The history of democracy in Latin and South America has been tumultuous.  In Paraguay, the ruling Colorado party is fraught with corruption and may lose its grip on power for only the second time in almost 40 years.  A series of high-profile assassinations only serves to generate further instability in the country, and the winner of this election may determine the fate the increased cash flow coming from a reworked Itaipu Treaty with Brazil.

            With such a combination of instability and potential profiteering, where to begin?  The state of Paraguay’s democracy has never been in an ideal position following the overthrowing of dictator Alfredo Stroessner in 1989.  In fact, many Paraguayan elites persist from that era and have continued the corruption and underhanded tactics that were rampant during Stroessner’s reign.  Paraguay is well known for facilitating illegal activity. The pseudo-authoritarian establishment Colorado Party obtains power legitimately but relies on Paraguay’s shadow economy to keep afloat.  The party is complicit in violence conducted by the many gangs that perform illegal activity within the country. When he was in power, Stroessner called his complicity in illegal activity “the price of peace” and was necessary during the height of the Cold War.  This complicity continues today, where illegal exports make up almost 40% of Paraguay’s economy and is worth about $5 billion yearly. 

Paraguay is so corrupt that is has caught the attention of the Biden Administration, whose ambassador to Paraguay announced sanctions against Vice President Hugo Velázquez and several others in July of 2022.

            However, this corruption is finally catching up to the ruling Colorado Party.  The party itself has no true leader going into the April 2023 election, and the party’s primary is hotly contested between current president Mario Abdo Benitez and Paraguay’s president before him, Horatio Cartes.  While whoever wins remains the general election favorite, two key factors may affect their election chances.

            First, both candidates are embroiled in scandals generated by said corruption.  They have both been accused of high-level corruption, and both fear political persecution if the other were to become president in 2023.  Cartes has been accused of money laundering, as has Benitez’s vice president, Hugo Velázquez.  For an electorate tired of organized crime and political corruption, this may temper the Colorado Party’s election hopes and deliver a much-needed windfall to their leftist opposition.

            Secondly, in recent years, much of Latin America has favored challengers as electorates grow tired of the same faces not making the changes they desire. Many Latin and South American countries are dealing with problems such as inflation on top of continuing problems such as gang activity, organized crime, and rampant corruption, and Paraguay is no exception.  While the winner of the Colorado Party primary will still be the favorite to win the general election in April, this trend compounded with their continued scandals may feed the desire for change within Paraguay’s government.

            Why is this particular election so important?  The answer lies almost 50 years ago with the 1973 signing of the Itaipu Treaty with Brazil.  The Itaipu treaty was signed following an agreement to build a hydroelectric dam between the two countries.  At the time of its completion in 1982, the dam was the biggest of its kind in the world.  Paraguay did not (and does not) need all of the energy provided by the dam, and the Itaipu Treaty allowed Paraguay to sell its excess energy back to Brazil for below market rates until their debt to Brazil for building the dam was paid.  The debt will be paid in full in 2023, allowing for a renegotiation of the treaty and much better terms for Paraguay.  The ruling party will then get to allocate the excess money that Paraguay received from the renegotiated treaty.  The electorate knows this, and having candidates mired in corruption controversies lowers public confidence in the Colorado Party.

            In addition, leading up to the primary season, there have been events that could be perceived as trying to block the election from happening.  First, several high-profile assassinations have taken place within the last year.  After a drug bust and subsequent laboratory dismantling inside Paraguay’s largest prison cost the First Capital Command, a notorious gang, millions of dollars, the director of the prison and several high-profile investigators were killed under dubious circumstances.  While none of the assassinations have been confirmed to have come from the Command, the killings have only added to the pressure surrounding the corruption scandals and general instability within the country.

            Secondly, in September, a fire at Paraguay’s Superior Court of Elections saw the destruction of over a third of the country’s electronic voting machines.  The leftist opposition leader Guillermo Ferreiro claims that the fire was an act of sabotage and therefore a method of voter suppression, but the court has declared that the December primaries will continue as planned.

            What is the state of democracy in Paraguay?  While elections continue relatively unimpeded, the Colorado Party tacitly allows illegal activity, which can be a force to destabilize and harass opponents.  The fire at the Superior Court of Elections is still being investigated, but if it is found to be foul play, then it may be the doing of a would-be authoritarian attempting to suppress voters.  In addition, both candidates vying for the Colorado party leadership in December are dealing with accusations of money laundering.  Their potential persecution of one another for non-political crimes is one way that authoritarians stealthily eliminate opponents.  Together, these factors make Paraguay a functional yet unstable democracy.  Only the future will determine the course Paraguay will take.

            There are several events and circumstances that may play a role in determining the result of the December primaries as well as the general election.  An unhappy electorate is facing high-profile gang assassinations, politicians mired in corruption scandals, and a looming treaty expiration that may provide a huge boon for the struggling country in the coming years.  The winner of the election may politically persecute the losers and pilfer the money coming from a reworked deal with Brazil.  The Paraguayan citizenry stand at a crossroads, and every candidate running for president knows that this is a very important election.  Will they make the right choice?