Nikolas Kozloff

To read my most recent piece, click here.

Most likely, very few Americans are aware of the small, land-locked South American nation of Paraguay.  A politically volatile country displaying immense levels of economic inequality, Paraguay has recently been wracked by a wave of mysterious violence.  Experts say an obscure Marxist rebel group called the Paraguayan People's Army (known in Spanish by the acronym E.P.P.) is responsible for the escalating attacks, which have begun to capture the attention of the international media. 

 

Years after the end of the Cold War, the E.P.P. has confounded political expectations by mounting a challenge to the Paraguayan military.  Clad in camouflage and brandishing assault rifles, the E.P.P. plant bombs under police cars while killing and kidnapping Paraguay's wealthiest citizens.  During one recent raid, the rebels showed up at a remote ranch and promptly abducted security guards.  Then, when the police showed up, the guerillas launched an ambush. In the ensuing violence five people were shot dead, the deadliest incident thus far involving the shadowy guerrilla army.

 

It is unclear how many combatants fight with the E.P.P, and many aspects of the group remain elusive.  Allegedly, the rebels receive shelter from peasants and drug traffickers.  What is not in dispute, however, is the growing intensity of rebel campaigns out in the countryside.  In a country long characterized by unequal distribution of land, the E.P.P. has apparently thrived by drawing on support of local impoverished campesino farmers.  According to the New York Times "pockets of northern Paraguay have…taken on the semblance of a war zone as the central government ramps up military patrols and deploys special operations units to find the guerrillas."

 

Rural Center of San Pedro

 

As if the E.P.P. insurgency in Paraguay could get no more outlandish, Washington has been meddling in local politics and inveighing against the rebels.  Indeed, U.S. interest in the E.P.P. has been brewing for some time.  In advance of Paraguay's presidential election of 2008 which brought leftist Fernando Lugo to power, the U.S. sought out sensitive data in the country including "indications or evidence of terrorists or terrorist support networks' involvement with narco-trafficking." 

 

According to secret U.S. State Department documents published by whistle-blowing outfit WikiLeaks, Washington spied on various presidential candidates but Secretary of State Hillary Clinton was particularly concerned about the rise of Lugo, a former bishop from the impoverished rural hinterland of San Pedro, an area frequented by the E.P.P. rebels.  The Paraguayan right has charged that Lugo, who espoused so-called progressive "Liberation Theology" during his time in the Church, had vaguely defined "links" to the E.P.P. 

 

A neglected municipality, San Pedro is full of peasants obliged to eke out a living while rich soy barons make a killing on international commodity markets.  Facing a bleak future, many San Pedro residents eventually wind up emigrating to the U.S., Argentina, or Europe.  In a cable, U.S. diplomats noted that San Pedro had occasionally been prone to rural insurrection over the decades.  During his 11-year tenure as Bishop, Lugo fought for campesino rights and organized San Pedro's peasant movement.  According to some press reports, the Paraguayan Episcopal Conference believed that Lugo might have incited land invasions and some within the hierarchy were unhappy about such developments. 

 

Needless to say, such reports were similarly distasteful to the U.S. Embassy in Asunción.  The Americans conducted their own "sensitive reporting" suggesting that Lugo had ties to the Marxist Free Fatherland Party (known by the Spanish acronym P.P.L.), which had roots in San Pedro.  "Several P.P.L. leaders are reportedly ex-seminarians," the Americans wrote, "although Lugo has publicly denied having been their instructor."  According to Carmen Villalba, an E.P.P member now sitting in jail, Lugo approached the P.P.L. after embarking on a political career.  In 2008, the E.P.P was created as an offshoot of the P.P.L. though Villalba denies rightist claims that Lugo ever had any direct ties to the successor group.

 

Chávez Tours San Pedro

 

The prospect of a rural bishop coming to power in Paraguay, particularly in the midst of a wider left turn in South America, was hardly agreeable to Washington.  To the north, Hugo Chávez had been pushing for land reform, and U.S. diplomats were instructed to ascertain whether Lugo had received material support from Venezuela during the campaign.  One political party in Lugo's coalition, the Americans noted in a cable, had indeed received such financial support.

 

Rightist alarm bells went off further after the election brought Lugo to power.  Literally one day after his inauguration, Lugo invited Chávez to Paraguay to discuss rural collaboration.  Together, the two traveled to San Pedro where Lugo pledged to raise living standards.  Speaking to farmers in the town square, the new president remarked "this is where I learned to love the peasant, the indigenous people, and to admire their efforts to excel despite adverse conditions."

 

Chávez declared that he was willing to help Paraguay develop an "agro-industrial center" and provide agricultural and technical assistance.  In particular, Chávez singled out San Pedro for such assistance.  According to a report in McClatchy, "Chávez drew reporters and crowds wherever he went, oozing charisma at every stop…Chávez hugged children, embraced everyone he met as if he or she was his long-lost friend and identified Lugo's unexpected victory with changes in the continent that he hopes will bring South America together under his leadership."

 

Needless to say, Paraguayan conservatives were hardly pleased by such developments.  In a candid aside, Paraguay's own Minister of Agriculture told the Americans that he was concerned about "radical actors surrounding the President." Specifically, the official was worried "about Venezuelan President Hugo Chávez' presence in rural areas, and [he] predicted an increase in illicit activity where the Paraguayan state has a weak presence." In further conversations, landholders "shared similar concerns about a 'chavista' influence in rural areas, and the growth of marihuana plantations by peasants from some of the same social groups demanding land."

 

E.P.P. Goes on Offensive

 

Meanwhile, Lugo's electoral victory put Washington in a quandary.  On the one hand, the U.S. State Department did not trust the new president, but on the other hand the Bush administration could not stomach the prospect of a growing rural insurgency in Paraguay.  To make matters worse, just after Lugo's election in April, 2008 the E.P.P. kidnapped wealthy San Pedro cattle rancher Luis Lindstrom.  The E.P.P. frequently singled out soya farmers like Lindstrom, a powerful figure who also owned a local logging operation.  The daring action created a media firestorm which exerted pressure on Lugo to provide for greater public security.  Six weeks later, Lindstrom was released but only after his family was forced to pay the rebels $300,000 in ransom money.  The rebels followed up for good measure by attacking a small army outpost in San Pedro.

 

According to WikiLeaks documents, Washington decided to split the difference in Paraguay by carrying out a delicate and stealthy collaboration with political and military authorities.  Alarmed by the Lindstrom affair and growing violence in San Pedro, the Paraguayan military decided to deploy a special U.S.-trained unit to conduct door-to-door searches.  Nevertheless, both Washington and Asunción decided not to send advisors to the area "due to local sensitivities to a possible U.S. military presence." 

 

WikiLeaks cables underscore the delicate nature of Washington's involvement in Paraguay, particularly in the military realm.  Lugo, who was associated with South America's so-called "Pink Tide" to the left, did not wish to be too clearly associated with U.S. policies. Indeed, according to cables Lugo literally recoiled at the notion of American military involvement in his country.  Speaking with the U.S. ambassador, the Paraguayan president "physically pushed back his chair" when the conversation turned to military matters. 

 

New President in a Bind

 

Such posturing put Lugo at odds with earlier protocol.  Under previous Asunción administrations, the U.S. had more of a free hand when it came to military operations.  For years, Washington's Southern Command operated in the country to ostensibly provide rural medical care.  However, some have suggested that the Americans were actually in Paraguay to spy on leftist movements or peasant leaders.  According to Argentine paper Clarín, Washington even had its own air base located in the town of Mariscal Estigarribia.  

 

WikiLeaks documents show that the incoming Obama administration was just as wary of Lugo as the earlier Bush White House.  Indeed, U.S. Secretary of State Hillary Clinton ordered subordinates to spy on the Asunción leader by collecting valuable psychological data.  Perhaps, Lugo developed second thoughts about crossing the Americans.  Facing political pressure from Washington and the Paraguayan right, government officials remarked in private that they were "interested in deepening our mil-mil relationship" though the country "needed a break to mark a shift from the past administration."  Hoping to mollify the Pentagon, the Lugo administration added that U.S. Special Operations units were welcome to stay in Paraguay.

 

The Struggle for Land

 

Such political contortions were beginning to exact a toll on the new administration.  Though Lugo pledged to bring about a more equitable system of land tenure in Paraguay, rebels in San Pedro called such commitment into doubt.  Indeed, U.S. diplomats reported that the E.P.P. urged "campesinos to use violence to agitate for agrarian reform" while expressing "doubt in President Lugo's ability to execute basic agrarian reform."  In November, 2008 the E.P.P. distributed a pamphlet saying that the group would invade land "because the Fernando Lugo government will not carry out agrarian reform which was promised to the Paraguayan people."

 

The emergence of the E.P.P. put Lugo in a tight bind.  The last thing the president wanted was to prosecute a counter-insurgency campaign against a new rebel group proclaiming the rights of rural campesino farmers.  On the other hand, if he failed to provide for adequate security, Lugo might risk his political reputation.  What is more, Lugo himself admitted to the Americans that the Paraguayan military had "many failures" and as a result appreciated superior U.S. training and equipment.

 

Behind closed doors, Lugo brought the U.S. in on high level E.P.P. discussions.  The Asunción government, Lugo remarked, was still in favor of ongoing American support for a so-called U.S.-trained Joint Rapid Response Detachment in the field.  Indeed, the president was pleased with the unit's deployment and performance in areas hotly contested by the rebels.  During the conversation, the U.S. Chargé d'Affaires reminded Lugo that the U.S. had even paid for the gas and expenses of the joint unit's deployment. 

 

Ill-Equipped Law Enforcement

 

Ill-equipped to handle the E.P.P., Lugo also found himself relying on U.S. law enforcement.  In early 2009, the rebels detonated an improved explosive device (I.E.D.) at the Paraguayan Palace of Justice or Supreme Court.  Though the explosion caused only minor property damage and no injuries, the incident underscored local police inability to provide for adequate security. 

 

Shortly after the blast, American officials assisted the police with identification of the explosives and secured a sample for analysis by the F.B.I.  During a meeting, the Chief of Intelligence, Minister of the Interior and Communications Minister discussed the incident with U.S. Embassy staff.  In private discussions, the Supreme Court President told the American Ambassador that he "would not rest until those responsible are found."  The Paraguayan added that "he had personally received seven threats this year."

 

Dozens of bomb threats followed the Supreme Court blast throughout April and May, 2009, "likely part of a harassment campaign against the government of Paraguay."  Throughout the situation, U.S. authorities provided the Paraguayan police with assistance, including U.S. Special Operations explosives experts and visiting F.B.I. personnel. Far out of their depth in the technological realm, the Paraguayans also asked the U.S. Embassy for help "with link analysis on cell phone data gained from the various called in threats and tips provided by Paraguayan citizens."

 

Zavala Affair and Colombia Connection

 

Already embroiled in providing security to the Lugo government, the Obama administration would shortly be drawn even further into Asunción affairs as the Paraguayan conflict started to take on a familiar Cold War tinge.  In October, 2009 the E.P.P. seized wealthy rancher Fidel Zavala, causing a national uproar.  Many Paraguayans, alarmed by the deterioration of security, hung white ribbons on cars and houses demanding Zavala's release.  In a cable, U.S. diplomats noted that "many political analysts believe that Lugo's fate is tied to that of Zavala, and that Zavala's death could trigger impeachment proceedings against Lugo for not managing security issues well."

 

In an unlikely development, Lugo now turned to none other than the right wing Álvaro Uribe government in Bogotá for assistance.  Colombia, a political and military ally of the U.S. throughout the wider region, had longtime experience handling kidnapping and counter-insurgency.  What is more, both Paraguayan and U.S. officials have claimed that the E.P.P had links to Marxist FARC rebels in Colombia fighting against the Bogotá government.  Though both failed to produce much proof, Asunción security officials claimed that the FARC actually trained the E.P.P., an allegation denied by the rebels in Paraguay.  For its part, the U.S. started to fear a so-called "Colombianization" of the Paraguayan conflict.  Behind closed doors, the U.S. ambassador met with the Paraguayan Minister of Interior to discuss the alleged links.

 

While Lugo's turn to Colombia for practical assistance may have made some logistical sense, it gave the impression of a government adrift without much ideological or political consistency.  Colombia had been a leading critic of Venezuela and Hugo Chávez, a figure who had already offered much assistance to the fledgling government in Asunción.  In private discussions with the U.S. Ambassador, Lugo revealed that he had been in frequent contact with President Uribe following the Zavala incident and a kidnapping team was dispatched from Bogotá to Paraguay.  The Colombian team had in turn received U.S. training and technical assistance under so-called "Plan Colombia."

 

Lugo's Dangerous Game

 

Despite Lugo's somewhat odd rapprochement with U.S. ally Colombia, the Paraguayan President found himself in a quandary.  Though he needed American assistance on the Zavala kidnapping, Lugo was torn politically.  In September, 2009 he joined Hugo Chávez on Margarita Island in Venezuela for an Africa-Latin America summit attended by other South American leftist leaders.  During the conference, reform of world bodies like the United Nations emerged as a key concern, and at one point Lugo called for a "new world order."

 

Even more audaciously, the Paraguayan revoked plans for U.S. troops to hold several joint military exercises and carry out development projects in Paraguay.  Lugo criticized the so-called "New Horizons" military program, remarking that "there would be about 500 U.S. military and other personnel in the country and that wouldn't go unnoticed [by other countries in the region]."  Needless to say, U.S. ambassador Liliana Ayalde was none too pleased, declaring in turn that Lugo's decision was "regrettable."

 

Despite his left leanings, Lugo played a dangerous game behind the scenes with the Americans.  Panicked and concerned for his political future, Lugo called on the U.S. ambassador.  The President remarked that the E.P.P. was "very dangerous" and the rebels knew their territory so well that they could detect "even a cow moving into it."  Hoping to reassure Ayalde, Lugo said that since the earlier Lindstrom kidnapping the authorities had done "good intelligence" in the San Pedro area.  Indeed, the security forces had embedded a number of officers in the countryside who were living amongst the campesinos "with beards and all." 

 

A Tense Meeting

 

Apparently, the ambassador wasn't too impressed with Lugo's show.  Indeed, Ayalde told the president that she "wanted to take stock of our mil-to-mil relationship following the government of Paraguay's decision to decline the New Horizons exercise."  Ayalde added that she was "confused by Lugo's signals" and "particularly his September 26 speech in Margarita Island."  Lugo then abruptly jumped up in his chair and declared "I know that they want us to be enemies but I'm not going to fight with you (the United States).  There is nothing to this."  Paraguay sought to move forward with military collaboration, Lugo said, and "we have lots of programs with the U.S."

 

A month after meeting with Ayalde, Lugo followed up by inking a deal with the Americans to deliver military materiel and equipment to a joint Special Forces battalion specifically tasked with combating terrorism.  Meanwhile, the Americans urged the Lugo government to publicly emphasize Colombia's "expert assistance" when it came to handling of the Zavala case.  Fortunately for Lugo, the E.P.P. finally agreed to release Zavala in January, 2010.  To secure the rancher's release, the Zavala family was forced to pay $550,000 and to distribute meat to poor communities.

 

The WikiLeaks trove leaves off in late 2010, so we don't know a lot about covert U.S. activities in Paraguay over the past few years.  Nevertheless, one cable from early 2010 suggests the Americans continued with their "under the radar" military collaboration.  In a note to Washington, the U.S. Embassy noted the brief deployment of U.S. forces to Paraguay in an effort to train local Special Forces in the "global war on terrorism."  Clearly, the E.P.P. was of key concern to the mission and diplomats noted the rebels had "low level I.E.D. capabilities and a known anti-American ideology."  U.S. forces were tasked with providing sniper as well as air assault operations training.

 

Lugo's Ironic and Unsuccessful Escalation

 

Perhaps, such training came in handy.  In early 2010, Lugo cracked down on the E.P.P. by sending 1,000 troops to the Bolivian border area.  The President was prompted to escalate following a rebel attack which resulted in four civilian deaths as well as a policeman. Amidst mounting criticism from the Paraguayan right, which claimed that Lugo had gone soft on the guerrillas, the President even asked Congress to grant him emergency powers.  By now gripped with counter-insurgency fervor, Congress in turn acquiesced.  Under the law, Lugo was authorized to carry out arrests without a warrant and the army was allowed to join police on security operations.

 

Though Lugo's escalation may have placated the Paraguayan right, the state of siege placed the President in a rather ironic situation.  The idea that a former bishop espousing Liberation Theology and land reform would resort to a draconian crackdown and counter-insurgency campaign in the countryside put the Lugo administration in a contradictory position.  Moreover, Lugo's rash decision proved controversial amongst opposition parties and N.G.O.'s and the President failed to obtain any tangible gains since only one alleged E.P.P. member was caught during the 30-day suspension of constitutional guarantees.

 

E.P.P. Tows the Ideological Line

 

Needless to say, Lugo also managed to make the rebels even more resentful of the central government.  In a public relations stunt the E.P.P. offered to pay $1,000 to anyone who could turn over Lugo, the Minister of Interior or any member of the Supreme Court.  "We don't have much money," the rebels noted in a communiqué, "but we do have a lot of dignity."  The rebels went on to criticize the U.S. and called Colombian President Álvaro Uribe "the imperialist's lapdog."  

 

All along, the E.P.P. had seen Lugo's collaboration with non-leftist groups as a betrayal of rebel ideals.  In rather hackneyed and ideological communiqués, the rebels blasted so-called "treacherous pretend socialists" who had carried out alliances with "pro-imperialists" and "pro-oligarchy" factions.   In late 2010, Lugo received a threatening letter from the rebels, calling him a "walking cadaver." 

 

Having failed to vanquish the rebels, Lugo was obliged to declare another state of siege the following year after the E.P.P. threatened to kidnap the chairwoman of the conservative Colorado Party.  This time, Lugo deployed 3,000 troops with the U.S. announcing it would donate more than $1 million for military equipment and training in the effort to hunt down and eliminate the E.P.P.

 

Lugo's Removal and Murky U.S. Role

 

Even as Lugo sought to keep a lid on social discontent and the E.P.P., the Paraguayan right, and no doubt the Americans too, grew restless.  In June, 2012 both were relieved when Lugo was dramatically removed from power.  Ironically, even though Lugo had cracked down hard on the E.P.P., legislators accused Lugo of encouraging land seizures which had resulted in violent clashes with security forces.  In what has been described as a "quasi-coup," the President was ousted by his country's right wing Congress in a kangaroo process.  

 

In an upset, Lugo's rightist Vice President Federico Franco assumed his old boss' job.  Needless to say, Hugo Chávez was dealt a severe blow and Venezuelan political and diplomatic influence in Paraguay was greatly reduced as a result of the shakeup.  There's no evidence that the U.S. was involved in Lugo's removal from power, but in a rather suspicious development, a group of U.S. generals met with legislators even as Lugo was being impeached.  Reportedly, both discussed the possibility of installing an American military base in Paraguay.

 

Cold War Redux?

 

    If anything, Lugo's removal seemed to harden attitudes on all sides of the political divide in Paraguay, creating a kind of throwback to the Cold War in Latin America.  Somewhat foolishly, the E.P.P. mocked Lugo even after the latter's ouster.  In addition, the rebels refused to recognize the Franco regime in Asunción.  The new de facto President returned the favor, declaring that the E.P.P. represented the "long arm" of the Colombian FARC. 

 

Deviating from Lugo's pior embrace of Chávez, Franco accused Venezuela of "direct and malicious" involvement in Paraguayan politics in support of a "terrorist and criminal" gang.  For good measure, Franco said that Chávez had organized and developed training programs for the E.P.P.  The rebels, Franco added, had been invited to Venezuela with scholarships for supposed agriculture training programs.  Once they settled in Venezuela, however, E.P.P. members "were not precisely involved in learning to till the land but rather in the use of weapons and guerrilla tactics."  Under Franco, Paraguayan officials hinted they had received support in the counter-insurgency war from both Bogotá and Washington.

 

Counter-Insurgency and Human Rights

 

Despite this hard line, Franco failed to vanquish the rebels.  In 2013, a new election brought the hard line conservative Colorado Party back to power.  Horacio Cartes, the new President, sought to deal with the E.P.P. problem once again through military means.  Just one week after Cartes took power, Congress gave the President sweeping powers to use the army for domestic policing.  The vote followed an E.P.P. attack which killed four private guards on a landed estate in San Pedro.

 

Cartes' crackdown quickly raised concerns amonst Paraguayans who recalled earlier human rights violations and a legacy of military rule.  Amidst militarization of the country, targeted killings of peasant leaders began to increase.  As Cartes deployed the army to San Pedro once more, human rights organizations reported that many peasant leaders had been arrested and accused of having links with the E.P.P.  Indeed, landless peasants claimed that the Paraguayan state prosecuted the counter-insurgency war as a means of simply repressing poor communities. 

 

In one incident, the military stormed a local school and asked the children if they knew where the E.P.P. was.  A local campesino who denounced the raid to the press was later locked up for her alleged links to the rebels, in what was seen as a move to intimidate residents.  True to form, the rebels made PR hay out of Cartes' misguided policies, declaring that Paraguay was governed by the number one "mafioso." Then, for good measure, the E.P.P. issued a death threat against Cartes.

 

How embroiled has Washington become in the counter-insurgency war?  Though WikiLeaks cables illuminate growing U.S. involvement under Lugo, we don't know much about the Obama administration's record during the Franco and Cartes administrations.  What is more, the circumstances surrounding Lugo's removal, as well as the U.S. role, still remain very murky. Recently, journalist Glenn Greenwald reported that the National Security Agency (or N.S.A.) spied on Paraguay for years.  What, if anything, do these files contain?  Perhaps future reporting can help to shed light on such controversies.

 

A Nebulous Rebel Movement

 

As they seek to justify their draconian and militaristic approach, the Paraguayan right and U.S. policymakers will probably continue to demonize the E.P.P.  To be sure, serious doubts remain about the exact nature of the rebel struggle and the group's hazy political goals.  Carmen Villalba, sister of supposed E.P.P. leader Oscar Villalba, has declared that the rebels enjoy widespread popular support in the countryside.  In videos, the rebels claim to represent the "armed wing" of the Paraguayan poor and call for the elimination of private property.  Rebels are seen in other videos dressed in camouflage and speaking in Jopara, a mixture of indigenous Guarani and Spanish.

 

It's unclear, however, how truthful such claims may be and Paraguayan authorities say the rebels are mere bandits with links to drug trafficking.  In 2012, web site Insight Crime wrote that the E.P.P. had shown little real interest in land reform and "most of the group's activities have revolved around kidnapping and occasional bombings targeting the security forces. When there have been reports of the group trying to gain the sympathy of local populations, there is little evidence that they have been successful."  Since that time, the rebels seem to have shifted strategy and now focus less on kidnapping and more on attacks of large ranches.

 

Whatever the case, the E.P.P. has certainly not gone away amidst ongoing social inequality in the countryside.  To be sure, the rebels pose little military threat to the central government and probably can't muster more than 60 full time combatants.  On the other hand, the E.P.P. has proven to be highly resilient and the rebels have steadily escalated their attacks over the years.  Indeed, rebels have moved from bank robberies to high profile kidnappings, bombings and occasional attacks against the security forces.  If anything, the steady escalation proves the E.P.P. has little problem carrying out specific and well-planned actions.

 

Lasting Questions for Washington

 

Though Washington and Asunción may continue to stress anti-terror rhetoric in the ongoing campaign against the E.P.P., hoping to demonize the rebels as mere bandits, the U.S. should seriously reassess its strategy in remote Paraguay.  The last thing the small country needs is a return to Cold War-style politics which caused irreparable harm and suffering in much of Latin America.  It's time for right wing elites in both Washington and Asunción to change their psychological mindset which tends to view regional politics in stark and antagonistic black and white terms.

 

If recent developments are any indication, the counter-insurgency strategy is only making things worse in the Paraguayan countryside, and a military solution is no substitute for long-lasting agrarian reform.  The longer the U.S. continues its under the radar cooperation with the military, the greater the risk that local security forces will slip back into their age-old pattern of human rights violations, a scenario which must be avoided at all costs.

To read my latest article on Brazil's emerging drone surveillance program, click here.

Unfortunately, there is a pay wall so one cannot read the entire piece though you get a clear gist from the introduction. The article deals with the extreme diplomatic and political sensitivities associated with President Rousseff's drone program. Brazil is an emerging world power, and must tread lightly in neighboring countries like Paraguay and Bolivia which guard their sovereignty closely.

Check out this interview I just conducted with al-Jazeera about the Paraguayan election and return of the dreaded Colorado Party. Other panelists included Adrienne Pine, a professor of anthropology at American University, and Kregg Hetherington, who teaches at Concordia University.

It's depressing to think that just a few short years ago, former President Fernando Lugo was poised to ameliorate grinding poverty and social inequality in the Paraguayan countryside. Yet, because he committed a number of internal political mistakes and failed to galvanize the peasantry, Lugo made it easy for the Paraguayan right to depose him in what some observers called a "quasi-coup" [for a run down of Lugo's many missteps, see my very extensive WikiLeaks archive here].

Perhaps, if Lugo had been more radical and pushed for greater land reform, or made more of a point of rebuffing the U.S., he would have received more support from civil society when push came to shove. Unfortunately, the return of the Colorado Party will surely lead to more rural repression and rollback of the left. Moreover, the defeat of the left at the polls suggests a wider political malaise for the Latin left at the regional level. Witness Venezuela, for example, where Nicolas Maduro has held on, but just barely, and the Bolivarian Revolution is on the skids.

How have things changed so dramatically in just a few scant years? In my view, the left has not electrified the population and has thereby given the resurgent right an opening. Furthermore, the U.S. will no doubt exploit the left's missteps in Paraguay and elsewhere. As I explain in my pieces, no one seems to know what U.S. Special Forces are doing in Paraguay, though some allege that they are simply deployed to the Chaco to identify trouble making rural leaders. Meanwhile, shadowy Texas oil companies like Crescent benefited from the Lugo shakeup in the Chaco though to my knowledge no journalist has followed up on the story. Because Paraguay is so remote and far away, even the U.S. left has been slow to demand more accountability and investigation of these matters.

So, what comes now? Once the left has gotten over this initial reversal, it should soberly take stock of the regional milieu. For my money, the Paraguay fiasco underscores the need for a larger political movement within the Southern Cone. In order to achieve true social justice in the Paraguayan countryside, Brazilian landless squatters are going to have to ally with their Paraguayan counterparts across the border in an effort to counteract the power and influence of so-called "Brasiguayos": Brazilian planters who settled in Paraguay to cultivate soymeal.

These Brasiguayos, who number on the order of 350,000, are a big obstacle to rural change. Though Brazilian President Dilma Rousseff is a nominal leftist, she will be reluctant to stand up against landed interests and agribusiness. Nevertheless, if they hope to make any headway, social movements are going to have to pressure not only the authorities in Asuncion but also entrenched and powerful interests in Brasilia.

With the U.S. now losing a degree of its economic and political hegemony throughout the world, a key question will be how Washington reconciles itself to emerging powers such as Brazil. A South American powerhouse in the midst of an agricultural commodities boom, Brazil has witnessed the dramatic growth of its middle class and has been increasingly throwing its weight around in the realm of international affairs. In secret diplomatic cables recently disclosed by whistle-blowing outfit WikiLeaks, U.S. diplomats openly admit that Washington is engaged in an undeclared contest with Brazil for regional influence.

 

So far this rivalry has not become overtly antagonistic, yet beneath the surface lurk tensions which could break out into the open. When and where are such rivalries most likely to cause frictions? Perhaps, the small landlocked nation of Paraguay, which sits on the Brazilian border, could be one source of conflict. Brazil has made Paraguay into a veritable economic satellite, yet a recent political shakeup in Asunción stands to benefit U.S. interests.

 

Under President Fernando Lugo, Paraguay joined South America's "Pink Tide" to the left which had challenged Washington's traditional standing throughout the hemisphere. Though Lugo cultivated friendly ties with Washington, the Paraguayan leader also staked out an independent foreign policy and challenged American priorities. On the military front, for example, Lugo outright rejected any Pentagon collaboration under the so-called "New Horizons" program.

 

Washington Stages a Comeback

 

The overall political equation was hardly agreeable to Washington, yet, in light of recent developments, the U.S. may be poised to stage a comeback. Just over a month ago, in a kangaroo process akin to a "quasi-coup," Lugo was ousted from power by his country's right wing Congress. In a stunning rebuke, legislators accused Lugo of encouraging land seizures which resulted in violent clashes with security forces. In a sham, the Senate gave Lugo a mere two hours to defend himself in a public trial. When Lugo's lawyers requested more time to argue their case, they were rebuffed by the President of the Senate. Then, in an upset, Lugo's rightist Vice President Federico Franco assumed his old boss' job.

 

Washington meanwhile hasn't been too enthusiastic about calling for Lugo's reinstatement. Perhaps that is not too surprising in light of the history. Indeed, WikiLeaks cables show that the State Department was very concerned about Lugo, a politician who championed land reform and cultivated links to Hugo Chávez of Venezuela. Suspiciously, no sooner had Lugo been removed from power than legislators met with a group of U.S. generals to discuss the possibility of building a new military base on Paraguayan soil.

 

Brazil Reacts to Paraguay's Political Crisis

 

Brazilian President Dilma Rousseff, on the other hand, has been far more outspoken in opposing Paraguay's shakeup. That is not too surprising, given that Rousseff, a protégé of former Workers' Party (or PT) President Luiz Inácio "Lula" da Silva, was a kind of ideological kindred spirit to the progressive-minded Lugo. Responding to rising outrage in civil society, Brazil voted to suspend Paraguay from South American trading bloc Mercosur, a development which prompted a strong rebuke from the new de facto Franco regime in Asunción.

 

The conventional wisdom is that Paraguay's shakeup represents a big geopolitical blow to Brazil and an upset triumph for Washington. The Center for International Policy remarks "in Paraguay the most backward political and economic forces have gained ground, opening up the possibility of a closer alliance with the United States, which gains an ally in a place where it can do much harm to Brazil." There's a degree of truth in such interpretations, but the situation is a bit more complex and nuanced than analysts let on.

 

Whatever its' public rhetoric about leftist solidarity in South America, Brazil has been a cynical operator all too willing to deal with the U.S. while secretly inveighing against upstart Venezuela, and WikiLeaks documents are replete with such double-crossing. Fundamentally, while Brazil may be suspicious of Washington, the South American juggernaut is also wary of Chávez and surely does not want to see pesky Venezuela extending its influence into the Southern Cone. Paraguay, then, offers unusual insight into the "Brasilia-Washington-Caracas triangle" and the scramble for geopolitical influence in the heart of South America.

 

Radicalization in the Countryside

Though Brazil may express political solidarity with the Paraguayan left, the South American nation is compromised by its octopus-like economic interests reaching far afield. In recent years, so-called "Brasiguayos" (Brazilian farmers who moved to Paraguay to cultivate soybeans) have established a huge presence across the border. A socially conservative group some 350,000 strong, the Brasiguayos have spent years locked in violent disputes with Paraguay's campesino squatters. It is widely believed in Paraguay that the Brasiguayos have illegally taken over large swathes of land.

 

Through his calls for agrarian reform, Lugo hardly ingratiated himself amongst the Brasiguayos. Furthermore, shortly after he was elected, the Paraguayan invited Hugo Chávez to his country to discuss rural collaboration. Chávez, who had earlier pushed his own ambitious land reform project in Venezuela, declared that he was willing to help Paraguay develop an "agro-industrial center" and provide agricultural and technical assistance.

In a candid aside, Paraguay's Minister of Agriculture told the Americans that he was concerned about "radical actors surrounding the President." Specifically, the official was worried "about Venezuelan President Hugo Chávez' presence in rural areas, and [he] predicted an increase in illicit activity where the Paraguayan state has a weak presence." In further conversations, landholders "shared similar concerns about a 'chavista' influence in rural areas, and the growth of marihuana plantations by peasants from some of the same social groups demanding land."

 

Upping the Ante on Energy Resources

 

In yet another provocation, Lugo issued fiery nationalist rhetoric on the campaign trail before assuming the presidency. Brazil, Lugo charged, should pay more for electricity which it received from Itaipu, a hydroelectric dam jointly owned by Brasilia and Asunción. The facility lies along the two nations' common border, and according to Americas Quarterly, "the electricity that fattens the Paraguayan coffers also supplies São Paulo state, Brazil's industrial engine, with power."

 

Much to Brasilia's chagrin, Chávez inserted himself into the energy imbroglio by supporting Lugo's nationalist claims. During a summit of the radical ALBA bloc of Latin American nations, which included Venezuela, Bolivia, Ecuador and Cuba, members stated that Lugo's proposals were a "prerequisite" leading to "the full sovereignty of Paraguay over all its hydroelectric resources." With Chávez, Evo Morales of Bolivia and Rafael Correa of Ecuador looking on, Lugo declared "we believe that a compañero, a friend like Lula cannot defraud us. Lula cannot tell us no when it comes to a just price and free availability of that energy [Itaipu]."

 

Whether Lula was moved by such solidarity and idealistic rhetoric is unclear, but according to sensitive e-mails leaked by WikiLeaks, Brazil is very concerned about securing ongoing energy access to Itaipu. The Strafor Corporation, a company that fronts as an intelligence publisher but provides confidential intelligence services to large corporations and U.S. government agencies, was particularly interested in finding out more about Brazil's agenda in Paraguay. One confidential source told the company that Brasilia was concerned about sabotage and unrest at Itaipu, adding that the Brazilian military had a contingency plan to secure the hydroelectric facility in the event of instability.

 

Meeting with the Americans

 

If Brasilia did not have its hands full enough with such worries, the Paraguay border presented yet another problem. Along the long and porous Brazilian-Paraguayan frontier, smugglers traffic in drugs and illegal arms and this contributes to rampant crime in Brazil's dangerous favelas. Far from distancing itself from the U.S., WikiLeaks documents reveal that Brazil shares Washington's concerns about the Paraguayan border and holds joint meetings with the Americans to discuss the situation.

 

In 2005, for example, the U.S. Ambassador in Brasilia hosted a lunch for General Jorge Armando Félix, the Minister for Institutional Security [the rough equivalent of the U.S. National Security Advisor]. During the meeting, the two discussed transnational crime and counter-terrorism operations in the Tri-Border area abutting Brazil, Paraguay and Argentina.

Brazil, then, is enmeshed in an extremely delicate game in the Southern Cone. On the one hand, the South American juggernaut does not want to jeopardize its relations with Washington, but on the other hand Rousseff would like to exert control over Paraguay, a country which has traditionally been a Brazilian buffer state. The Chávez card, meanwhile, adds yet another level of intrigue into the mix, making for an unusual geopolitical triangle.

 

Brazil Shows Paraguay Who's Boss

One WikiLeaks cable, dating to late 2008, hints at such underlying tensions. With land invasions running high in Paraguay, Brazil staged military exercises along the two nations' common border. According to the U.S. Ambassador in Asunción, Brazilian troops repeatedly encroached on Paraguayan territory. "We now have to demonstrate that we are a power," Brazil's Southern Command Chief warned, "and it is important that our neighbors know about it." In another shot across the bow, the officer reportedly remarked that Brazil would intervene if Itaipu dam were taken over by "social movements."

 

In an escalating war of words, Lugo retorted "Brazil can do what it wants inside its territory" but "we will not accept any interference." The President added, "If you believe that military exercises at the border or press statements are going to scare us, they will not." The Paraguayan military, meanwhile, went on alert as Lugo traveled personally to the border. The U.S. Ambassador no less accompanied the Paraguayan leader, and privately Lugo officials believed the diplomat's presence represented "a show of U.S. support for Paraguay to Brazil."

Perhaps, press reports speculated, the Brazilian military was sending a message to Venezuela. Just two months prior to Brazil's military encroachment, Chávez visited the rural Paraguayan department of San Pedro, known as the "epicenter of campesino activity." Within the area, agitation against the Brasiguayos was reaching a tipping point and Chávez, fanning the flames, had "singled out the department…for local development assistance."

 

One political analyst told the Americans that "the purpose of the Brazilian military exercises was to warn…Chávez that Paraguay is linked to Brazil's security plan and to not meddle in Paraguay's internal affairs by financing pro-Venezuelan political campesino groups." If that was the intention, however, then the Brazilian maneuvers surely backfired. In a sign that he would not back down, Lugo banned foreigners from owning property for agricultural purposes.

 

Removing the Chávez Card

 

Fast forward a couple of years to Lugo's ouster, and the new political milieu in the Southern Cone would seem to benefit the U.S. while hindering Brazil. The rightist de facto Franco administration in Asunción has realigned itself with Washington and opted out of South America's leftist Pink Tide. After Rousseff moved to suspend Paraguay from Mercosur over the Lugo affair, Asunción even warned Brazil that it might cut off the electrical supply to its powerful neighbor via Itaipu.

 

Yet, look beneath the surface rhetoric and the new geopolitical configuration may serve to benefit Brasilia in certain respects. The incoming Franco administration has shown itself to be very partial to agribusiness and therefore the Brasiguayos have little to fear in the countryside. Needless to say, with Lugo now gone the prospects for land reform look more distant than ever. Moreover, there is little chance of Chávez causing any rural mischief at this point, since Franco and his clique are virulently anti-Venezuela.

 

Indeed, if there was any big loser in the Paraguay reshuffle, it was Chávez, whose larger hemispheric ambitions have been dealt a severe blow. The removal of the Venezuela card, then, simplifies the geopolitical battle in the heart of South America which now pits two powers against each other where once there were three. In Paraguay, Washington has political and military leverage, while Brazil enjoys economic influence. So far, Rousseff has been careful not to upset the Obama administration, preferring instead to pursue a kind of "under the radar" diplomatic strategy. As the U.S. stages a comeback in Brazil's backyard, however, Rousseff may wonder whether the time has come to finally push back.

My latest about Brazil and its wider role in South America now out. Click here to read the article.

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Few people know what the U.S. is up to in the remote Chaco region of South America. Let the debate begin and read my article here.

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