aires, Argentina, contributed to this report.

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Filed by Gabriel Lerner  |