Paraguay’s Rare Toss-Up Election

Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: Paraguay prepares for an unusually competitive—and foreign policy-focused—election, Venezuela carries out arrests at its state oil company, and the United States and Canada weigh intervention in Haiti.

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Paraguayan opposition members often compare the country’s ruling Colorado Party to Mexico’s Institutional Revolutionary Party (PRI), which governed for 71 consecutive years, from 1929 to 2000. The right-wing Colorado Party ruled for 61 years—34 of them during a dictatorship—until a brief back-bench stint from 2008 to 2013. The party has been in power ever since.

Though both the PRI and Colorado Party technically won at the ballot box during their periods of dominance, their power and influence at all levels of government and in the media meant they could easily snuff out potential challengers.

Now, the Colorado Party’s dominance may be shaken in the country’s April 30 general elections—which have been shaped by a combination of anti-corruption, anti-incumbent, and pro-China sentiments. The contest will be consequential for both Paraguayan and South American foreign policy: Under new leadership, Paraguay could switch its diplomatic allegiance from Taiwan to China and will have to renegotiate a critical energy treaty with Brazil.

The two candidates leading Paraguay’s presidential polls are the Colorado Party’s Santiago Peña, a former finance minister, and centrist Authentic Radical Liberal Party leader Efraín Alegre, a longtime lawmaker. Polls in the country have been unreliable in recent elections, though; in the last presidential contest, four pollsters favored the Colorado Party candidate by more than 15 points above his actual margin of victory. “At a month and a half away, anything could happen. It’s open,” Paraguayan sociologist Camilo Soares tweeted last week about the April election.

Alegre has benefited from corruption allegations against high-ranking Colorado Party leaders, including current Vice President Hugo Velázquez and former President Horacio Cartes, who were both added to U.S. sanctions lists for “systemic corruption” last year. Incumbent President Mario Abdo Benítez is unpopular, which could also benefit Alegre. (Abdo Benítez, also of the Colorado Party, is barred from running for reelection due to term limits.)

Alegre has earned support for his campaign promise to consider diplomatically recognizing China instead of Taiwan. Allegiance to Taiwan has long been foreign-policy orthodoxy in Paraguay—a result of the Colorado Party’s reflexive anti-communism and the sway this position has earned the country with the United States. Today, Paraguay is the last South American country to maintain full diplomatic relations with Taipei.

But some think Paraguay’s pro-Taiwan conviction could be waning. The costs of maintaining ties with Taiwan grew more visible during the COVID-19 pandemic, when China prioritized friendly countries for vaccine deliveries amid an international scramble for jabs. “Many [of Paraguay’s] neighboring countries received Chinese vaccines and were much more advanced in their vaccination programs,” political analyst Julieta Heduvan told Foreign Policy.

Taiwan eventually negotiated for India to send Covaxin vaccines to Paraguay, though the contract was canceled over quality control issues. Paraguay also agreed to direct-supply deals with drug companies and through the global COVAX initiative.

Paraguay’s influential farming and ranching sectors have called for their country’s officials to improve relations with China, too, saying they are missing out on potential revenue, Heduvan and Juan Manuel Harán wrote in ReporteAsia. Other agricultural-exporting countries in Latin America have seen their economies boom from sales to China in recent years. Just last week, Honduras announced that it would switch its diplomatic allegiance from Taiwan to China, primarily over economic concerns.

Paraguay’s next president will face another major foreign-policy decision closer to home. In August, Paraguay and Brazil are due to renegotiate a treaty that governs how electricity generated at their binational Itaipu hydroelectric dam—located on the border between the two countries—is divided and sold. Itaipu generates the second-most power of any hydroelectric dam in the world.

As construction of the dam was underway in the 1970s, the countries agreed to be co-owners of the project if Brazil covered more of its upfront costs and Paraguay paid Brazil back over time. Paraguay would sell any electricity it did not use to Brazil at a controlled price rather than selling it to other buyers at the market rate. The terms of the 1973 deal were for 50 years, and its time will be up in August. Many Paraguayans feel they got a poor deal and see the scheduled renegotiation as the chance to correct things.

Paraguay uses only around 8 percent of the electricity it generates at Itaipu; if the country could sell its electricity on the open market rather than at price-controlled rates, it could mean a new windfall of public revenue. Fuller government coffers could be devoted to initiatives such as increased social spending and efforts to electrify transportation and other emissions-heavy sectors of the country’s economy, political analyst Cecilia Vuyk wrote in ABC Color last week.

Aware of the sensitivity of Paraguay’s grievances surrounding Itaipu—and the fact that Brazil stands to lose its favorable energy prices secured by the deal—Brazilian President Luiz Inácio Lula da Silva traveled to western Paraná to attend a ceremony in honor of the dam’s new director last week, saying he would support a new deal that “takes into account the respect Brazil needs to have for its ally, our dear Paraguay.”

Vuyk is part of a civil society group that is pushing presidential candidates to better define their positions on Itaipu. “It will be a central theme of the next government, and because of that, debate and then protagonism by all citizens will be key,” she told Foreign Policy.

Peña and Alegre both say they want to ensure good electricity prices for Paraguayans but have not provided much further detail. When a left-wing politician briefly held Paraguay’s presidency in the past, he negotiated a deal with Brazil that increased the amount Brazil paid for Paraguayan energy.

While the results of Paraguay’s election could bring about important foreign-policy changes, the country’s history of continuity stands as a caution. “While the fundamentals of this election should lead to an opposition victory, betting against the Colorado Party is never a smart money play,” Latin America Risk Report’s James Bosworth wrote last week.

Friday, March 24: The U.N. Human Rights Council discusses its ordinary periodic review of human rights in Brazil and Ecuador.

Friday, March 24, to Saturday, March 25: Leaders from Latin America, Spain, and Portugal meet for the Ibero-American Summit in the Dominican Republic.

Sunday, March 26: Cuba holds parliamentary elections.

Sunday, March 26, to Friday, March 31: Brazilian President Luiz Inácio Lula da Silva visits China.

Workers of Venezuela’s state oil company PDVSA carry a model of an oil well during a demonstration in support of President Nicolás Maduro in Caracas on Aug. 10, 2022.YURI CORTEZ/AFP via Getty Images

Venezuelan shake-up. Venezuela’s energy minister resigned from his post this week amid an anti-corruption probe, and around 20 executives who worked in the state oil company’s supply and trade division have been arrested, Reuters reported.

The shake-up is at least partially a result of investigations pushed forward by Venezuelan Vice President Delcy Rodríguez into unpaid oil sales at the company. Venezuela’s oil sector has been under heavy U.S. sanctions since 2019, and it has used low-profile intermediaries to reach customers still willing to buy its oil, such as China and Iran. Some $21 billion in that string of payments have gone unpaid, according to documents seen by Reuters.

“The level of graft considered to be acceptable may have changed given just how much the economy has contracted in recent years, and how the 2024 elections mean that Maduro needs cash to prime the economy and secure votes,” Nicholas Watson, a political risk analyst focused on Latin America at Teneo Holdings, wrote in a note cited by Bloomberg.

Cease-fire on ice. Colombian President Gustavo Petro announced on Sunday that he would suspend the government’s cease-fire with the Gulf Clan drug cartel, saying its members targeted Colombian security officials. The December 2022 cease-fire had been part of Petro’s efforts to negotiate an end to ongoing conflicts with several armed groups in the country, but last week’s flare-up underscored how difficult that will be.

“Process matters,” Colombia-based International Crisis Group analyst Elizabeth Dickinson tweeted on Wednesday. “The problem wasn’t the idea of making cease-fire agreements to create space for dialogue. The problem was announcing cease-fires before protocols, monitoring mechanisms, and clarity of orders for security forces were agreed.”

Chile’s literary diplomat. Former Chilean diplomat Jorge Edwards died last week. His diplomatic posts included Havana, as remembered in his 1973 book Persona Non Grata: A Memoir of Disenchantment With the Cuban Revolution. The book has the distinction of having been banned both by the left-wing Fidel Castro regime in Cuba and the right-wing Augusto Pinochet dictatorship that took power in Chile in 1973.

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• The U.S. Has a Troublesome Asian Ally Against China by Nick Aspinwall

A makeshift refugee camp is set up by people escaping gang activity in the Delmas 19 commune in Port-au-Prince, Haiti, on March 23.RICHARD PIERRIN/AFP via Getty Images

This month, Haiti’s oldest newspaper, Le Nouvelliste, published an editorial arguing that the country’s security crisis amounted to an “undeclared war.” Amid ongoing gang violence, at least 208 people were killed in the capital of Port-au-Prince in the first two weeks of March alone. A cholera epidemic also continues to spread throughout the country.

The Nouvelliste editorial cited a Doctors Without Borders adviser who described “scenes of war” in the capital. “When an official from Doctors Without Borders talks about ‘scenes of war,’ he knows what he’s talking about,” journalist Frantz Duval opined.

U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau are discussing Haiti’s security crisis at a bilateral meeting in Canada that concludes Friday. Washington has in recent months urged Ottawa to lead a multilateral military force to stabilize Haiti, something that interim Haitian Prime Minister Ariel Henry and U.N. Secretary-General António Guterres have both called for.

Henry’s leadership mandate in Haiti is contentious. He stepped in after former President Jovenel Moïse was assassinated in July 2021, and opposition members say Henry has resisted ceding power in efforts to negotiate a pathway to new elections. A civil society coalition known as the Montana Accord has touted its own plan for a political transition that Henry has spurned, while the United States and U.N. continue to back him.

When Henry called for a foreign military intervention in October 2022, Montana Accord members and other Haitian civil society groups criticized the appeal. Instead of sending troops, they argued, foreign powers should urge Henry to agree to their proposed steps to rebuild governance in the country.

Montana Accord member Monique Clesca reiterated that position in a recent essay in Foreign Affairs, arguing that a nominal plan for elections that Henry endorsed in December 2022 lacked broad dialogue and specifics. “If there is political will among U.S. officials to stop propping up Henry’s government and bring him to the negotiating table, it can happen,” she wrote.

The United States and Canada have taken some steps to address Haiti’s crisis since Henry’s October 2022 appeal, including sanctioning officials linked to corruption, sending aid to the Haitian National Police, investigating Moïse’s killing in U.S. courts, and even dispatching a Canadian ship to patrol waters off the coast of Haiti. But those have failed to change the country’s security and political situations.

Georges Fauriol, a co-chair of the Caribbean Policy Consortium, wrote last week in Global Americans that the international response to Haiti currently adds up to “paralysis” while “the trajectory of current developments suggests a major humanitarian and political implosion with significant ramifications for the Caribbean and the United States.”

The outcome of this week’s meeting in Ottawa will show if anything might change. In an interview with Le Nouvelliste, Haitian doctor and humanitarian Jean William Pape said, “We are all guilty [in this crisis], the foreigners too. The foreigners must help us and can no longer wash their hands as if they are Pontius Pilate.”