Paraguay | Freedom House

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Freedom in the World 2010

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President Fernando Lugo’s election last year raised the expectation of social improvement for Paraguay’s poor population. However, Lugo struggled to advance his reform agenda given his increasingly weak and unwieldy Patriotic Alliance for Change (APC) coalition and an obstructive Congress. After its principle conservative party left in July, the ruling coalition lost its majority in Congress. Meanwhile, corruption in the judiciary and conflict between landowners and peasants continued during the year.

Paraguay, which achieved independence from Spain in 1811, has been racked by a series of crises since authoritarian president Alfredo Stroessner of the right-wing Colorado Party was ousted in 1989 after 35 years in power. The fragility of the country’s emerging democratic institutions resulted in nearly 15 years of popular uprisings, military mutinies, antigovernment demonstrations, bitter political rivalries, and continued rule by the Colorados.
Senate leader Luis Gonzalez Macchi assumed the presidency in 1999 after the incumbent fled the country amid murder charges. In December 2002, GonzalezMacchi offered to leave office early to avoid pending impeachment hearings against him for embezzlement. GonzalezMacchi and many other members of theColorado Partywere also discredited by their failed efforts to reverse the country’s downward economic spiral.
Former education minister Nicanor Duarte Frutos of the Colorado Party emerged victorious in thenational elections of 2003. After taking office, Duarte moved to take control of the tax, port, and customs authorities to combat tax evasion and smuggling. Paraguay has a highly dollarized banking system, which facilitates the illegal transfer of funds to offshore accounts. This tax evasion as well as prevalent corruption deprived the state ofabout two-thirds of its legitimate revenues. Despite the difficult political environment, Duarte made some progress on his fiscal and tax-reform agenda. In addition to a major tax-reform bill passed in 2004, a personal income tax was enactedby Congress in January 2007. A 2006 standby agreement with the International Monetary Fund (IMF) boosted investor confidence in Paraguay.
Fernando Lugo, leader of the Patriotic Alliance for Change (APC) coalition—a heterogeneous coalition comprising 20 parties including Christian Democrats, socialists, communists and peasant organizations—was elected president in April 2008. Lugo’s election represented widespread disappointment in the Colorado party which had failed to address Paraguay’s intractable problems of low public security, slow economic growth, endemic public corruption, and a poverty rate of more than 35 percent. His election also raised expectations that the standard of living for Paraguay's poor majority would improve. Land reform necessary to address Paraguay’s highly skewed land distribution remains one of the administration’s principle goals. However, in the 2009 UN Development Programme’s Human Development Report, Paraguay was ranked 101 out of 182 countries in its Gini Index (measuring income inequality)—worse than nearby Ecuador, Peru, and Brazil.
Prospects for Lugo’s reforms were dealt a blow when the coalition’s largest member party—the conservative Authentic Liberal Radical Party (PLRA)—left the alliance in July 2009. With only of various small left-wing parties remaining, the APC no longer enjoys a majority in the Congress. The legislature is now controlled by the Colorados who strongly oppose Lugo’s reformist agenda. Amid calls by Lugo’s critics for his resignation—including rumors of a pending military coup—Lugo replaced the heads of the army, navy, and air force in early November 2009.
The Lugo administration signed an historical agreement with Brazil in July 2009 which settled a decades-long dispute over payments for energy produced from the Itaipu hydroelectric dam. The agreement will triple Paraguay’s income from the dam, but the agreement had yet to be approved by the Brazilian Congress by the year’s end. Lugo has maintained a conventional economic program. However, the personal income tax which came into effect in January 2009 was suspended a couple of months later following a Congressional defeat; it will not be changed until 2010 at the earliest.
Political Rights and Civil Liberties: 

Paraguay is an electoral democracy. The 2008 national elections were considered to be free and fair. The 1992 constitution provides for a president, a vice president, and a bicameral Congress, consisting of a 45-member Senate and an 80-member Chamber of Deputies, all elected for five-year terms. The president is elected by a simple majority vote, and reelection is prohibited. The constitution bans the active-duty military from engaging in politics.
Before Fernando Lugo and the APC came to power in 2008, the Colorado Party ruled Paraguay for over 60 years.The other major political groupings include the PLRA, the Beloved Fatherland Party, the National Union of Ethical Citizens, and the National Agreement Party.
Corruption cases languish for years in the courts without resolution, and corruption often goes unpunished as judges favor the powerful and wealthy. The Lugo administration has pledged to increase overall transparency in government and reduce corruption, most notably in the judiciary. However, little progress was made in 2009. President Lugo was unable to depoliticize Paraguay’s corrupt Supreme Court in August 2009 when he failed in his attempt to change the informal party quota system for judicial posts. Transparency International ranked Paraguay 154 out of 180 countries surveyed in its 2009 Corruption Perceptions Index, below all other countries in the Americas save Venezuela and Haiti.
The constitution provides for freedoms of expression and the press, and the government generally respects these rights in practice. There are a number of private television and radio stations and independent newspapers but only one state-owned media outlet, Radio Nacional, which has a limited audience. Journalists investigating corruption or drug trafficking are often the victims of threats and violent attacks. This climate of insecurity showed no improvement in 2009 as harassment of journalists continued. In January, the director of a community radio station was shot and killed; press groups speculated that he was murdered for his comments on connections between local police and drug traffickers.The government does not restrict use of the internet, nor does it censor internet content.
The government generally respects freedom of religion. All religious groups are required to register with the Ministry of Education and Culture, but no controls are imposed on these groups, and many informal churches exist. The government generally does not restrict academic freedom.
Freedoms of association and assembly were undermined by the government of former president Luis Gonzalez Macchi, which tolerated threats and the use of force against the opposition. However, the constitution does guarantee these freedoms, and President Lugo has respected these rights in practice. There are numerous trade unions, although they are weak and riddled with corruption. The labor code provides for the right to strike and prohibits retribution against strikers. However, employers often illegally dismiss and harass strikers and union leaders, and the government has failed in practice to address or prevent retaliation by employers against strikers.
The judiciary, under the influence of the ruling party and the military, is highly corrupt. Courts are inefficient and political interference in the judiciary is a serious problem, with politicians routinely pressuring judges and blocking investigations. While the judiciary is nominally independent, 62 percent of judges are members of the Colorado party. In August 2008, a court cleared former general Lino Oviedo of existing assassination charges, which permitted him to compete in the presidential elections and led to allegations of political involvement in judicial decision-making. The constitution permits detention without trial until the accused hascompleted the minimum sentence for the alleged crime. Illegal detention by police and torture during incarceration still occur, particularly in rural areas. Poorly paid and corrupt police officials remain in key posts. Overcrowding, unsanitary conditions, and mistreatment of inmates are serious problems in the country’s prisons; prisons and correctional centers held 60 percent more than capacity in 2009.
The lack of security in border areas, particularly in the tri-border region adjacent to Brazil and Argentina, has allowed organized crime groups to engage in money laundering and the smuggling of weapons and narcotics. The Shiite Islamist movement Hezbollah has long been involved in narcotics and human trafficking in the largely ungoverned tri-border area; in recent years, Hezbollah has developed ties with Mexican drug cartels.
The constitution provides Paraguay’s estimated 108,000 indigenous people with the right to participate in the economic, social, and political life of the country. In practice, however,the indigenous population is unassimilated and neglected. A June 2008 census estimated that 48 percent of the indigenous were unemployed and 88 percent lacked medical coverage. Peasant organizations sometimesoccupy land illegally, and landowners often respond withdeath threats and forced evictions by hired vigilante groups. Violence between landless peasants and the predominantly Brazilian landowners practicing large-scale farming continued in 2009. However, the Itaipu agreement was expected to ease instability on the Paraguay-Brazil border.

An estimated 6 out of every 10 children born in Paraguay are not registered at birth and consequently lack access to public health and educational services. Sexual and domestic abuse of women continues to be a serious problem. Although the government generally prosecutes rape allegations and often obtains convictions, many rapes go unreported because victims fear their attackers or are concerned that the law willnot respect their privacy. Employment discrimination against women is pervasive. Trafficking in persons is proscribed by the constitution and criminalized in the penal code, but there have been occasional reports of trafficking for sexual purposes and domestic servitude.