A River for Freedom: The Itaipu Hyrdoelectric Project and the Democratization of Paraguay

Introduction

From 1954 to 1989, Paraguay was subject to the authoritarian regime of Alfredo Stroessner and the Colorado Party. While Stroessner came to power at a time of great economic strife, it was the most prosperous time of his regime that led to his downfall – the construction of the Itaipú hydroelectric project on the Paraguay-Brazil border. While the project gave temporary prosperity to the country, its completion led to economic stagnation and gave opportunistic individuals the capital necessary to take over the party and position themselves to succeed Stroessner. These militantes, “perhaps the most corrupt, repressive and authoritarian element of the Colorado Party,”1 alienated the base of the Colorados and inspired enough discontent for their opponents to stage a coup and send Stroessner into exile. While democratization was low on the list of priorities, Stroessner’s fall combined with international pressure opened the door to democratization – and the Itaipú dam made it possible.

History of the Stroessner Regime

On May 4, 1954, General Alfredo Stroessner of the Portuguese army executed a coup which overthrew then-President Federico Chávez and placed an interim president in power. Three months later, a one-man election was held, marking the beginning of the 35-year Stroessner regime2. Stroessner used repression, contraband, and corruption to form an iron triangle of himself, the armed forces, and the Colorado Party – the only powerful political party at the time, and at times the only one allowed by the government. (Under Stroessner, party membership was compulsory for all government employees and members of the military.) Stroessner had the power to appoint judges, dissolve the Congress, and declare a state of emergency in order to circumvent the constitution.3 This monolithic structure was the key to Stroessner’s success, as it provided him complete control over virtually all aspects of Paraguayan politics: an example of this was the 1967 constitutional convention, in which the constitution was amended to allow Stroessner to “run” for president two more times4. Stroessner was literally the centerpiece of Paraguayan politics; opposition was futile, and would only be met by arrest, torture, death and exile.5 As a result, for decades many believed that they would never see another ruler of Paraguay, and it would be some time before that view changed.

The Itaipú Hydroelectric Project and the Paraguayan Economy

In the 1970s, a massive joint Paraguayan-Brazilian project was launched – the construction of the Itaipú Dam, which to this day remains the largest hydroelectric dam in the world.6 The project brought quick economic growth to Paraguay, peaking at GDP increases of over 11% between 1977 and 1980.7 Along with this growth came high rates of employment, improved living standards, and an implied support for Stroessner’s regime8 – when the economy is booming, people are less likely to complain.

However, Paraguay was largely unable to take advantage of its share of the electricity produced by the project – resistance from “rural elites”9 prevented the country from industrializing. Instead, agriculture became an area of focus, primarily cotton and soybean production. This became a problem: as the construction of Itaipú and the economic stimulus it provided drew to a close, the region was entering a recession and worldwide soybean and cotton prices were plummeting.10 This led Paraguay into a very shaky economic state.

In the early 1980s, the Paraguayan economy was in chaos. Inflation hit 28.1% in 1979, and dropped only slightly to 22.4% in 1980.11 GNP began to decline in 1981, and for the two years following the country experienced negative growth rates. Foreign debt was rising, and without foreign capital for Itaipú to offset it, it reached over 50% of Paraguay’s GNP by 1988.12 This led to widespread criticism of Stroessner’s economic policies, as well as increased social mobilization – both of the populace and within the Colorado Party.

Fall of the Stroessner Regime

As Paraguay dealt with its economic crisis, the rest of Latin America was experiencing Samuel Huntington’s “third wave” of democratization. Despite mounting pressure from the United States, a former ally, Stroessner refused to liberalize his government, so the U.S. sought “more drastic measures” to stabilize Paraguay and open the door to democracy.13 However, it was not the United States who brought an end to Stroessner’s authoritarian rule. The final blow came from a completely unexpected direction – the Paraguayan military.

Empowered by “wealth and patronage” from the construction of Itaipú, a faction of the Colorado Party known as the militantes began to ascend through the ranks of local party elections. The militantes essentially masqueraded as ultra-conservative Stroessner supporters, and as a result gained Stroessner’s support in their “openly fraudulent” ascendancy to control of the Colorado Party.14

The militantes were not content to remain in control of just the party, however. The faction exerted their political will through the Colorado Party to take control of the armed forces –retiring dozens of officers and making political promotions, including Stroessner’s son Gustavo, in preparation to succeed Stroessner upon his death. This led to resentment and factionalism in the military, as well as increasing alarm at the prospect that the militantes would fill the power vacuum left in Stroessner’s wake.

This idea was repulsive enough to inspire a coalition of widespread interests: the traditionalista faction of the Colorado Party, military, business, the Catholic Church, the United States, and the various opposition parties all solidly opposed the militantes. When Stroessner tried to retire his military rival, General Andrés Rodriguez, there was widespread support for what was by then inevitable. Rodriguez struck back against Stroessner, and on February 3, 1989, Stroessner was overthrown and exiled to Brazil after ten hours of bloody fighting.15 Stroessner remained in Brazil until his death in 2006.

The Transition Towards Democracy

Political scientist Guillermo O’Donnell argues that democratic transitions can be broken up into two phases. The first phase is the dissolution of the authoritarian regime, culminating in the establishment of a government elected in a free and fair election which guarantees “traditional democratic rights and liberties.” The second is moving from that first democratic government towards democratic consolidation – the ideological and political shift from authoritarianism to true democracy in all parts of government.16

For Paraguay, the first phase was very short – although there were irregularities, democratic elections occurred in May 1989, just three months after General Rodriguez took power. The goals of the new government had little to do with democratization, however – even Rodriguez admitted that the coup’s objectives were “the defence of the dignity of the armed forces and the full and total reunification of the Colorado Party.” Indeed, the 1989 election was criticized by the international community and resulted in a predictable win for the Colorados. However, elections in 1991 and 1993 resulted in losses at the municipal level and a very narrow presidential win, showing that Paraguayans were ready for change and were willing to use their increasing democratic rights to move towards it.17

Recent Developments and Future Prospects

The past year has brought important strides in the movement towards democracy in Paraguay. After 61 years of Colorado Party rule, the people of Paraguay held a free and fair election in which a member of the Patriotic Alliance for Change (a coalition of leftist parties and movements) was elected to the presidency. Fernando Lugo, a community organizer and former bishop, gained 41% of the vote in an election characterized as “as much a reflection of the Colorado’s costly mistakes as it was of Lugo’s success.” The former president, Nicanor Duarte, tried to amend the constitution to allow himself to run again (he had reached his term limit); this attempt failed, and caused his popularity to plummet from a former 70% in 2003-2005 to only 5% by April 2008. After he backed his former education minister for the presidency, a rift formed in the Colorado Party –a vote for his endorsee was seen as a vote for him, so many Colorados chose to vote for Lugo instead.18

In a sense, Lugo is similar to Barack Obama. He is seen as a reformer who will actually keep his campaign promises (unlike previous politicians), because as a “man of God” he actually cares about the poor and oppressed people of Paraguay. He committed himself to a platform of anti-corruption, social and economic change (including reforming the unequal distribution of land in the country), and national sovereignty, the latter being focused primarily on renegotiation of Paraguay’s hydroelectric projects with Brazil and Argentina – including the Itaipú dam. Lugo believes that the larger countries took advantage of Paraguay, and that control of these massive projects needs to be reevaluated.19

Unlike Obama, however, Lugo has a fairly weak base of support in the populace and in government. The government is still dominated by members of the Colorado party, and Colorados still hold a plurality of seats in Paraguay’s Congress. His party is “ideologically fragmented,” and he will have to work closely with other parties in order for his reforms to be successful. However, Lugo has significant political capital due to his popular support, and his actions over the next five years have the potential to forever change Paraguay into a true democracy.

Conclusion

The Itaipú hydroelectric project sent a shock through the Paraguayan economy, causing economic and social unrest and empowering the militantes to implement their plan to succeed Stroessner. While Itaipú was an important factor in creating the conditions for democratization, it was neither necessary nor sufficient to end the Stroessner regime, weaken the Colorado Party, or begin the process of democratization; in a vacuum, Itaipú would have changed little in the political sphere. However, its economic impact was combined with a number of external forces: the wave of democratization in Latin America, pressure from the United States, the economic problems of the region, and the militantes’ desire for power. Together, these were able to break the second-longest dictatorship of the 20th century20 and begin the long process of democratization in Paraguay. While this process is by no means over, the outcome of the 2008 elections are promising, and there is excellent potential for Paraguay to have a truly democratic future.

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Selected bibliography

Abente, Diego. "Stronismo, Post-Stronismo and the Prospects for Democratization in Paraguay." Working paper. Kellogg Institute for International Studies. University of Notre Dame, March 1989. http://nd.edu/~kellogg/publications/workingpapers/WPS/119.pdf (accessed February 15, 2009).

Baer, Werner, and Luis Breuer. "From Inward- to Outward-Oriented Growth: Paraguay in the 1980s." Journal of Interamerican Studies and World Affairs 28, no. 3 (Fall 1986): 125-140.

Brun, Diego Abente. "'People Power' In Paraguay." Journal of Democracy 10, no. 3 (1999): 93-100. http://muse.jhu.edu/journals/journal_of_democracy/v010/10.3abente-brun.html (accessed April 5, 2009).

– – –. “Uruguay and Paraguay: An Arduous Transition.” In Latin America: Its Problems and Its Promise, edited by Jan Knippers Black, 556-579. 4th ed. USA: Westview Press, 2005.

Díaz, Natalia Ruiz. "POLITICS-PARAGUAY: Twenty Years of Transition." Inter Press Service, February 2, 2009. http://www.ipsnews.net/news.asp?idnews=45648 (accessed February 14, 2009).

Huntington, Samuel P. The Third Wave: Democratization in the Late Twentieth Century. Norman, OK: University of Oklahoma Press, 1991.

Kelly, Philip, and Thomas Whigham. “Democracy in Bolivia and Paraguay: A Comparison.” In Assessing Democracy in Latin America, 293-303. Boulder, CO: Westview Press, 1998.

Lambert, Peter. "A New Era for Paraguay." NACLA Report on the Americas 41, no. 4 (July 2008): 5-8. Academic Search Alumni Edition, EBSCOhost (accessed April 5, 2009).

– – –. "Assessing the Transition." In The Transition to Democracy in Paraguay, edited by Peter Lambert and Andrew Nickson, 200-213. Latin American Studies Series. Ipswich, U.K.: Macmillan Press Ltd, 1997.

– – –. "The Regime of Alfredo Stroessner." In The Transition to Democracy in Paraguay, edited by Peter Lambert and Andrew Nickson, 3-23. Latin American Studies Series. Ipswich, U.K.: Macmillan Press Ltd, 1997.

Linz, Juan J, and Alfred Stepan. "Toward Consolidated Democracies ." Journal of Democracy 7, no. 2 (1996): 14-33. doi:10.1353/jod.1996.0031 (accessed April 6, 2009).

Lopez, Angelina. "The Crossroads of Past and Present: Stroessner’s Longevity in Paraguay as a Product of Supports for his Hybrid Regime." Macalester College Undergraduate Journal of Political Science 3 (Spring 2006): 41-51. http://www.macalester.edu/politicalscience/ Journals/pisigmaalpha.s06.pdf (accessed April 5, 2009).

Mora, Frank O. "From Dictatorship to Democracy: The US and Regime Change in Paraguay, 1954-1994." Bulletin of Latin American Research 17, no. 1 (January 1998): 59-79.

Nickson, R. Andrew. "The Itaipú Hydro-Electric Project: The Paraguayan Perspective." Bulletin of Latin American Research 2, no. 1 (October 1982): 1-20.

Roett, Riordan. "Paraguay After Stroessner." Foreign Affairs 68, no. 2 (Spring 1989): 124-142. Business Source Premier, EBSCOhost (accessed April 5, 2009).

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1.) Peter Lambert, "The Regime of Alfredo Stroessner," in The Transition to Democracy in Paraguay, ed. Peter Lambert and Andrew Nickson, Latin American Studies Series (Ipswich, U.K.: Macmillan Press Ltd, 1997), 18.

2.) Diego Abente Brun, "Uruguay and Paraguay: An Arduous Transition," in Latin America: Its Problems and Its Promise, ed. Jan Knippers Black, 4th ed. (USA: Westview Press, 2005), 568.

3.) Lambert, “The Regime,”

4.) Brun, “Uruguay and Paraguay,” 571.

5.) Lambert, “The Regime,” 9.

6.) Werner Baer and Luis Breuer, "From Inward- to Outward-Oriented Growth: Paraguay in the 1980s," Journal of Interamerican Studies and World Affairs 28, no. 3 (Fall 1986): 126.

7.) Ibid, 127.

8.) Lambert, “The Regime,” 10.

9.) Ibid.

10.) Ibid, 11; Baer 132-34.

11.) The official inflation rate dropped to 13% in 1981, but there is some question as to the reality of that number.

12.) Brun, “Uruguay and Paraguay,” 570.

13.) Lambert, “The Regime,” 17.

14.) Ibid, 18.

15.) Ibid, 18-19; Brun, “Uruguay and Paraguay,” 573

16.) Peter Lambert, "Assessing the Transition," in The Transition to Democracy in Paraguay, 201; Juan J Linz and Alfred Stepan, "Toward Consolidated Democracies," Journal of Democracy 7, no. 2 (1996)

17.) Ibid., 201-203

18.) Peter Lambert, "A New Era for Paraguay," NACLA Report on the Americas 41, no. 4 (July 2008): 5-6.

19.) Ibid, 8.

20.) Stroessner was in power from 1954-1989; Fidel Castro ruled Cuba from 1959-2008.