The challenge to the hegemony of the Partido Colorado (PC) in Paraguay was but a historical blip. On Sunday, Paraguayans elected colorado businessman Horacio Cartes as their new president until 2018, returning the traditional party to power after five years in the opposition.

The Partido Colorado party draws a big crowd in Paraguay (Photo courtesy of Partido Paraguay FB)
Cartes, who admitted he had never registered to vote in a presidential election before this one, is the second political outsider in succession to lead the republic. The first, Catholic bishop and reformist Fernando Lugo, broke more than 60 years of uninterrupted PC rule – including the long dictatorship of Alfredo Stroessner between 1954 and 1989 – only to be controversially impeached by Congress on 22nd June 2012.
As the figurehead of a united leftist political front, Lugo generated considerable expectations, which, ultimately, he was unable to meet due largely to widespread opposition from the establishment, an unstable alliance with the Liberal Party (which supported Lugo’s dismissal and controlled the interim government), and an inability to capitalise on social-based movements as Latin America’s other ‘pink tide’ presidents have done.
It is the disillusionment caused by this failed leftist experiment that seems have prompted voters to return to conservatism and the PC, albeit under a promise from Cartes to renovate the party and shake up Paraguayan politics. But is this pledge credible given his background and affiliations?
The Candidate
Despite having been the candidate of the most traditional party in the country, president-elect Horacio Cartes’ meteoric rise to the top job, driven by his unease at the country’s “political course under a leftist, ‘Chavista’ government” only began in 2009, when he joined the ParCHe founded the internal faction Movimiento Honor Colorado in 2010, won the party’s primary elections in 2012, and became president of Paraguay in 2013.

Horacio Cartes wins the election in Paraguay and is now President-elect. (Photo courtesy of Horacio Cartes FB)
Born in Asunción and educated in the US, the 56-year old built an empire called Cartes Group, with interests in the banking, tobacco, textile, and stockbreeding industries, among others. He is also the president of first division football team Club Libertad, and is involved in the Paraguayan Football Association.
Cartes has pledged a fresh approach to politics, bringing business-like efficiency and ridding state institutions of corruption. However, though distanced from the historically murky politics of the past, his success in business has not been without controversy. Cartes has been accused of contraband, drug trafficking, and money laundering, and has been investigated by the Brazilian parliament and the US Drug Enforcement Agency (DEA), though he has never been formally charged.
In the ’80s, he escaped the country for four years, accused of being part of an illegal scheme to obtain US dollars, and was eventually imprisoned for a few months, before being released. Cartes claims he was being persecuted by Stroessner’s dictatorship at the time.
More recently, in 2000, a private plane carrying cocaine and marijuana was found on one of his estancias, while a Wikileaks-leaked diplomatic cable sent from the US Embassy in Buenos Aires to Washington in 2010 alleged that Cartes was a leading figure in a major money laundering operation in the tri-border area.
Cartes dismissed stories from a murky past as “anecdotes” during the campaign, pointing out repeatedly that he had never been charged with any crime. It was a tactic that paid off.
Cartes also dodged accusation by Lugo’s supporters that he was behind the so-called ‘parliamentary coup’ that ousted the former president last year. An alleged alliance between Lugo and the colorado leader, Cartes’ internal rival- Lilian Samaniego, could have strengthened both before the 2013 elections, to the detriment of Cartes, and his faction of the PC was the first to call for impeachment proceedings.
Cartes, however, later distanced himself from the ‘coup’, tacitly supporting Franco while refusing to enter into an alliance with the liberals and letting them bear the weight of public office by themselves. Franco’s short time in government, in which he reversed many of Lugo’s policies, was not enough to convince Paraguayans of their skills, or their honesty, and liberal candidate Efraín Alegre came second in the polls.
The Challenges
Looking at the cold numbers, it could seem that Cartes will not have much to worry about in terms of the economy -Paraguay’s GDP is forecast to grow between 10 and 13% this year, leading economic growth in the region.

Soy is the main crop in Paraguayan agriculture. (Photo: Beatrice Murch)
The Paraguayan economy has enjoyed almost a decade of economic expansion at high rates -some of the highest in Latin America. However, many wonder how sustainable the current economic model is in the long term. The sector responsible for the country’s growth has been agriculture, driven by the production of meat and, mainly, soy.
Agriculture makes up 22% of the country’s GDP, but it is not a labour-intensive activity. In Paraguay, employment in the agricultural sector is low even by regional standards. And while growth in this sector has had a positive impact on related industries, such as construction, trade, and services, the expansion has not trickled down to the economy as a whole, nor has it contributed much to reducing the alarmingly high levels of poverty and inequality. While in 2001 poverty stood at 61%, ten years later it had decreased to 49.6% -a reduction of barely more than a percentage point per year. Extreme poverty still affects an estimated 28% of Paraguayans.
Adding to the problem of low employment in the agricultural sector is the issue of massive land concentration: 2% of the population owns 80% of the land, and many large landowners are foreigners, particularly from Brazil. The land issue has been one of the most crucial in recent years, having enourmous economic, social, and environmental consequences. Lugo’s inability to carry out a signficant agrarian reform that could correct such disparity in the access to land ownership eventually cost him the presidency – his impeachment was triggered by the death of 11 farmers and six policemen in Curuguaty, as a result of a land conflict.
Does Cartes have the will to transform Paraguay’s economic outlook, or at least to re-invest and re-distribute the massive profits made by the agricultural sector in a fairer way? As candidate, he promised to carry out a national census of agricultural producers and farmers, in order to execute a “serious and responsible” agrarian reform. “There’s not shortage of land, there’s more than enough… foreigners should be limited, they live better than our compatriots,” he said in a 2010 interview.
However, as part of the minority of major landowners – Cartes owns large swathes of the Chaco region – many rural sectors do not hold much hope for a change in their favour, especially the estimated 78,000 families that are still without land and at the centre of the current land conflicts.
The Return to Mercosur
“Your place is here, in Mercosur,” said Argentine president Cristina Fernández de Kirchner in a phone conversation with Cartes shortly after the electoral results were announced. Indeed, once the new president takes office in August, Paraguay will be welcomed back to the South American trading bloc after it was expelled following Lugo’s ousting.
Cartes has promised to rejoin Mercosur, though it will not be the same bloc that the country left last year. The Paraguayan senate had been the only thing blocking Venezuela’s membership for years, and soon after Asunción was out, Caracas was in. Cartes and his party opposed the inclusion of the Bolivarian country as a full member, but they will now have to coexist. More so than ever, the Paraguayan government will be the odd one out among the more progressive governments of Brazil, Argentina, Uruguay, and Venezuela.
Its bigger neighbours, Brazil and Argentina, will no doubt be keeping a close eye on Cartes. Despite Paraguay being one of the smallest members of Mercosur, it plays an important role in the key energy generation sector. Both Brazil and Argentina benefit from Paraguay’s large hydroelectrical potential and have important bilateral undertakings such as the Itaipú (Brazil) and Yacyretá (Argentina) dams, which supply Brazil with 17.3% of its energy, and Argentina with 15% respectively.
The Return of the Bipartisan System
In an article for Le Monde Diplomatique, Argentine sociologist Lorena Soler, who specialises in Paraguayan studies, analyses the fall of the Partido Colorado in 2008 within the context of a loss of traditional political identities and a decrease in party membership, especially among young people. This, in turn, is related to structural changes brought about by an increasing urbanisation of Paraguayan society, as a result of the expulsion of -and lack of opportunities for- rural workers in the countryside.
Though Cartes also boasts a non-traditional political background, the fact that his turn to politics came at the first break of PC dominance – under which he made his fortunes – suggests normal order will resume in Paraguay. Furthermore, the president-elect’s troubled past undermines his claims that he will clean up the corruption that has traditionally been embedded in colorado governments.
The deeply fragmented PC has regrouped behind its new leader, and once again faces its traditional political opponent, the Partido Liberal Radical Auténtico (PLRA), which came out relatively unscathed after ousting a democractically-elected president. Lugo’s leftist front, meanwhile, has splintered: the fragmented forces of the left – Lugo’s Frente Guasú, Avanza País, and Movimiento Kuña Pyrenda – received less than 10% of the vote between them.
When the colorados lost the 2008 election, many were hopeful that a new chapter would open up in Paraguayan history. It was a short-lived dream with a traumatic end. While the PC victory restored political legitimacy, it also handed power back to the elites that have run the country for decades. On Sunday, Paraguay returned to reality, one which Cartes himself recently said would this time last “not for another 50 years, but forever”.