Key Findings:
- Santiago Peña, who won Paraguay’s 2023 presidential election, will take office on August 15. His victory consolidates Colorado Party hegemony. The party has only lost one presidential election since 1989, when Paraguay returned to democracy.
- A conservative-leaning economist, Peña has a close relationship with former President Horacio Cartes. Peña’s mentor was recently accused by US officials of corruption and collaboration with transnational terrorist groups.
- Peña’s campaign platform touted improved medical care, 500,000 new jobs, a war on drug addiction, and subsidies for youth entrepreneurship and employment.
- Peña plans to take an agnostic approach to trade. That means restarting diplomatic relations with the Chavista dictatorship in Venezuela and buttressing integration with neighboring Uruguay, Argentina, and Brazil.
Overview
On April 30, 2023, Paraguay held general elections for a new president and vice president, 45 senators, 80 House representatives, and 17 governors. The ruling Colorado Party (CP) was the biggest winner with 23 Senate seats, 47 House seats, and 15 governors.
The CP, a long-standing establishment party, also won the presidential race with 42.7 percent of the votes in favor of Santiago Peña. With 27.4 percent of the votes, second place went to leftist candidate Efraín Alegre, who has run three times for the presidency without success. The Paraguayan Constitution, in article 230, establishes that citizens “elect the president and the vice president through a simple-majority vote.” This precludes a runoff between finalists.
Peña’s victory consolidated CP hegemony. Since 1989, the CP has won every presidential election, with the exception of Fernando Lugo’s administration (2008–2012) which represented the Liberal Party. Previously, Alfredo Stroessner, also from the CP, led a 35-year military dictatorship.
After the electoral authority released the results, opposition leaders and citizens went out to the streets for one week to protest alleged fraud favoring Peña and the CP. However, the Organization of American States’s electoral mission stated they “did not notice any serious incidents, interruptions in the processing of sensitive electoral information, or serious deficiencies in the chain of custody of electoral material.” The organization added, “the mission wishes to state that there is no reason to doubt the results announced by the electoral authority.”
Lofty Campaign Highlights
President-Elect Peña promoted 10 chief aspirations during his campaign. The economy, rather than moral issues, appears to be his priority:
- 500,000 new jobs for an expanded taxpaying labor force.
- A 25 percent increase in cash welfare-payment generosity.
- Taxpayer-funded childcare centers to promote female employment and education.
- Rehabilitation centers to treat drug addiction as a disease rather than a crime.
- Broad socialized medicine for all Paraguayans and nutritional support for adolescents.
- More state housing with few application requirements for low-income households.
- Lower energy prices to combat inflation.
- Subsidies for firms that hire youths and for young entrepreneurs.
- Five new regional hospitals built for the digital-communications era.
- Modernized education for accessibility in the sparsely populated nation.
Peña’s website provides scant detail on how he will achieve his aspirations.
Tight with an Allegedly Corrupt Ex-President
During the Cartes administration (2013–2018), Peña served as finance minister from January 2015 to June 2017. From 2018 to 2022, Peña was a director at Basa Bank, which belongs to the Cartes Group. By then, the former president was the owner of the conglomerate.
On January 26, 2023, the US Treasury Department accused Cartes, other high-level officials, and four companies managed by the Cartes Group of corruption. According to the Treasury Department, “During his tenure as president and since, Cartes has engaged in a concerted pattern of corruption, including widespread bribery of government officials and legislators.”
Cartes has also been subject to US accusations of collaboration with terrorist organizations, which has allegedly undermined US security and its fight for transnational security. US officials have made similar allegations regarding Cartes’s three sons.
In his celebration speech on April 30, Peña thanked former President Cartes, who is currently CP President. “Your contribution, Mr. President,” Peña said, “can only be repaid with respect and admiration.” Defending Cartes in a CNN interview, Peña contended: “US accusations against Horacio Cartes are not true.”
Peña’s Pragmatic Foreign Policy
Paraguay is the only country in South America and one of the 13 worldwide that has diplomatic relations with Taiwan. Peña’s victory affirms the expectation that Paraguay will continue supporting the island nation. Former opposition candidate Alegre, in contrast, publicly acknowledged relations with Taiwan were providing “insufficient” benefits to Paraguay.
On May 5, through a phone call, Taiwanese President Tsai Ing-wen congratulated Peña on his victory and showed herself enthusiastic about Paraguay’s “continuous support and friendship” with the island. Matthew Miller, US State Department spokesman, congratulated Peña and said in a statement: “We are looking forward to working with the Peña administration in fighting against corruption and impunity and promoting security and economic growth.” US officials did not opine about Paraguay’s stand on Taiwan.
As president-elect, Peña has shared his interest in strengthening regional integration.
Paraguay is a signatory of the Asunción Treaty—which initiated Mercosur, the integration effort between Argentina, Brazil, Paraguay, and Uruguay—and Peña expects to reinforce it. He would like to integrate Paraguay’s markets with those of Brazil and Argentina and build a physical connection—presumably a major highway akin to the Panama Canal—for the Mercosur zone.
On May 16, Peña announced he would reestablish relations with Venezuela’s dictator Nicolás Maduro without political conditions once he takes office in August. While he is interested in a commercial partnership, he contended that “reestablishing relations with Venezuela will not impede my administration from criticizing possible human rights violations.”
Although Peña’s administration performance remains to be seen, the Paraguayan Production Union expects cuts to red tape. The hope is for boosts to key industries such as agriculture. Peña has already met with chambers of commerce to discuss the challenges local industries face. These meetings go along with his proposal for “creating 500,000 jobs” and “recovering the country’s economy.”
Mauro Echeverría
Mauro Echeverría is Econ Americas’ deputy editor. He holds a BA in international relations with minors in political science and anthropology from the San Francisco University of Quito. Mauro leads the research on local economic development at the Ecuadorian think tank Libre Razón.
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