Uncertainty increases as Paraguay’s presidential race comes to a close

Populist candidate Paraguayo Cubas' last-minute poll surge is upending Paraguay’s presidential race, which was expected to be a contest between the ruling Colorado party and the opposition Concertación coalition.

Elections for president, lawmakers and governors are slated for Sunday.

Cubas, a former senator who was ousted in 2019 due to altercations with police and calling for the extermination of Brazilian residents, is polling in third place behind left-wing Concertación candidate Efraín Alegre and right-wing Santiago Peña of the Colorado party.

Polls differ wildly and give the advantage to either Alegre or Peña to varying degrees, with some predicting Cubas is about to take the second spot. 

VOTER CONCERNS 

Corruption has been a major topic in the campaign, especially after former president Horacio Cartes and Colorado functionaries were sanctioned by the US State Department. Peña, who was finance minister between 2015 and 2017 in Cartes’ administration, has faced severe criticism. 

President Mario Abdo’s approval rating hovers at around 12%, among the lowest in the region, as he oversaw an economic slowdown and a foreign energy policy decision that nearly led to impeachment.

Paraguay’s GDP grew 0.2% last year, while inflation registered 9.8%. Yet, the IMF expects GDP to grow 4.5% and inflation to fall to 5.2% this year.

Peña promises to create 500,000 jobs with incentives to hire younger workers and pro-business measures. He also wants to lower gas and fuel prices, while maintaining tax levels.

Alegre, a former public works minister, favors austerity and wants to step up the fight against tax evasion to balance the budget, which last year registered a deficit equivalent to 3% of GDP.

“It is very difficult for the private sector to feel comfortable paying more taxes if the public sector does not make an effort to properly use the available resources,” Alegre told Reuters last week.

Paraguay's tax burden is around 10.4% of GDP, the lowest in South America.

Meanwhile, Cubas wants to impose taxes on real estate and agriculture and change land distribution policies. 

Daily Última Hora quoted him as saying that “90% of land in this country is in the hands of  0.6% [of the population] that’s made up of criminals,” adding he would deploy the armed forces and foster a dictatorship. 

INFRASTRUCTURE 

Despite major infrastructure projects ongoing or concluded – new bridges on the Brazilian border, the bioceanic highway, the Asunción-Chaco’I bridge – no candidate mentioned public works.

“The truth is no one has anything concrete,” Daniel Díaz, former head of construction chamber Capaco, told BNamericas. 

The current administration paved over 3,800km of roads, aiming to reach 4,000km before the new president is sworn in on August 15.

Abdo also created an expansive PPP agenda that includes waterways and highways, which were developed under a law passed during the Cartes government.

Alegre announced that he would cut ties with Taiwan to attract Chinese investments, which could lead to an infrastructure boost. Several regional infrastructure projects have benefitted from Chinese investments, as governments are courting Beijing.

But Taiwan also offered a non-reimbursable loan for a US$24mn bypass in Asunción, whose construction finished earlier this month.