Political environment after the 2023 elections in Paraguay

This year's elections in Paraguay were won by Santiago Peña by a large margin. The Liberals, represented by Efrain Alegre, suffered a crushing defeat. Most of the votes from dissatisfied citizens, who were unhappy with the system, went to the radical scandalizer Payo Cubas, instead of the Liberals. In other words, many disgruntled people who might have voted for Efrain ended up voting for Cubas. Meanwhile, the disgruntled "Colorads" mostly supported Peña anyway. This created speculation that Cubas was actually a "satellite" from Cartes (Former President who supported Santiago Peña). Of course, such a hypothesis has a right to life, but it is too convenient for the "bureaucratic aristocracy" of the Liberal Party, which has been unable to provide any interesting ideology worth voting for. Not to mention the fact that the party has spent almost a decade and a half constantly showing only Efrain as indispensable to the movement, trying to convince or force everyone to support only him. At the same time, they use rhetoric to criticize "authoritarian Colorads," "corruption in power," and "narcos among politicians." As expected, after the election, this resulted in a power crisis within the Liberal Party. They began to demand a renewal of the top leadership and Efrain's resignation as party president. Efrain responded with his old song that it was the "Colorads" among the Liberals who were trying to illegally overthrow him and that he would not give the Liberal Party "into the hands of Cartes." This behavior is very familiar from Efrain.

On the other hand, after the election, supporters of Cubas had a short riot with the authorities, which resulted in Cubas' imprisonment and the opening of criminal cases against the most active participants. While Cubas was in prison, a split occurred within his movement. People who had joined Congress and Parliament suddenly disassociated themselves from the movement and joined the ranks of the Colorads. Only Cubas' wife and someone else remained faithful to the principles of the movement. In a sense, the discontent of society was expressed through Cubas, and in the end, the whole anti-system performance turned out to be a farce. Members of his movement, upon coming to power, became immediately "pragmatic." Cubas accused them of treachery and venality and expelled them from the party, but there was nothing more he could do. The parliament and congress for the period 2023-2028 will be dominated by Colorads. To save the situation, the liberals will rally around their "bench" ("bancadas") members of other parties who got into congress or parliament. This will not be enough to oppose the Colorads, provided that the factions within the Colorads do not conflict with each other. Either way, things are worse for them now than they were in the last election. And for the liberal/left opposition as a whole, things are worse than in 2008. They have messed up all the polymers!

The Colorads tell us that the Cartes movement will not dominate because of the existence of other "factions". For example, the "Force of the Republic" -- a faction of the now former president Mario Abdo -- was disbanded and turned into something "different", but still "for republicanism and against Cartes.”

In general, Santiago Peña is likely to pursue a foreign investment-oriented policy, as was the case under his former boss Cartes (2013-2018). In September, a law was signed to create the Ministry of Economy and Finance, merging the Tax (SET), Ministry of Finance (Ministerio de Hacienda), Customs (Aduanas), and Ministry of Economic Development (la Secretaría Técnica de Planificación del Desarrollo Económico y Social). The databases of the mentioned ministries will be merged, and it will no longer be possible for companies to declare an income of $50,000 at the tax office and import goods worth $150,000, as some companies could do before. The trend of control over tax collection continues, and perhaps customs will be "digitalized," following the example of the tax office. Hopefully, Customs will soon cease to be a corrupt voodoo hole.

The merger itself is an idea to simplify bureaucracy and concentrate efforts in the hands of one ministry to plan the development of the economy as a whole.
At the foreign policy level, Santiago Peña spoke out against Russia's aggression towards Ukraine when he assumed office. It was the first time since the beginning of the war that a Paraguayan president labeled one of the parties as the aggressor. He compared the war in Ukraine to the war of the Triple Alliance. Most likely, this rhetoric is aimed at improving relations with the U.S. after the domestic political crisis of recent years, during which the U.S. accused former President Cartes of having ties with Hezbollah, helping Iranians, money laundering, and corruption. As a result, Cartes and his companies have come under sanctions. Given the country's distance from Russia and Ukraine, it is unlikely to expect anything serious besides political rhetoric.

In addition, Santiago Peña plans to restore diplomatic relations with Venezuela and resolve the issue of the $300 million debt that the Paraguayan company Petropar owes to the Venezuelan oil company PDVSA, under Maduro.

Another significant foreign policy development is the issue of harmonization of prices for electricity from the Itaipu hydroelectric plant with Brazil under President Lula da Silva, and the resolution of the river conflict with Argentina, which has worsened before the upcoming October elections.

Peña's victory promises us the next five years of "stable Colorado republicanism" in Paraguay,
aimed at increasing foreign investment in the country and the creation of industries. Time will tell.
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