Paraguay has not always been one of the poorest countries of South America; it used to be very rich.
Anticipated elections and fears of default on national debt are the outstanding issues of a critical scenario in this landlocked South American country. From the shadows, the ghost of violence and military intervention threat the precarious democratic stability in which the nation has lived since the return to democracy in 1989.
Last week, President Luis Gonzalez Macchi offered Thursday to leave office three months early in a bid to ease political tensions. Macchi faces impeachment accused by the Congress of illegally buying a stolen luxury car and mishandling millions of dollars in state funds. In Paraguay, stolen cars are not the exception but the rule as this 3.5 millions inhabitants country lives from the black market and trading of products from Brazil and Argentina.
"If there is political consensus, I'm willing to hand over power to my successor immediately after April's elections," said Gonzales Macchi. The President insisted his decision was not influenced by the hearings of impeachment set to begin within 15 days and which would require a two-thirds majority vote to remove him from office.
On the other hand, IMF did not approve this week a $ 200 million loan due to lack of political and economical conditions to agree. Therefore, Paraguayan weakened finances may run into debt default in the following months as there are no social and political space for austerity measures.
But Paraguay has not always been one of the poorest countries of South America. Even more, 150 years ago was the richest one, lending money to its most powerful neighbors Argentina and Brazil. However, XIX century deepened the country into the night of war. As Argentina and Brazil considered easier to make war than to make payments to Paraguay and used their military force to put down the smaller neighbor. Uruguay quickly joined and the "Triple Alliance" drove a deadly war for Paraguay (1865 - 1870).
Some interesting stories of this war: Argentine forces were commanded by Hungarian and Polish officials, who went down to South America to see if they could obtain some success after the frustrated revolutions of 1848 and 1864, respectively, in their countries. Also, it was the first war where armies used aerostat balloons to oversee enemy's deploying.
In the Twentieth Century, a bloody war between Paraguay and Bolivia (1932 - 1935) had terrible demographic consequences as reduced male population to little more than one/third of female. Then, after a liberal transition, General Alfredo Stroessner ruled the country for 35 years (1954 - 1989) backed by the Armed Forces.
Today, the congressional investigation was the latest blow to the embattled president, Gonzalez Macchi, who has struggled to stem an escalating economic crisis. Macchi assumed office in 1999 after his predecessor, Raul Cubas, was driven from power amid deadly street protests and accusations that Cubas was linked to the assassination of his former vice president.
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