Lat-Am Watch: Chávez moves first on Paraguay
Brazil and Argentina look on as Venezuela ropes in Lat-Am´s latest leftie.
SAN PEDRO DEL YCAMANDIYÚ — Shaded by trees and sipping icy teréré the peasant farmers of San Pedro crammed the square in front their church on Saturday, for what promised to be a day of rhetorical fire works. Queries as to the direction the new government of Fernando Lugo would take were about to be answered as Lugo shared the stage in his native San Pedro with a jubilant Hugo Chávez, the unashamedly verbose president of oil-rich Venezuela.
If the crowd was expecting promises of great riches and rowdy speeching, sprinkled with old-fashioned anti-US rhetoric, Chávez didn’t disappoint.
He pledged he would turn the rural backwater into a hub of agro-industrial development. He would send doctors to cure glaucoma and cataracts and build an agro-ecological campus as well as a fertilizer plant. He also promised to supply Paraguay with all the oil it needed, “up until the last drop.”
It’s possible Chávez will deliver on some, if not all, his promises. Venezuela already supplies three-quarters of Paraguay’s oil needs, and could easily increase that supply the local demand of 25,000 barrels a day. And any kind of education in agriculture, even of the Bolivarian breed, should be welcome to this region where peasants still use farming methods considered outdated in Europe after the sixteenth century.
But at what cost? To be a friend to Chávez means to welcome him into your home. In the case of Paraguay, that means Mercosur. Venezuela’s induction in the southern cone trade bloc has already been ratified by Argentina and Uruguay. What is missing is the parliamentary approval by Paraguay and Brazil. With Lugo’s backing and popular support, Chávez could be a lot closer to Mercosur and the access to cheap foodstuffs which Venezuela desperately needs.
Bringing on board Chávez also means bringing on board his eastern ally, Iran. During his speech the Bolivarian suggested as much, relating how the government of President Ahmadinejad, had helped devolop a tractor plant in Venezuela. Paraguay, he said could develop a similar plant.
Iran also likes the idea. A presidential aide to Ahmadinejad told the AFP agency “Venezuela is a great friend and now we have another friend, Paraguay.”
Add to those declarations the fact that Paraguay has a powerful Syrian-Lebanese community in Ciudad del Este and that Lugo has just appointed the pro-Palestine lecturer Alejandro Hamed as foreign minister and closer ties between Asunción and Tehran are increasingly likely.
But Saturday’s populist display of friendship between Lugo and Chávez is about more than a few tractors and an agricultural college. It’s even about more than oil. At the core lies Paraguay’s relationship with Brazil.
For years Paraguay professed a foreign policy based on what was dubbed the ‘pendulum,’ swinging between the regional superpowers Argentina and Brazil and trying to stay ahead to the game. But over the past decade the regional importance of Buenos Aires has been totally eclipsed by the economic might of Brasilia.
As a result Paraguay has been entirely roped in by its neighbour. Brazilians have bought up huge tracts of land in Paraguay to cultivate soy, imposing their language and culture on the communities they settle in. Mercosur means Paraguayan industries are restricted from exporting elsewhere by high tariff barriers and have to settle for the price Brazil is willing to pay.
Meanwhile, energy giant Eletrobrás buys up the Paraguayan share of electricity produced by the Itaipú dam at almost cost price, reselling it at twice the amount. The 1973 Itaipú Treaty signed during the military dictatorship of Alfredo Stroessner is still in place.
President Lugo’s main campaign promise (and one of the reasons many moderates backed him) was to force Brazil into renegotiating the treaty. Lugo is now looking to Chávez as an ally in his effort to squeeze Paraguay out of the Brazilian stranglehold. He hopes that with the backing of Venezuela and her allies, he can force President Lula da Silva into bargaining over the dam royalties, as well as taming his soil-thirsty “Brasiguayos.”
That’s a long shot. Apart from the doubtful durability of the Venezuelan projects and their unhealthy dependency on world oil prices, any alliance with Venezuela has proven to be a divisive kind of friendship. Just take a look in neighbouring Bolivia, where Evo Morales doles out cheques signed by the Venezuelan ambassador.
Should Lugo move too close to Chávez, he will alienate himself from large swaths of the Paraguayan middle-of-the-road voters, including the Liberal party that provided him with the structure for his electoral win. He will also find himself with few friends in a Congress where his support depends heavily on economic liberals and conservatives.
The idea of allowing Iran a foothold in Paraguay is worrying for the whole region. Alarm bells will sound from Washington to Buenos Aires and Lugo will appear like a radical to the next US president, whomever he may be.
More than a threat, these developments are a cry for help. Paraguay, like it or not, is doomed to live with Brazil and Lugo knows it. While the dealings with Venezuela are taking shape President Lula still has the chance to throw the former bishop a safety line.
Reopening the unjust Itaipú Treaty will certainly anger the executives at Eletrobrás and the powerful Sao Paulo business community, but if it can be done to convince Paraguay of Brazil’s good intentions and, more importantly, buy Lugo the electoral and congressional credit he needs to manoeuvre, then both sides stand to win. Argentina too, should seize the chance to “reswing” the pendulum before it finds itself with an Iranian at the door and a fuming Jewish community.
SAN PEDRO DEL YCAMANDIYÚ — Shaded by trees and sipping icy teréré the peasant farmers of San Pedro crammed the square in front their church on Saturday, for what promised to be a day of rhetorical fire works. Queries as to the direction the new government of Fernando Lugo would take were about to be answered as Lugo shared the stage in his native San Pedro with a jubilant Hugo Chávez, the unashamedly verbose president of oil-rich Venezuela.
If the crowd was expecting promises of great riches and rowdy speeching, sprinkled with old-fashioned anti-US rhetoric, Chávez didn’t disappoint.
He pledged he would turn the rural backwater into a hub of agro-industrial development. He would send doctors to cure glaucoma and cataracts and build an agro-ecological campus as well as a fertilizer plant. He also promised to supply Paraguay with all the oil it needed, “up until the last drop.”
It’s possible Chávez will deliver on some, if not all, his promises. Venezuela already supplies three-quarters of Paraguay’s oil needs, and could easily increase that supply the local demand of 25,000 barrels a day. And any kind of education in agriculture, even of the Bolivarian breed, should be welcome to this region where peasants still use farming methods considered outdated in Europe after the sixteenth century.
But at what cost? To be a friend to Chávez means to welcome him into your home. In the case of Paraguay, that means Mercosur. Venezuela’s induction in the southern cone trade bloc has already been ratified by Argentina and Uruguay. What is missing is the parliamentary approval by Paraguay and Brazil. With Lugo’s backing and popular support, Chávez could be a lot closer to Mercosur and the access to cheap foodstuffs which Venezuela desperately needs.
Bringing on board Chávez also means bringing on board his eastern ally, Iran. During his speech the Bolivarian suggested as much, relating how the government of President Ahmadinejad, had helped devolop a tractor plant in Venezuela. Paraguay, he said could develop a similar plant.
Iran also likes the idea. A presidential aide to Ahmadinejad told the AFP agency “Venezuela is a great friend and now we have another friend, Paraguay.”
Add to those declarations the fact that Paraguay has a powerful Syrian-Lebanese community in Ciudad del Este and that Lugo has just appointed the pro-Palestine lecturer Alejandro Hamed as foreign minister and closer ties between Asunción and Tehran are increasingly likely.
But Saturday’s populist display of friendship between Lugo and Chávez is about more than a few tractors and an agricultural college. It’s even about more than oil. At the core lies Paraguay’s relationship with Brazil.
For years Paraguay professed a foreign policy based on what was dubbed the ‘pendulum,’ swinging between the regional superpowers Argentina and Brazil and trying to stay ahead to the game. But over the past decade the regional importance of Buenos Aires has been totally eclipsed by the economic might of Brasilia.
As a result Paraguay has been entirely roped in by its neighbour. Brazilians have bought up huge tracts of land in Paraguay to cultivate soy, imposing their language and culture on the communities they settle in. Mercosur means Paraguayan industries are restricted from exporting elsewhere by high tariff barriers and have to settle for the price Brazil is willing to pay.
Meanwhile, energy giant Eletrobrás buys up the Paraguayan share of electricity produced by the Itaipú dam at almost cost price, reselling it at twice the amount. The 1973 Itaipú Treaty signed during the military dictatorship of Alfredo Stroessner is still in place.
President Lugo’s main campaign promise (and one of the reasons many moderates backed him) was to force Brazil into renegotiating the treaty. Lugo is now looking to Chávez as an ally in his effort to squeeze Paraguay out of the Brazilian stranglehold. He hopes that with the backing of Venezuela and her allies, he can force President Lula da Silva into bargaining over the dam royalties, as well as taming his soil-thirsty “Brasiguayos.”
That’s a long shot. Apart from the doubtful durability of the Venezuelan projects and their unhealthy dependency on world oil prices, any alliance with Venezuela has proven to be a divisive kind of friendship. Just take a look in neighbouring Bolivia, where Evo Morales doles out cheques signed by the Venezuelan ambassador.
Should Lugo move too close to Chávez, he will alienate himself from large swaths of the Paraguayan middle-of-the-road voters, including the Liberal party that provided him with the structure for his electoral win. He will also find himself with few friends in a Congress where his support depends heavily on economic liberals and conservatives.
The idea of allowing Iran a foothold in Paraguay is worrying for the whole region. Alarm bells will sound from Washington to Buenos Aires and Lugo will appear like a radical to the next US president, whomever he may be.
More than a threat, these developments are a cry for help. Paraguay, like it or not, is doomed to live with Brazil and Lugo knows it. While the dealings with Venezuela are taking shape President Lula still has the chance to throw the former bishop a safety line.
Reopening the unjust Itaipú Treaty will certainly anger the executives at Eletrobrás and the powerful Sao Paulo business community, but if it can be done to convince Paraguay of Brazil’s good intentions and, more importantly, buy Lugo the electoral and congressional credit he needs to manoeuvre, then both sides stand to win. Argentina too, should seize the chance to “reswing” the pendulum before it finds itself with an Iranian at the door and a fuming Jewish community.
posted by PIT @ 6:09 PM
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