Tuesday, April 23, 2013

Colorado Party comes back to power making Paraguay as a politically landlocked country again

Horacio Cartes of the Colorado party won the presidential elections held last sunday in Paraguay. The Colorados had ruled the country continuously for 61 years in a one-party dictatorship until 2008 when Fernando Lugo, the leftist " Bishop of the Poor" defeated the Colorado candidate and made history. Lugo was hailed as the historic saviour of the poor and was expected to bring about a much needed change in the poor and backward country ruled by traditional oligarchs. Part of the reason for the Colorado defeat was the division within the party leadership. But as soon as Lugo came to power, the Colorados reunited and did not let Lugo to implement his reformist agenda. Poor Lugo was not allowed to help the poor  by the rich Colorados who dominated the Congress. Eventually the Colorados in collusion with Vice President Franco from the Liberal party ousted President Lugo through impeachment in an ugly congressional coup in june 2012. As a punishment for this breach of the spirit of democracy, Paraguay was suspended from Mercosur and Unasur. The country will regain its presence in these regional organizations when the new president takes over as the legitimately elected one.

Until 2008, Paraguay, the geographically landlocked country remained as a kind of politically landlocked one too with its rightist governments while all the surrounding countries  had gone Left in the last couple of decades. The Leftists continue to rule in Brasil, Argentina, Bolivia, Peru, Ecuador, Venezuela and Uruguay, while the Leftist government of Paraguay was overthrown before the completion of its term. Again Paraguay has become the exception by going back to the oligarchic rightist rule now while the other countries of the region are progressive, reducing poverty and inequality. True, Chile had also gone right after two decades of centre-left rule in 2010. But it seems that the leftist candidate Michelle Bachelet is likely to win back the presidency in the next elections to be held in 2014.

The return of the Colorados means " business as usual" with the government agenda driven by the rich and powerful. The President-elect Cartes is one of the richest businessmen with interests in 25 companies and he is also the owner of the football club La Libertad. Paraguay is the only country in the western hemisphere which does not have " Personal Income Tax". The governance is opaque and the instituitions are weak. They are not based on rules or systems. Even the economy is mostly informal. Unofficial foreign trade is much more than the official one. One of the biggest business in the country is to smuggle electronic and other goods to Brasil and Argentina from the border city of Ciudad del Este.

The Colorado party is not just like any other political party. It is the strongest institution in the country with a stranglehold over the whole political, economic and social system. One has to be a member of the Colorado party to succeed in government career. Most government servants including diplomats are members of the Colorado party. There is no proper merit-based transparent system for recruitment to government jobs. There are very few avenues for upward mobility of the bottom of the pyramid given the poor educational and socio economic conditions. There are over a million ( one sixth of the total population) Paraguayans who have moved to work as maids and labourers in Argentina.

Paraguay has not changed much from the portrayal of the country by Graham Greene in his novel " Honorary Consul". Greene describes the country as a corrupt, decadent and backward. Even today, visitors to the country are likely to feel as though they have entered the ninteenth century.

The scandal caused by the revelation of President Lugo's affairs with some women when he was a catholic priest is illustrative of another unusual social aspect of the country. A number of women had alleged that they had affairs with Lugo when he was working as priest. President Lugo admitted to fathering a child with one of the women and agreed to pay compensation. In another case, he neither admitted nor denied. In any other country, such a scandal would have brought him down from power immediately. But he was able to ride out the scandal since the country is full of such sinners. The Colorado party could have got him impeached for this. But they did not do it since their political leaders had more skeletons in their cupboards. Affairs with many women are common in Paraguay due the shortage of males after most of the men were wiped out in the Triple Alliance War ( over sixty percentage of the entire population was killed in the war ) which Paraguay had foolishly waged against the combined powers of Brasil, Argentina and Uruguay in 1864-70.

Paraguay has enormous agricultural potential with its vast tracts of arable land and abundant water resources. It is the fourth largest exporter of soybeans in the world. It has huge surplus electricity which it sells to Brasil. With these agricultural and energy resources and a small homogeneous ( Paraguay is the only country in Latin America where the native language Guarani is spoken by all the citizens) population of just six million, the country can become prosperous easily and quickly, if only the Paraguayan political leaders change their mindset. President-elect Cortes could get inspiration from the new Mexican president Enrique Nieto, who has given a new direction and image to the PRI party which had ruled Mexico for 71 years and was also perceived negatively like the Colorados in Paraguay. Cartes could add Inclusive Development in his political and economic agenda and modernise the country to move it into the twenty first century and make it as part of the emerging New Latin America.

Monday, April 15, 2013

New beginning and hope for Venezuela

The election of Nicolas Maduro, the chosen heir of Chavez, in last sunday's  election, is good news for the peaceful and orderly transition of Venezuela after the abnormal, autocratic and quixotic rule of Chavez in the last fourteen years. If Capriles had won, the change would have been abrupt and traumatic for the  Chavistas who might not have given up power so easily without some messy fight. Maduro's victory has given extra time for the country to decide its new course in the post-Chavez period. If Maduro  follows the pro-poor policies of Chavez in a moderate and pragmatic manner (wthout the confrontational and extreme method of Chavez) and combines them with business-friendly policies ( as Lula did in Brasil) there is new hope for Venezuela.

Venezuela is blessed with one of the largest petroleum reserves, large mineral and water resources as well as a pleasant climate and small homogeneous population of just 28 million without any ethnical. linguistic, religious issues. Venezuela has the potential to be one of the prosperous countries of the world with an ordinary and sensible Maduro rather than an extraordinary prophet cum caudillo like Chavez.

Chavez raised the hope of millions of poor Venezuelans after the corrupt regime of his predecessors who had plundered the country and left poverty. He started off with good intentions and policies but later succumbed to megalomanic temptations. While he has distributed some of the oil wealth to the poor people, he has left the country in a worse shape than what it was when he came to power in 1998. Inflation, power shortage, scarcity of essential items, falling oil production and a corrupt system of controls on foreign exchange and imports are some of his legacies. He has brutally damaged the political, economic and social instituitions of the country. Caracas, which was a peaceful city in 1998 is the only city in Latin America where even diplomats feel unsafe because of the rampant crime and kidnappings.

 If Maduro does not deliver, Capriles will come to power in his third attempt next time ( Lula also lost three times before winning in the fourth time ). Capriles, just 40 in age, has time on his hands. Henrique Capriles could be a reformist President, like Enrique Nieto of Mexico, who has renewed the hope for Mexico. Capriles could get inspiration from Nieto's PRI party which has made a come back after having been out of power for twelve years and learning the right lessons.

In any case, Maduro will be a  less- polarizing political leader with a weaker political base. He is not an ideological fanatic like Chavez, who wanted to change Venezuela and Latin America upside down and who was rooting for daily battles against anyone who did not agree with him. Maduro's authority will be challenged both from within Chavismo and outside. Diosdado Cabello, the rival of Maduro has the support of the military and is waiting to take the place of Maduro. The opposition party, encouraged by the closest finish in this election, will challenge Maduro's administration all the way.

With these constraints, Maduro is likely to be a moderate leader  and be less antagonistic towards business and allow more space for the private sector to grow. He could make the political course correction by being respectful of the middle class and businessmen who were the target of insults and abuse by Chavez.

Maduro will not interfere in the affairs of other Latin American countries as Chavez did so brazenly. Nor will he squander the oil wealth in freebies to other countries as Chavez did so extravagantly. The Colombians would be happy with Maduro while FARC has lost a crucial support after Chavez.

Maduro will, however, continue to be loyal to the Castro brothers, who had played a role in his designation  as the heir of Chavez. But he will not be able to be over generous to Cuba as Chavez was. Maduro will continue the anti-American rhetoric but in a much less confrontational way. He will not go out of his way to needle the Americans as Chavez did.

Maduro will be a faithful friend of Brasil and especially Lula, who had openly campaigned for him. Brasil's economic and commercial interests in Venezuela will be safe and continue to grow.

Maduro will fit Venezuela in Mercosur without politicizing it as Chavez tried. A sober and moderate Venezuela will add to the strength of Mercosur, which will become a global power house of agriculture and energy.

All this is good news for Venezuelan democracy and the future of the country.  It is also good for Latin America as a region which is now free from the polarising influence of Chavez. The moderate left will now consolidate itself and prevail over the extremism preached by Chavez. Lulaism ( pragmatic and balanced pro-poor and pro-market policies) is the indisputable long term trend for Latin America. Not Chavism.

A stable Venezuela and Latin America are good for the world and for India too. Venezuela supplies over 300,000 barrels of crude oil per day and this amounts to ten percent of India's total crude imports. Indian companies have billions of dollars of investment plans in the Venezuelan oil sector. Chavez sought a political price from India for giving oil fields to India. This made the Indian political leadership cautious since they were uncomfortable with his all- out anti-American tirade. But India need not have any such hesitations about Maduro, a devoted Sai Baba follower.