The Paraguayan Model

On June 22nd, Paraguay quickly impeached its leftist President, Lugo, and installed vice President Franco (from a right of center party), as the new President. A month later, the new President's government pushed forward negotiations with Rio Tinto Alcan for building a huge aluminum plant on the Parana River. It offered $700 million in infrastructure to enable the plant's construction, and agreed to thirty years of subsidizing its electricity supply from its two hydroelectric facilities, enough power to provide electricity to 9.6 million people, while many Paraguayans go without. All this for 2,500 jobs at a cost of about $560,000/job up front..

Former President Lugo had blocked Rio Tinto.

The former President had also blocked Monsanto's application to plant GM. Franco approved it, meaning that large-scale agriculture will continue to dominate the country, in tandem with Monsanto; the majority of landless peasants will continue to be excluded from landownership.

CBS played up, however, Franco's claim of issuing 79 land titles to landless people in his first 15 days in office, while the former government issued only 3 in six months, but it was the dispute over land reform that did in the former President. He had favored land reform, but had been unable to implement it, because of opposition by large landowners, including foreign corporations. The opposition blamed President Lugo for a confrontation between police and land occupiers in which seven police and 11 occupying peasants died. Lugo was impeached by Congress one day and expelled from office by the Senate the next, giving him only two hours to defend himself.

Large multinational corporations benefited from the change in government almost immediately. At the same time, Latin America's Mercosur governments, Argentina, Brazil, Uruguay and applying member, Venezuela have all denounced the "coup" and withdrawn their ambassadors.

The US pretends to be neutral, just as it was in Honduras, before recognizing the coup regime there, also a pro-business takeover.

Land ownership in Paraguay is even more extreme than the US's unequal distribution of wealth. Much of the land held by the elites was expropriated (sometimes violently) from campesinos who had lived and worked it; they held no legal title: it had been common land, or traditional landholding. Large tracts have been converted into agribusiness holdings, with widespread use of GM soy and intensive spraying of pesticides and herbicides. The toxins have literally driven out neighboring campesinos.

In both Honduras and Paraguay, their takeovers put a small elite, backed by foreign corporations, back in control after a short-lived challenge to their power.

Will the US do something similar through unlimited billionaire and corporate campaign funds? Paraguay looks more like Fifth Century Roman society than does the US, so the parallels between the US and Paraguay highlight US similarities to Roman Senators' takeover of all wealth and power prior to Rome's fall.