Beyond scandal, Paraguay's president faces deeper challenges

The historic presidential victory of a former leftist priest last year in Paraguay, which ended six decades of one-party rule, was owed in no small part to his reputation as the "bishop of the poor." Fernando Lugo was seen as a man of the church who could bring ethics and morality to a country marred by backdoor deals and rampant corruption.

A year later, the slogan attached to President Lugo probably does more harm than good: He is now embroiled in a paternity scandal and has admitted to fathering at least one child while he was a Roman Catholic bishop.

While some opposition politicians called for his resignation, the scandal alone is unlikely to undo his administration, say political analysts here.

But it has highlighted his vulnerabilities. Although he recently scored a significant victory with the renegotiation of an energy deal with Brazil, for most of his first year voters have felt frustrated. More than half of the Paraguayans surveyed in a June poll said he had done little to fulfill his campaign promises.

His supporters say it is not his fault: Unrealistic expectations after the country's enormous political shift and a powerful opposition are obstacles to change. To his critics, however, passivity and political inexperience have made Lugo ineffectual at best, after he was hailed as the new leftist of Latin America.

"This could be a lost opportunity to advance the country," says Jose Maria Costa, a political columnist in Asunción who says Mr. Lugo has been unable to forge consensus and move his agenda forward. Mr. Costa says it could signal the return of the status quo in the next election, despite factions in the Colorado party, which ruled for decades. "If this experiment doesn't work, Paraguay could go back to the way it was, and for a long time."

Expectations were unrealistic

When Lugo, who was best known as a priest trained in liberation theology, was elected last year, Paraguay was one of the most corrupt countries in the world, ranked No. 138 out of 179 countries by Transparency International. More than a third of the population lives in poverty, and land distribution in this agricultural nation is one of the most unequal in the region, after former dictator Alfredo Stroessner and his Colorado successors gave away more than 6.8 million hectares to fewer than 2,000 people, according to data in a forthcoming book on Paraguay by American University assistant professor Miguel Carter.

Lugo's campaign "unleashed expectations out of proportion with the reality of what changes realistically could be made," says Domingo Rivarola, the director of the Latin American School of Social Sciences (FLACSO) in Asunción. Already, indigenous rural peasants, who were among his strongest supporters, have set up an encampment in a plaza in downtown Asunción to protest inaction on land reform.

Lugo has made improvements in healthcare by granting free access to clinics. His clearest victory thus far is scoring better terms for the Itaipu hydroelectric dam, which borders Brazil and Paraguay. It has been a decades-long dispute whose resolution will triple Paraguay's income from the dam.

But the economic crisis has stifled job creation, one of voters' biggest concerns. And most analysts agree that it is stagnation that has characterized his government so far. Public opinion seems to back that up. In the June poll published by the daily newspaper ABC Color, 54 percent said that the president is doing "little or nothing" to carry out his electoral promises.

"[The Itaipu agreement] will give him an important boost. He can come back and say, 'we did this. We delivered,'" says Mr. Carter. "But the political conditions have not been good for Lugo.... He is still bogged down by a lack of political support."

Internal divisions, external opposition

Lugo faces several challenges, beyond the economic crisis and a drop in the price of soy, a crucial export. The coalition that brought him to power was united in the desire to overthrow the Colorado party but not in ideology. So he faces internal factions, and also must confront fierce external opposition in the legislature.

And while he took the chief executive role away from the Colorado party, it still holds onto most levers of power, including the judicial branch.

"Only the executive branch at the highest levels has changed. All the rest are from the old system," says Ausberto Rodriguez, a presidential adviser. "This is a long process that we are experiencing."

When the paternity claims were first revealed, they were initially mocked. Most Paraguayans shrugged them off. The claims even gave him a popularity boost, says Carter, among those who consider the move "macho."

But it generated frustration among many. "I never had much faith in him, but I even have less now," says Gabriel Schetina, a lawyer in Asunción. "He sold this image to a society that he was from the church, that he was going to protect families."

And the scandal has done little to help Paraguay's international reputation.

"When Lugo was running, he said that he was going to show that we are finally a serious country," says Costa. "Now what does the world know of Paraguay? We have a president who had a child when he was a bishop."

Mr. Rodriguez says that while the scandal has hurt Lugo's credibility, he says that it has blown over because Lugo admitted that he is the father and has assumed his responsibilities. Two other women have since come forward claiming he is also the father of their children.

Beyond scandal, can Lugo overcome divisions?

But for many, this is a forgivable sin. Ramon Arrua, a security worker at the international airport, says he turned the incident into a lesson on forgiveness for his 11-year-old daughter. "I tried to explain to her that we are all human beings," he says.

Corruption, on the other hand, is not permissible. And Lugo's reputation for honesty is largely still intact.

"The most important thing he has done is that he has not stolen a thing, not even a single pencil, from the state," says Alfredo Cantero, a political reporter in Asunción.

But for many, this means little if he cannot broker consensus, especially with those representing the agricultural and landed elite.

"His election was incredibly significant for the country," says Mr. Cantero. "But my concern is that he will not be able to break the hold of the privileged classes, because he does not have the political strength or political experience to do so."