POLITICS-PARAGUAY: Wasmosy Leaves Office with Prison Looming

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Carlos Montero

ASUNCION, Aug 12 1998 (IPS) - Paraguay’s president, Juan Carlos Wasmosy, will end his term in office Saturday beset by political problems and an unresolved banking crisis, and threatened with imprisonment by his replacement following the hand-over ceremony.

A chain of lawsuits will be unleashed as soon as Wasmosy walks out of the Central Bank, wher, that he is aware he must face accusations stimulated by the desire for “revenge” from sectors of the governing Colorado (red) Party who support president-elect Raul Cubas.

Cubas replaced Lino Oviedo as the Colorado candidate, when the former was ruled out as a candidate for the May 10 election for his leading role in a failed coup attempt in April 1996.

Oviedo, who was also stripped of his military status, cannot be pardonned by his ally Cubas, as a law voted through by the outgoing legislative Congress obliges all those sentenced to serve half their term before they are eligible for pardon by the Executive Power, as established in the 1992 Constitution.

The complaints against Wasmosy start with the misadministration of State funds redirected from the Social Welfare Institute for the salvaging of 30 financial entities, which had been failing since May 1995.

Wasmosy, who dictator Alfredo Stroessner (1954-1989) awarded the contract for building the Brazilian-Paraguayan Itaipu dam, is accused by Congress of ratifying a “spurious” debt of four billion dollars in this binational company, generated by tariff subsidies which benefitted Brazil.

The president called for a rapid verdict from the Supreme Court on when he can become senator for life, a Constitutional category reserved for former presidents.

But the Supreme Court replied it could only rule on the immunity question were a person in the position between president and senator for life to face legal charges.

The outgoing president was informed by his advisors that his successor’s team intended to arrest him as soon as he has bade farewell to the foreign guests invited to his handing-over ceremony.

Hence, Wasmosy was hoping to be sworn in as life senator immediately after leaving the ceremonial symbols of Executive Power in the hands of Congress leader, Luis Gonzalez Macchi, and before Cubas is sworn in.

The main accusations pending against Wasmosy refer to supposed favouritism in the concession of public works to companies where he, or some of his cabinet ministers were interested parties.

Independent economist Ricardo Rodriguez Silvero, director of the Euro America Institute, said the last three years have seen the worst macroeconomic management in the history of Paraguay.

The foreign debt increased to 1.4 billion dollars and following several emissions of internal bonds, the public deficit has soared to 2 billion.

Meanwhile, international reserves fell from 1.187 billion dollars in May to 776 million in July, due to financial salvage operations and the bail out of the guarani, the national currency.

In December, the dollar stood at 2,200 guaranis, but this week the figure had soared to 2,850. Inflation ran at six percent last year, rising to 11 percent in the first seven months of 1998.

Before leaving office, Wasmosy wants to increase the national minimum salary by between 10 and 15 percent, from its current 207 dollars per month. Some 47 percent of the economically active population earns the minimum salary, but this benefit would only reach 20 percent, as the rest work in the informal market.

The effect of the increase would be ephemeral as the outgoing government recently returned their electoral favours to the urban transport companies, decreeing a 21 percent increase in ticket prices.

The current administration has also left the framework in place to increase electricity, water and telephone charges by 15 percent.

Fuel prices, meanwhile, are due a chapter apart. Despite the falling international oil price, the State company Petropar has registered huge losses due to the depreciation of the national currency and the tariff freeze brought in by the government during the election campaign.

Technicians working with Cubas have applied to the International Monetary Fund for a contingency loan of 300 million dollars to strengthen international reserves, which have fallen below the amount of money in circulation.

On Tuesday, Wasmosy attended the inauguration of an airport – the fifth in the last few weeks- in the department of San Pedro. His detractors criticised him for inaugurating unfinished public works – in fact even the bidding for equipping the five new air terminals has not been completed.

Meanwhile, Paraguayan commercial airlines cannot land in the United States, because the nation is in the last international category – on a par with Uganda – lacking minimum runway requirements and radars in a terminal which could be closed at the end of the year.

In the last month, Wasmosy also opened unfinished highways, and a gigantic military hospital with working lifts but no beds or equipment.