Paraguayan Gringo » Paraguay Politics

Paraguayuan Congress risks lives of 90 indigenous families

admin — Sun, 28 Jun 2009 14:31:04 +0000

Members of a Congressional committee in Paraguay have voted against the expropriation of Indigenous lands and their return to the Yakye Axa community. The vote undermines a binding decision made by the Inter-American Court of Human Rights, the highest body in the region.

Amnesty International has condemned the move as “unacceptable and one that risks the lives of 90 indigenous families.”

The Yakye Axa indigenous community has been forced to live on the side of a road linking Pozo Colorado and Concepción for over 10 years while awaiting resolution of their land claim. Living in such conditions they have severely limited access to clean water, food and medicines.

Nearby, members of the Sawhoyamaxa indigenous community also live along the side of the road awaiting the outcome of government negotiations with the individual who currently owns their traditional land. In a separate judgement, the Inter-American Court ordered the Paraguayan State to return their traditional lands. Since this judgement was passed in 2006, 22 members of the Sawhoyamaxa community have died from preventable causes. Most recently four infants under the age of two died after suffering from diarrhoea and vomiting.

The decision on the Yakye Axa case by a Congressional committee, although not binding, strikes a fatal blow to the attempts of this community to get their land back. It comes almost a year after the deadline set by the Inter-American Court of Human Rights, which in 2005 stated that the Paraguayan state should return the land to the Yakye Axa community.

Both communities have been demanding the return of their traditional land for more than 15 years.

In its ruling, the Inter-American Court said in their cases, it would be legitimate to put their right to land as Indigenous Peoples above the private interests at stake in these lands.

The Court set a deadline of 13 July 2008 for the return of traditional lands to the Yakye Axa and of 19 May 2009 for the Sawhoyamaxa.

Amnesty International warned that behind these latest votes there could be economic interests that are endangering the rights and welfare of Indigenous Peoples across Paraguay.

“The Paraguayan state as a whole, including the Congress but also the Executive, must urgently find a viable solution to the terrible situation faced by these indigenous communities,” urged Louise Finer.

The right of Indigenous Peoples to their communal lands is reflected in article 64 of the Paraguayan Constitution and in international legal instruments to which Paraguay is a party.

Paraguay – Business Opportunities in a Little Known Tax Haven

admin — Wed, 03 Jun 2009 22:04:32 +0000

If I told you about a de facto tax haven with a liberal constitution where you can buy land for $25 per acre, where you could have made 25% return on a simple bank account in the last year due to currency appreciation against the dollar, and where you can probably qualify for a second passport with visa-free travel to Europe in as little as three years… would I have your attention?

I thought so. I’m probably even more excited than you are about this country, which I first ‘discovered’ in 2003 and I have returned to many times since. You might be surprised when I tell you what country I’m talking about, but here goes anyway. It’s the Republic of Paraguay, in South America.

Paraguayans fondly describe their country, in fact, as the heart of South America. Their neighbours in Brazil and Argentina, however, have frequently used less flattering corporal analogies when referring to this small (by South American standards), little-known landlocked country.

But that attitude is changing… and fast! August 15th this year saw the swearing in of new Paraguayan President Lugo, a former Catholic archbishop, now ex-communicated (whatever you may like to deduce from that). The point is the change that is coming. More and more smart investors in just those neighboring countries – Brazil, Argentina and Uruguay – are profiting from the head start they have simply from being nearby and understanding the regional situation. Paraguay in late 2008 looks increasingly attractive as a place to live and do business.

This article is about how you can become involved. Paraguay is of interest to offshore wealth builders for several reasons:

• Excellent investment opportunities
• Tax Free Residence
• Second Citizenship and Passport

Whether you are looking for a place to live and retire, invest, save taxes or all three – and most importantly, why you would want to!

As somebody told me last month, in Paraguay “everything is virgin.” That is the reason for investing in Paraguay right now. There is lots of opportunity in all areas. But my prediction is that for the next decade or so, natural resources will be the driving force in the economy. In the very short term (read now), speculation on land prices looks interesting, bearing in mind that you can buy vast tracts of virgin land for as little as $25 per acre (up from $15 in 2007) Many smart investors from the US and Europe are joining Paraguay’s neighbours in snapping up bargains. It was even rumoured that family of President George Bush has been buying up land in Paraguay, though I have been unable to confirm this.

After a number of visits to Paraguay over the past five years, I’ve recently set up and am now in the process of developing a website for those who are interested in doing business, living and/or investing in Paraguay. This article will serve as an introduction, and if you would like to know more or follow updates as they are added, I’ll give you my web address in the Resource Section at the end.

Paraguay is a poor country on the surface, but it is very rich in natural resources, which are only now attracting serious attention from outsiders. Paraguay has water, oil, iron ore, gold… and vast unexploited agricultural capacity. With commodity and food prices at record highs and still climbing, these factors mean Paraguay has suddenly popped up on the radar of international investors. By the way, it’s also one of the world’s few forgotten tax havens, with no personal income taxes.

Nobody Bothers Paraguay

For many years travelers had little reason to visit poor, empty, landlocked Paraguay. Those who did had specific reasons to seek out its remoteness and the resultant freedom and privacy. Varied immigrants included both the persecutors and the persecuted from European wars, as well as religious groups as varied as the Mennonites and the Moonies who searched for and found their safe havens.

In Paraguay, nobody really bothers you, or even watches what you are doing, provided you don’t upset locals. From that point of view it’s very much “live and let live.” There is no Big Brother in Paraguay. (The rumour of a secret American military base in Paraguay is not true – I checked it out personally)

Back in 1864-1870, around the time North America was embroiled in its own civil war, the second bloodiest war ever to be fought in the western hemisphere, The War of the Triple Alliance, was being fought. After the war, having lost two thirds of its male population, Paraguay was in no fit state to carry on its development for the next few generations.

Somehow, as the Paraguayan population slowly recovered, the world passed Paraguay by. A few million poor, mainly indigenous people were simply not worth a second look, as the world was far more concerned with the Eva Peron in Argentina or the bikinis on Brazilian beaches.

From 1954-1989, military man Alfredo Stroessner ruled Paraguay with an iron first, throttling all political opposition but dividing his significant financial gains enough to keep enough people happy. The country became still more isolated, relying mainly on smuggling. Luxury goods were extremely highly taxed in Brazil and Argentina at that time, while Paraguay had only a few, very low taxes and a very liberal if under-developed economy.

Stroessner’s grand project was the Itaipu power plant, the construction of which in the 1970s gave Paraguay the highest growth rate of all Latin America. Still today, Paraguay is the world’s largest exporter of hydro-electric power. Paraguay doesn’t need oil at all, because it already has far more electrical energy than it needs. That’s one reason why those hydrocarbon reserves in the Chaco were never really developed.

After Stroessner’s exile in 1989, his Colorado Party remained in power through a series of debatably-free elections. High levels of corruption have ensured that the country’s significant natural wealth has been concentrated in the hands of a few, maybe 500, families. This elite shipped nearly all their wealth out of the country, in the form of foreign investments and importation of luxury goods like cars.

Now fast forward to 2008, the end of the Colorado regime. The new President Lugo, a former Archbishop who was excommunicated by the Catholic Church, has just been sworn in. Nobody I talked to will give a committal answer about Lugo. He might be the next ally of Hugo Chavez and neighbor Evo Morales. Then again, most signs point towards him following the successful, free market moderate stance of another ex Communist neighbor, Brazil’s President Lula.

On the other side we have first lady turned Presidenta Cristina Fernandez de Kirchner, running Argentina. Incredibly, she tried to all but ban export of one of Argentina’s major, well, exports – beef. Of course the wealthy Argentine farmers are furious and are fast buying up Paraguayan land over the border, with high commodity prices and lack of export taxes (or even income taxes, for that matter) making the small additional transport costs worthwhile.

Paraguay’s economy today is still hard to judge, because of the large informal sector. There is little industry, which I see as an opportunity over the longer term, as the country gradually grows wealthier.

Agriculture, too, is a great opportunity, in the shorter term. Many Argentine farmers have already noticed. Land prices in the Chaco have approximately doubled in the past year or so. That means they increased from $25 to $50 per acre. Yes, you read that right! European and American investors, too, have been quietly buying up vast tracts of virgin land recently.

Here are a few of the reasons why Paraguay is looking interesting:

• Water

What will happen when the oil runs out? People will find renewable energy sources. What will happen when the water runs out? Some of the world’s biggest cities, for example Los Angeles and Mexico City, are perilously short of water already. Paraguay does not have this problem. There is plenty of water to go around, most of it in sparsely populated areas. This creates ideal conditions for agriculture.

• Electricity

The Itaipu power plant is one of the seven wonders of the modern world. It produces 14 Megawatts of power (for comparative purposes, that is four times as much as America’s largest coal power plant, Plant Scherer). In terms of power, the energy this monster dam creates every day is equivalent to 433,000 barrels of oil. Except, of course, this is not oil. This is green, renewable energy. The total estimated hydropower potential of the River Pirana and its upstream tributaries is 40,000 megawatts. Wow! Paraguay is already the world’s largest exporter of hydroelectric power, but most of it is sold to Brazil at a fraction of market value as a result of cosy agreements made between corrupt politicians on both sides back during the military regimes of the 1970s. The new government is determined to change this. This will be interesting to watch.

• Oil and Gas

The Bolivian territory directly to the north-west of Paraguay has South America’s second largest natural gas reserves (second to Venezuela that is). It doesn’t take a genius to figure out that Paraguay’s northern Chaco bordering Bolivia might have similar resources. And that the country’s economy could transform almost overnight with a big find and the start of commercial production. The simple fact is there have been easier areas in the world for oil and gas exploration and distribution, which is why after the Suez Crisis big oil companies like Texaco who were looking for oil in Paraguay invested in exploration elsewhere instead. But with the high prices of today, exploration in remote areas is worthwhile, and technology makes it easier than it was a few decades ago. Oil and gas companies like Pantera Petroleum from the USA and CDS Oil and Gas UK are already there exploring and claim already to have identified substantial reserves.

• Land

This is another thing Paraguay has an abundance of. The land exists, is fertile and natural irrigation is easy. It is virgin. There are no people there. So nobody got around to developing it or putting in roads. High prices for soya, beef and other commodities have changed this. Argentina’s ban on beef exports has helped too… Argentinean farmers can’t export beef anymore, so they are quietly exporting their whole beef industry with all its expertise instead… to Paraguay. Meanwhile Brazilian farmers, hurt by the strong real, are also looking to reduce costs without having to move far from their familiar territory. Where are they headed? You guessed it – Paraguay.

• Minerals

Paraguay has established iron reserves, in the south of the country, along the Paraguay River and near the capital. It is likely that there is much more iron in the unexplored Chaco region. Once again, high iron ore prices are making exploration worthwhile. The new excitement, however, focuses on Gold and Uranium, which have been found in Paraguay and extracted informally by locals, but is not yet commercially mined. Most of the investment is coming from Canada, in particular the companies Latin American Minerals, Cue Resources and Crescent Resources. Cue’s COO Chris Healey was quoted as saying last month, to Business News Americas, “People are just starting to realize that there is something there. There is a lot of potential for gold, probably base metals, certainly uranium.” Of the new government, he says: “They are very keen on getting foreign investment and the new government is pretty favourable for us.”

These developments have not been lost on world markets. The Paraguayan currency, the Guarani, has long been the butt of jokes. But it appreciated more than 25% against the dollar over the past year. Paraguay is a dual currency country. Day-to-day business in Paraguay is in Guaranies, but most higher-priced items are tagged in US dollars. ATM machines pay out both currencies.

Paraguay is also very attractive as a personal tax haven, due to the fact that it has no income taxes on foreign source income. It is a relatively simple process to acquire formal residency as a foreigner, which can be used to reduce your tax liabilities elsewhere (depending, of course, on your personal situation). Then after as little as two to three years, you can apply for a Paraguayan passport with visa-free travel to Europe and much of the rest of the world. Dual citizenship is permitted.

'Obama of Paraguay' has hands full, too

admin — Fri, 29 May 2009 20:47:36 +0000

President Fernando Lugo signed a $30 million agreement last month with the U.S. ambassador to bolster Paraguay’s judiciary, public administration and national police force and reduce endemic corruption and patronage.

A former Roman Catholic bishop, Lugo has been in office just nine months, elected on promises that he would end systemic graft and redistribute wealth in a nation where 20 percent of the population earns 62 percent of the nation’s total income while the poorest 60 percent earns less than 20 percent, according to U.N. statistics.

Litany of scandal

Undoubtedly, the president was grateful for the opportunity to focus on issues other than several scandals swirling around him.

Just days before Easter holiday, a 26-year-old former parishioner named Viviana Carrillo claimed Lugo had fathered her 2-year-old son and that their affair began while he was still a bishop. The disclosure caused the country’s newspapers and bloggers to talk of little else. A local song even mocked a campaign slogan, replacing “Lugo has heart” with “Lugo has heart, but he didn’t use a condom.”

After several days of silence, the 57-year-old Lugo addressed the scandal head on. In a news conference he admitted to being the boy’s father and promised to accept full responsibility.

“I have failed the church, the country, the people, and all those who believed in me,” Lugo said, asking the nation for forgiveness.

A week later, a poor 25-year-old soap-seller named Benigna Lequizamon claimed Lugo fathered her 6-year-old son, Lucas Fernando, who she said was named after Lugo. Several days later, a third woman named Damiana Hortensia Moran, a 39-year-old former Lugo campaign worker, surfaced with a similar claim. While Lugo has denied Lequizamon’s claim, offering to submit to DNA testing, he has remained silent about Moran’s assertion that they have a 17-month-old son.

Calls for his resignation
The new revelations sparked even members of his own political coalition to call for his resignation. “Your current personal situation has made you lose all credibility,” said Sen. Alfredo Jaeggli in a public letter.
Lugo, however, has pledged to finish his term, which ends in 2013, and recently reshuffled his Cabinet in what he described as a relaunch of his government.
To be sure, there were serious doubts about whether Lugo could effectively govern the country even before the scandals hit.
The former priest has no political power base, having won last year’s election as the head of a coalition of parties called the Patriotic Alliance for Change, which includes about a dozen small leftist groups. Most political analysts agree that it will be difficult to keep these factions together while pushing a reformist agenda through Congress.
“We’re going to have to get used to the idea that the transition will be built on crises,” political analyst Milda Rivarola recently told the Asuncion daily, La Nacion.
After six decades of dictatorship and corrupt one-party rule by the Colorado Party, many Paraguayans were hopeful that Lugo would become the “Obama of Paraguay.” He had vowed to bring morality and ethnics to one of the world’s most corrupt political systems. In 2008, Paraguay rated 139 out of 180 countries in the annual Berlin-based Transparency International Corruption Perceptions index.
‘He promised change’
“He was elected president because he promised change,” said Aldo Zuccolillo, the 80-year-old publisher of the nation’s most prominent newspaper, ABC Color, and a strong Lugo supporter. “The Paraguayan people were fed up with a political party that robbed the country for 60 years.”
As president, Lugo has promised to address the problem of hundreds of thousands of poor farmers, who were pushed off their lands by large landowners connected to the Colorado Party, many of whom are Brazilians in the northern, soy-rich region of the country. Paraguay has the most unequal distribution of land in the region. Most farms are small, and rural residents live in extreme poverty. Only 1 in 100 farms is large, yet the large farms, when combined, claim 79 percent of Paraguay’s agricultural land.
Lugo has also vowed to fight drug trafficking and smuggling of contraband goods. U.S. officials estimate that 50 percent of Paraguay’s economy is in the “informal” sector.
Before the paternity claims, Lugo’s strongest asset had been charisma, popularity among the poor, and a squeaky clean image. The key question now, most analysts say, is whether his personal magnetism will be enough to lead the country into badly needed reforms.
“It is hard to see how Lugo can now credibly and effectively fight against abuses and corruption in Paraguay since he himself has been so tarnished,” said Michael Shifter, vice president for policy at the Inter-American dialogue, a Washington think tank. “The prospects for serious change were not too bright even before these revelations appeared.”
Fernando Lugo
Paraguay President Fernando Lugo is a product of the poor rural class that he hopes to raise up.
He was born May 30, 1951, in a small village in the San Pedro del Parana district. His uncle and several brothers were involved in politics but ran afoul of the dictatorship of then-President Alfredo Stroessner, who ruled with an iron hand between 1954 and 1989. Like many political opponents, they were forced into exile.
Lugo worked as a schoolteacher before becoming a novitiate of the Divine Word Missionaries in 1970. He later spent five years as a Catholic missionary in Ecuador where he came under the influence of the Liberation Theology movement that stressed defending the poor and working for social change.

When Lugo returned to Paraguay in 1982, his sermons about the rights of landless peasants living in extreme poverty came to the attention of Stroessner’s security forces. At the suggestion of his superiors, he traveled to Rome to study social sciences. In 1987, he returned to Paraguay, two years before Stroessner was ousted in a military coup.

In 1994, he became bishop of the San Pedro Diocese, which he gave up in 2005 to run for public office.

By 2006, Lugo became a well-known leader of peasant land movements, and a strong opponent of Stroessner’s Colorado Party that had ruled Paraguay for 61 years.

Some 100,000 supporters signed a petition asking him to run for president, and by the time he was elected last August – the Vatican finally granted him lay status a month before the election – he had forged a coalition of small parties that helped end more than six decades of one-party rule.

3rd woman accuses Paraguay's president of fathering child

admin — Mon, 11 May 2009 18:37:33 +0000

A third woman came forward Wednesday claiming Paraguayan President Fernando Lugo is the father of her child – a 16-month-old boy she named after Pope John Paul II.

The paternity claims have embarrassed the government and put opponents on the attack. But in Paraguay’s macho culture, political analysts say the idea that the former Catholic bishop has fathered multiple children may make him appear to be a strong leader.

The latest woman to claim a child with Lugo is Damiana Hortensia Moran Amarilla, 39, a divorcee with two adult children who said she met Lugo after he gave up his church leadership position. Unlike the two other women, she says she has no plans to sue the president.

Meanwhile, a Paraguayan newspaper reported that the first woman to come forward, his former parishioner Viviana Carrillo, 26, moved into the president’s home along with her 2-year-old, whom Lugo acknowledged is his son.
Benigna Leguizamon, an impoverished soap-seller who accused the president Monday of fathering her 6-year-old boy, filed a paternity suit in Ciudad del Este on Wednesday, asking for DNA tests.

Other women could come forward as well, according to one of Lugo’s former church colleagues.

Dictatorship-era official reappears in Paraguay

admin — Mon, 11 May 2009 18:35:02 +0000

A former dictatorship-era official considered a brutal torturer by human rights groups has made a surprise return to Paraguay, where he faces six pending trials for the disappearance and killings of government opponents in the 1970s and 1980s.

Minister Sabino Montanaro, who served as interior minister under ex-dictator Alfredo Stroessner, arrived in Asuncion early Friday after nearly two decades of self-imposed exile in Honduras, his lawyer said.

Attorney Luis Troche did not explain why Montanaro decided to return but painted a picture of an ailing, aged man coming back to his native land.

Montanaro, 86, suffers from a fractured hip, Parkinson’s disease, a form of pneumonia and arteriosclerosis, Troche said Monday.

Officials said Montanaro was being treated in a police hospital, but it was not clear whether he had been taken into custody.

Montanaro was interior minister for two decades under Stroessner. Human rights groups say the dictatorship was part of a regional network of right-wing military governments that abducted, tortured and “disappeared” thousands of suspected leftist dissidents during the so-called Dirty War.

Paraguayan human rights activist Luis Alfonso Resck called Montanaro a “a brutal torturer.”

When a military coup toppled the dictatorship in 1989, Montanaro sought refuge in the Honduran consulate in Asuncion. Days later he arrived in the Honduran capital, Tegucigalpa, where he lived until last week.

His unexpected return could give Paraguay the chance to move forward with the pending prosecutions.

Judge Arnaldo Fleitas said Monday he had “ordered a psychiatric exam to determine (Montanaro’s) mental state — whether he is in condition to appear before the court in the six pending trials against him for the torture, disappearance and death of dissidents.”

The Paraguayan government also expressed irritation at Honduras for not alerting them to Montanaro’s travel plans, and said it was considering lodging a formal protest.

“Montanaro should not have been able to leave Honduras so easily holding a diplomatic passport that expired in 1997,” Foreign Minister Hector Lacognata told reporters Monday.

Paraguay sought for years to question Stroessner about “disappearances” during the dictatorship, but he died in exile in Brazil in 2006 at the age of 93 without facing trial.