For another thing, and this is quite a complex issue, it makes the major opposition party -PLRA- take a more definite stance in terms of one of the strategies of a movement within the Partido Colorado and this is one of the PRLA’s major setbacks throughout this long transition in Paraguay -being deprived of their own identity as an opposition party. Consequently, it always appears backing a strategy from the internal sectors of the Partido Colorado. And this is a fundamental feature of the Partido Colorado in Paraguay, which throughout the transition period has always managed to retain a ruling wing and the most critical wing of the ruling party thus diluting the opposition’s stance among the existing alternatives for citizens and undermining the PLRA as a weak choice against the Partido Colorado. Before the elections the colorados join and win again and produce the same splitting process between a ruling wing and an opposing wing thus diluting the possibilities for an opposing identity of the PLRA.

Now, with the ‘patriotic front’ it seems the PLRA has taken a stance that sparks internal problems within the party in terms that some PLRA sectors that reject all kinds of compromise with the oviedismo and also a strong sector of society that disagrees with Oviedo’s messianic stances or with the oviedista movement. So on the one hand, this strategy splits the Partido Colorado, and on the other it splits the PLRA as well.

Do you believe the internal rifts in the Partido Liberal may deepen or you think they will be overcome?

I view few possibilities for the Patriotic Front. Right now Paraguay is experiencing another series of strong tensions at the level of farmers. The National Farmers’ Coordination Board (MCNOC in its Spanish acronym) has been blocking the routes for 10 days. The last roadblock was quite strong and there were around 15km of vehicles unable to pass.

For another thing, there’s a series of immediate problems such as a diesel oil hike to 1,350 guaraníes, a 4% inflation rate in July -which may have a strong impact on price increase. The dollar shot up from 3,600 right now to 4,300 guaraníes a dollar which has a direct impact on the cost of some services and especially debts contracted in dollars, which increases the impact on price hikes.

On the other hand, the fiscal deficit is staggeringly high and today we stand at 4% GDP in relation to the fiscal deficit while in an attempt to seek a solution to the need for new fiscal revenues, government is proposing to levy an income tax on credit unions, which in Paraguay are strongly protesting and intending to launch a protest on August 16 if the bill is passed in Congress.

In other words, this situation gives rise to the instability that at some point may resound in the stability of an administration full of disgrace, faltering leadership, incapable to project a clear response to the country and consequently this situation may prompt an impasse or stand-off that might in turn affect the political system.

‘The strongest guarantee for President González Macchi’s permanence in power
is not his performance but having a PLRA Vice-president’

Besides, the privatizations plan has been implemented for long in the fields of telephony and water and seems this month the first dismissals would start adding to the internal tension existing in Paraguay. If this tension gives rise to strong demands with a political system and scheme where the President has little leadership and a considerable discredit .

Speaking of the foreign front, why is Paraguay affected by the Argentine crisis? The guaraní has reached a minimum floor. What do economists predict for the mid-term considering what may happen in Argentina?

In general, here the situation in the last Mercosur Summit meeting in Asunción was used by the industrial sector to call for Paraguay’s exit from Mercosur, a choice proposed by a negotiating strategy at because I think the intention was to negotiate a better position in terms of the existing conflicts between Brazil and Argentina.

Anyway, it seems that is being controlled. The Argentine crisis has a strong impact on Paraguay and this impact is also reflected in the dollar price increase, which is a difficult situation for a 0 growth economy.

If the lack of governance worsens, what are the likely scenarios regarding the alliance of the liberals with a sector of colorados for one, and the regrouping of colorados internally?

Now, the other factor countries like ours open to foreign influences should always have is the positioning of the international community generally prone to accept President’s González Macchi’s continuity in office until 2003. For another thing, the urgency within the Partido Colorado for the leadership of current President Nicanor Duarte Frutos, who seems likely to reach a relative success in the 2003 elections.

Regarding what the international community said, the perception abroad is that if there was a solution within the institutional framework, the international community would not oppose. What is your opinion in this respect?

Perhaps but it is almost imposible that may occur because of a simple thing: an institutional solution entails González Macchi’s exit and consequently the Vice-president’s ascent -he is from the liberal party- to the Presidency of the Republic. This passage of the Vice-president -from the PLRA- to the Presidency would have to enjoy the support of a majority sector of the Partido Colorado, which I truly think is quite unlikely.

Never before in Paraguay’s history since its independence until now has a political party ceded -via elections- power to another party. So it is very difficult that the Partido Colorado, or at least a majority of it, should have to vote against its own party to allow a PLRA representative access to the Presidency of the Republic. So the most certain guarantee for President Macchi’s permanence in power is not his own term-of-office but having a PLRA vice-president. I believe if the vice-president had been from the Partido Colorado, by now the president would be enjoying his deserved vacation many Paraguayans want him to take as soon as possible.