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Latin America Risk Report: Paraguay – Peña elected president

Santiago Peña won Paraguay’s presidential election on Sunday with a plurality but also a wide 15-point margin over his nearest competitor. Peña won 43 percent of the vote while Efraín Alegre, the Concertación candidate, came in second place with 27 percent of the vote followed by Payo Cubas of the Partido Cruzada Nacional who earned 23 percent of the vote.

The large margin of victory goes against the fact the election appeared competitive down the stretch. Six weeks out from the election, we called it a toss-up, saying, “while the fundamentals of this election should lead to an opposition victory, betting against the Colorado Party is never a smart money play.” A week before the election, numerous articles in the international media discussed why the opposition could triumph.

Ultimately, the Colorado Party’s political machine turned out its vote while Alegre and Cubas divided up the opposition, providing Peña not just a victory but the appearance of a mandate. The Colorado Party performed well in congressional and gubernatorial races too. The party won 15 of the country’s 17 gubernatorial races and will have majorities in both houses of Congress: 48 of 80 seats in the Chamber of Deputies and 23 of 45 seats in the Senate. 

It’s a mistake to try to pull regional trends from this one election victory. This election does not signal a break in the anti-incumbent mood in Latin America. Nor is it a “shift to the right” in the region. It’s not a moment for Taiwan to regain the initiative over Beijing anywhere else. This election was the Colorado Party demonstrating its dominance over Paraguayan politics. That long-term single party dominance is an exception in the region, not symbolic of any broader trend.

However, one trend that is perhaps relevant for both Paraguay and the region is the rise of a rightwing populist from outside the political establishment. Cubas performed better than expected and his rise and influence moving forward could represent a domestic shift against the Concertación coalition. The leftwing Frente Guasu is less likely to form a coalition with the moderates in the future, further splintering the opposition. Cubas’ angry campaign represented a new anti-system third force in the country that has been seen elsewhere including Bolsonaro in Brazil, Hernández in Colombia, and Milei in Argentina.

Governance Outlook

Even though Peña is a fresher face for the Colorado Party, he will struggle to separate himself from the party of the past. Similar to other Latin American presidents who won elections as a fresh face for their troubled parties (figures like Enrique Peña Nieto or Iván Duque), Peña’s technocratic inclinations that play well with the DC think-tank crowd may not be enough to overcome the Colorado Party’s fundamental issues with corruption, oligarchy, and elite capture, as well as the internal party divides that will persist.

Peña rose to prominence in the party through his ties to former President Horacio Cartes, and Cartes is a huge liability for Peña. Cartes appointed Peña as his finance minister during his term as President, and Cartes anointed Peña as his chosen candidate for the 2023 cycle. Cartes was sanctioned by the Department of State in July 2022 for obstructing a transnational criminal investigation in order to protect himself and a close associate, and he was designated again by the Department of Treasury in January 2023 for much wider corruption allegations. Cartes, not Peña, will remain the key powerbroker in the Congress, forcing Peña to remain loyal if he wants to get his agenda passed.

President Abdo put aside his differences with Cartes and supported Peña’s run for the presidency. That support from Abdo occurred even as Peña used his disagreements with Abdo to portray himself as running against the current president in a small way that let him thrive in the anti-incumbent environment. That Colorado Party unity was crucial for the victory, but it may not last long. Abdo controls a small but significant portion of the party machine and he may be looking for revenge given how Cartes undermined Abdo at key moments during his term.

In the short term, Cubas is leading protests against fraud and questioning the legitimacy of the election from his third place position. That type of protest, while lacking significant support today, plays into the anti-incumbent and anti-establishment mood of the country. A plurality voted for Peña, but that doesn’t mean many people are thrilled about continuity. Early opposition from both the left and right could undermine the new president’s claim on a mandate and erode his public support.

Unless Peña gets some quick victories on the economy or security, he is likely to have a short honeymoon and discontent will once again rise. That has been a trend across Latin America and will likely be repeated in Paraguay. The Colorado Party is good at winning elections and controlling institutions, but their ability to popularly govern has been limited for a decade and that will likely remain true under the Peña administration.

By Boz and Lucy Hale

MAY 2, 2023

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