Paraguay Swears in Franco After President Lugo Impeached

Photographer: Norberto Duarte/AFP/GettyImages

Paraguayan President Fernando Lugo gives a statement at the government palace in Asuncion, on June 21, 2012. Close

Paraguayan President Fernando Lugo gives a statement at the government palace in... Read More

Close
Open
Photographer: Norberto Duarte/AFP/GettyImages

Paraguayan President Fernando Lugo gives a statement at the government palace in Asuncion, on June 21, 2012.

Leaders from Latin America threatened to isolate Paraguay after the nation’s Congress ousted President Fernando Lugo in a power grab that’s being compared to a coup by regional governments.

Lugo, a former Roman Catholic bishop, was removed from office in a 39-4 vote yesterday by the opposition-controlled Senate for encouraging land seizures and fomenting violence, 24 hours after the lower house voted to impeach him. Vice President Federico Franco, a one-time ally turned critic of Lugo, was sworn in as president as riot police held back thousands of Lugo supporters gathered outside Congress

Lugo, since ending six decades of Colorado Party rule in 2008, failed to build support for his policies of redistributing land in the world’s fourth-largest soybean exporter and was blamed by elites for a rise in territorial disputes. The final straw came on June 15, when a shootout between landless peasants and police left 17 dead, including six police.

“What we’re seeing is increasingly the use of democratic institutions for anti-democratic means,” Christopher Sabatini, senior policy director at the Council of the Americas in New York, said in an interview. “This is not a traditional coup. This was a ramped-up, accelerated process, clearly motivated by partisan interests.”

Franco, whose Authentic Radical Liberal Party partnered with its arch-rival the Colorado Party to remove Lugo, said that he’ll lead a transitional government until elections scheduled for April 2013 take place.

Still, he faces a backlash from Paraguay’s neighbors, who condemned the haste with which Lugo was removed and are threatening to expel the land-locked nation from the Mercosur trade bloc that includes Brazil and Argentina. Ecuador and Venezuela, allies of Lugo, called his ousting a coup and said they won’t recognize the new government.

‘Wounded’ Democracy

Lugo, 61, had called on the Supreme Court to declare the impeachment process unconstitutional and demanded more time to prepare his defense against charges of negligence and incompetence in the shootout deaths. He was also blamed for a rise in crime, humiliating the country’s once-dominant military and ceding Paraguay’s energy sovereignty to its neighbors.

Still, he struck a conciliatory tone in his farewell address to the nation, urging supporters to refrain from violent protests.

“Today it isn’t Fernando Lugo who took a hit, it’s Paraguay’s history, her democracy, which has been profoundly wounded,” said Lugo, who had tried to head off impeachment by replacing the interior minister and police chief. “As I have always acted within the law, and although this has been twisted like a fragile branch in the wind, I submit to Congress’ decision.”

Army Subdued

Regional leaders rushed to Lugo’s defense, fearing that his removal would mark a reversal for the nation’s fragile democracy. Since General Alfredo Stroessner’s three-decade dictatorship ended in 1989, Paraguay has been marred by political turmoil including assassination, a coup attempt and a previous presidential impeachment. The army, hours before Lugo was removed, vowed to respect whoever was named his replacement.

Ali Rodriguez, the Venezuelan secretary-general of the Union of South American Nations, or Unasur, said that a mission of regional diplomats that he led to Asuncion to try and defuse the political crisis came up “against an insurmountable wall” from the opposition.

Prior to Lugo’s removal, the 12-nation group issued a statement warning that Congress’ action may violate Paraguay’s democratic commitments under Mercosur and other regional treaties, leading to its exclusion from regional integration efforts.

U.S. Reaction

The U.S. State Department said that it was watching the situation closely.

“We urge all Paraguayans to act peacefully, with calm and responsibility, in the spirit of Paraguay’s democratic principles,” said Darla Jordan, a spokeswoman for the State Department, said in an e-mailed statement after the trial.

While Lugo struggled throughout his presidency to build alliances, and saw his credibility shaken after he acknowledged fathering as a priest two of four children named in paternity suits against him, he oversaw a period of economic prosperity.

Spurred by strong demand for its beef and soy, especially from China, gross domestic product expanded 6.4 percent last year and 15 percent in 2010, the fastest in Latin America, according to the International Monetary Fund. Strong growth and better public finances helped the country win two credit rating upgrades since 2010 by Standard & Poor’s.

The central bank had taken steps to emulate Brazil and begin targeting inflation, and the government even considered selling its first-ever international bond.

“It’s incredible that this is happening to a president who has achieved economic growth of more than 25 percent in the last four years,” pro-Lugo Senator Alberto Grillon told Buenos Aires-based Todo Noticias television channel earlier yesterday.

Economic Challenges

Still, the Germany-sized country remains one of Latin America’s poorest, with land concentrated in the hands of a handful of farmers and a large segment of the economy dependent on the smuggling of imported goods to Brazil and Argentina. Despite attempts by Lugo to impose a levy on personal income to fund infrastructure investments, the country’s tax rate remains one of the lowest in Latin America and more than 20 percent of the population lives in poverty, according to the IMF.

Franco, a 49-year-old former surgeon, told Congress he’ll continue with Lugo’s government plan until his successor takes office in August next year.

“The social problem will be fundamental for this government,” he said.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.