Image: Paraguay's Lugo
Elements on Paraguay's left and right are expected to challenge the authority of President Fernando Lugo.
updated 8/15/2008 10:30:49 AM ET 2008-08-15T14:30:49

Leftist ex-bishop Fernando Lugo was inaugurated Friday as Paraguay's president, ending six decades of one-party rule in a key step in the poor South American nation's democratic transformation.

Tens of thousands of Paraguayans cheered as the tieless, sandal-clad Lugo raised his hand in the air and was sworn in, addressing the crowd in both Spanish and the Guarani indigenous language from a huge stage in front of Congress.

Lugo pledged to do away with the misery and corruption that has defined the desperately poor nation under the Colorado Party, which supported the brutal 1954-1989 dictatorship of Alfredo Stroessner.

"Today Paraguay breaks with its reputation for corruption, breaks with the few feudal lords of the past," said the 57-year-old Lugo, who shaved off most of his trademark beard but stuck with a goatee for the ceremony attended by eight Latin American leaders and Taiwan's president.

Difficult challenge
He faces obstacles in his bid for land reform and must avoid political chaos and civil unrest as elements on the left and right challenge his authority.

Landless peasants who have been seizing private property are threatening a much larger wave of invasions as early as this weekend. Members of his team also suspect the outgoing government tried undermine his presidency before it began by allowing critical supplies of fuel and medicine to disappear.

Incoming interior minister Rafael Filizzola suspects at least one land invasion was financed by Lugo's right-wing opponents. "There are backward-looking factions within this party who aspire to come back to power early and not democratically," Filizzola said.

The conservative Colorado Party still dominates most government institutions in the small landlocked country, where corruption is entrenched and just 1 percent of the population controls 77 percent of the land.

Outgoing president Nicanor Duarte promised this week that he "will not sabotage Fernando Lugo nor create a climate of hostility during his term." But he also criticized Lugo's cabinet choices, and insisted that his conservative Colorado Party will continue to be a strong force throughout the country despite losing the presidency.

Transforming Paraguayan society "won't be easy, but it's not impossible," Lugo said Friday.

There are so few job opportunities in the nation of 6.8 million that many have abandoned the country altogether. The $500 million Paraguayans sent home last year represents more than all foreign investment in the country, according to the World Bank, and plays an outsize role in an economy otherwise dominated by soy farms and black-market trading in electronics.

Reputation as honest man
What Lugo has in his favor is a tremendous desire among Paraguayans for a more just and equal society, and his own reputation, formed through decades of work with poor parishioners, as an honest man.

Tall, bearded, mild-mannered and soft-spoken, Lugo is greeted at public appearances like a rock star, and he has sought to reassure his fans that politics won't co-opt him. He says he won't get married during his five-year term, even though the pope released him from his vows of chastity.

Lugo is under pressure to make changes fast, but analysts don't expect him to govern with sudden decrees like the continent's hardcore leftists, Bolivia's Evo Morales and Venezuela's Hugo Chavez. They predict he will seek broad support for reforms, in the style of Luiz Inacio Lula da Silva, Brazil's center-leftist president.

Aims for warm ties with U.S.
As for the United States, Lugo has warned that Paraguay won't accept outside meddling in national affairs, but will try to maintain warm relations with Washington.

About the only power Lugo has under Paraguay's constitution to enact change without approval from Congress is the ability to impose a state of emergency. But that's something few expect from Lugo, a firm opponent of the long and brutal dictatorship of Alfredo Stroessner, whose rule from 1954 to 1989 was backed by the Colorados.

While Lugo's view of the world is rooted in leftist liberation theology, he's also known as a consensus-builder, skills that paid off this week when he persuaded the third-place finisher in the presidential race, right-wing retired general Lino Cesar Oviedo, to join his diverse coalition of leftists and conservatives and give him a majority in Congress.

This delicate coalition now gives Lugo's legislative agenda a chance.

Still, experts predict only limited progress on land reform, since wealthy landowners can count on the support of Colorado Party governors, mayors, lawmakers and judges, as well as lawmakers loyal to Oviedo.

Lugo doesn't have Silva's back-room bargaining credentials as a former labor leader, but his alliance with Oviedo shows he understands practical politics, said Michael Shifter, an analyst with the Washington-based Inter-American Dialogue think tank.

"He is realizing that sometimes you have to deal with the devil to govern," he said. "Lugo probably concluded he needed at least short-term marriage of convenience to get things done during the first 100 days that will be critical to get political traction and momentum."

Concessions to Brazil?
The one proposal all parties support — persuading Brazil to pay more for cheap electrical power from a massive dam straddling their border — depends on Brazil. Lugo is insisting on concessions, and Brazilian officials, while refusing to change the long-term energy contract, said they are ready to help their poorer neighbor with a loan for badly needed transmission lines.

In a move that suggests he won't manage the economy like Morales or Chavez, Lugo asked austerity-minded former economy minister Dionisio Borda to lead his economic team. Borda, who served from 2003-2006, "is a pretty conventional economist. He's going to be reassuring to investors and the international financial community," Shifter said.

The main question is whether Lugo can guide competing interests into achieving much of anything.

"The optimistic scenario is he won't accomplish much but he will be well regarded and respected by the people as a president who is not corrupt and does not take bribes," said Tatiana Rizova, a Paraguay expert who teaches political science at Christopher Newport University in Virginia.

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