Paraguay election build-up dominated by corruption and Taiwan

In the heart of Paraguay's capital Asuncion, a tropical city close to the Argentine border, voters are gearing up for election day on Sunday, with the economy, corruption and Taiwan on their minds.

The farming nation of just under 7 million people will go to the polls to vote in what is expected to be a close contest between the slick, 44-year-old economist Santiago Pena representing the incumbent conservative Colorado Party and the 60-year-old political veteran Efrain Alegre leading a broad center-left coalition and pledging a foreign policy shake-up.

Pollsters see a tight race, even a technical tie. The ruling Colorado Party has dominated Paraguayan politics for the last three-quarters of a century, in power for all but five years. But persistent corruption allegations have led to cracks appearing in their support.

"We never talked about politics before, because a win for the Colorado Party was a done deal," 40-year-old bank worker Gustavo Vera told Reuters in the capital. "There's an air of change, the people have woken up."

At the bustling Mercado 4 street market in Asuncion, most cited the tough economic situation. The fiscal deficit ballooned to 3% of GDP last year, average annual growth in the last four years dipped to 0.7%, and extreme poverty has risen.

"We're going backwards, that is how I feel," said Nicolas Ortigoza, 32, as he served chicken skewers at his stall. "There's more corruption in Paraguay than work... All I know is we have to work much harder to make ends meet."

Whoever takes over the presidency in August is likely to come under pressure from the newly-elected legislature to reduce spending after a splurge to ease the impact of the COVID-19 pandemic and the invasion of Ukraine. Alegre has pledged to cut energy bills and Pena has promised to create more jobs.

"Whoever wins is going to have to limit public spending because debt cannot continue to grow," economist and former finance minister Cesar Barreto told Reuters, adding it was a "complex" moment for any new government.


In political newscasts and columns, talk has centered on the debate about whether to end long-term diplomatic relations with Taiwan in favor of China, and a string of graft allegations against key Colorado Party leaders.

The U.S. Treasury earlier this year imposed sanctions on party chief Horacio Cartes and Vice President Hugo Velazquez, citing "rampant corruption." They both deny the charges.

But the noise is swaying some voters.

"We've lived for too long with corruption, with poverty, with hidden drug trafficking and negligent healthcare," said student Eiden Malky, 19, who is voting for the first time.

"There is a lot of opposition to the Colorados... Not that the next politicians will be better, but we will vote (for them) because they offer something different."

Alegre, on his third presidential campaign, has pulled together a broad alliance of independent parties to challenge the powerful Colorado political machine. But he has come under fire from some quarters for indicating he would end nearly 70 years of diplomatic ties with Taiwan in a push to open up China's huge markets for Paraguayan soy and beef.

Back in the Asuncion street market, fish seller Candida Britez, 59, said her sales were weak and falling, and she was keen to have a new political leader to improve things.

"Customers before would buy three or five kilos, now maybe just one kilo. I can barely make enough to buy bread, sugar and milk," she said, adding that after the market closes she travels door-to-door selling what she can.

"Those of us who don't have much want to see prices fall, better schools, and more affordable electricity with our next president," said Britez.