Ruling Party Candidate Santiago Peña Scores Major Win in Paraguay Election

Bloomberg — Santiago Peña, a former finance minister, scored a major victory in Paraguay’s presidential election Sunday, as voters gave the ruling Colorado Party a third straight mandate to run the South American country.

Peña, 44, had 43 percent of the vote with more than 98 percent of voting stations counted, according to preliminary results from the electoral court. His main challenger, Efrain Alegre, a former public works minister leading a coalition of leftists and conservatives, conceded after winning about 28 percent of votes.

President-elect Peña called on Paraguayans to put aside their differences and work with him to improve living standards.

“We have a lot to do after the recent years of economic stagnation, worrying levels of unemployment and the increase in the poverty rate,” he said in a televised address to supporters. “The task that awaits us isn’t for a single person or party.”

Public opinion surveys had shown a tight race between Alegre and Peña, both of whom held hefty leads over a crowded field of contenders. However, anti-establishment candidate and ex-senator Paraguayo Cubas proved a spoiler for Alegre, taking almost 23% of the vote. The Senate expelled Cubas, who gained notoriety for punching and throwing water at fellow senators, after he assaulted police officers in 2019.

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Peña will start his five-year term on Aug. 15, when incumbent President Mario Abdo Benitez of the Colorado Party steps down. Preliminary results also showed the Colorado Party winning a significant share of seats in Congress.

Paraguay — a landlocked nation about the size of California in the heart of South America — is a major food and renewable energy exporter. Still, its economic growth has averaged about 1.2% in the last five years, and about a quarter of its 7.5 million people live in poverty.

Abdo Benitez’s term was marked by weak growth and high inflation due to punishing droughts, the Covid-19 pandemic, and soaring global food and energy prices. He survived two impeachment attempts, while policy blunders and corruption allegations took a heavy toll on his cabinet.

Corruption became a major issue in the election after the US government sanctioned Vice President Hugo Velázquez and ex-president Horacio Cartes, now Colorado Party chairman and Peña’s political mentor, for alleged corruption and ties to terrorism.

Peña promised to spend more on social programs, infrastructure and housing while leaving the country’s notoriously low taxes unchanged. Boosting growth by attracting more investment would provide the needed tax revenue to pay for that spending, he said.

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Peña has also pledged to maintain Paraguay’s alliance with Taiwan, which in practical terms means his country can’t directly sell its soy and beef to China.

Investors didn’t appear overly concerned ahead of the vote with the currency appreciating 1.4% year-to-date against the dollar. Paraguay’s global bonds returned about 75% during the same period, compared with average gains of 110% for peers in Central and South America, according to data compiled by Bloomberg.

Paraguay’s approximately 4.8 million registered voters also cast their ballots for all members of Congress, 17 governors and 257 departmental council members.

--With assistance from Patrick Gillespie and Maya Averbuch

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