Fernando Lugo, recently ousted President of Paraguay, from an appearance on El Ciudadano TV, April 19, 2011. (Photo: Presidencia de la República del Ecuador)It has been nearly two weeks since the parliament of Paraguay orchestrated an institutional coup that removed President Fernando Lugo from power and installed vice president Fernando Franco in his place, a mere 9 months before the next presidential elections.

Reading articles coming out of South America, I have been trying to wrap my head around not just what happened in Paraguay but what it could mean for the region. And I'm afraid it's not good. When one connects the dots – many of which require further investigation–it suddenly feels as though the gains that countries in the region have made toward multi-lateral cooperation in order to guarantee economic and political sovereignty and are dangerously vulnerable.

I have always been skeptical of claims by Hugo Chavez or even anti-militarist voices here in the region that believe that the U.S. has not let go of its plans for the region in its fulfillment of "Full Spectrum Dominance"—controlling natural resources indirectly through elite puppet governments and directly through the threat of military force. Between the U.S' refocus on the Middle East and the rise of left-leaning governments in Brazil, Venezuela, Bolivia, Argentina, Ecuador, and Uruguay, the idea of the region falling victim to the kinds of imperial/neoliberal bullying of the 70s, 80s, and 90s seemed both politically overblown and strategically unfeasible.

I am no longer so sure.

Because when looking at the powers at play in Paraguay it becomes clear that the past is not so far behind. They are the powers behind this unbelievably sordid coup, an event that appears to have been merely a step toward fulfilling longstanding agreements made between the Paraguayan oligarchy, multinational agribusiness interests, and the United States. By no means was Lugo an obstacle, but he wasn't serving their interests quickly enough. Moreover, his willingness toward regional cooperation in bodies such as UNASUR and Mercosur — from which Paraguay has now been expelled— was also endangering the security of these moneyed and military interests.

Why Paraguay?

One of the poorest countries in South America, land-locked Paraguay is often overlooked. This is a big reason why a parliamentary coup was possible here and not somewhere with greater global and regional influence like Brazil. Paraguay is not however overlooked by the biggest multinationals in agriculture nor the U.S. military. In many ways the country is a metaphorical petri dish for the region: the political, economic, and ethnic issues can be seen in the extreme. Sixty percent of the 6.5 million Paraguayans live in poverty. Much of the poverty has to do with the fact that while the economy is entirely based on agriculture Paraguay has some of the hugest concentrations of land in the region: 85% of the land is in the hands of 2% of the population. It is in essence a deeply feudal country. Small campesino famers and indigenous Paraguayans who are subsistence farmers have been systematically and forcibly removed from their land to make way for large scale soy and cotton plantations. Violent repression of campesino movements—like the events in Curuguaty that became Parliament's excuse for removing Lugo –have been occurring in Paraguay for over a decade now as the land conflicts have grown more acute with the expansion of agribusiness.

Politically, rule over Paraguay had been in the hands of the Colorado Party for 61 years until the 2008 election of former Catholic bishop Fernando Lugo, a supporter of indigenous rights, land reform, and social welfare programs. But though his party, The Alianza Patriotico para el Cambio (Patriotic Alliance for Change) initially had the support of a grassroots popular front, it never had support of a majority of seats in Congress. And vice president Fernando Franco of the Liberal Party never hid his dissent with Lugo nor his ambitions for the presidency.

Contrary to his pre-presidential track record, Lugo as president did very little to further campesino cause and actually push through land reform. Violent evictions and the criminalization of protest continued and ultimately Lugo both demobilized and alienated the movements that had initially supported him. Without a broad base of support neither inside nor outside Congress, his removal was an easy maneuver led by the two major parties, Colorado and Liberal.

The curious and critical fact in all of this is that the land in Curuguaty from which the group of campesinos was brutally evicted by more than 300 police on June 19 belongs to a former and long-time Colorado Party senator, Blas Riquleme. It's therefore not hard to believe what many have called the impetus for Lugo's impeachment: a trap. But the underhandedness goes on.

Foreign interests, local friends

Beyond simply the old ruling parties wanting to keep their grasp over the country, there are deeper interests at work in the coup against Lugo.

First and foremost is agribusiness. None other than the infamous Monsanto is a major player in Paraguay. The company collects royalties on the transgenic soy and cotton seeds planted throughout Paraguay, and in 2011 it collected $30 billion tax-free. And 40% of the production and refining of Paraguayan soy is owned by private U.S.-based giant Cargill ($100 billion annual profits a year). Again, agribusiness giants in Paraguay enjoy broad protections from Congress and pay no taxes.

These agro-giants among others have denied involvement in any violent evictions in Paraguay. And of course they aren't involved. It's the thugs hired by landowners who are looking to expand and turn a higher profit on their Monsanto seeds that do the dirty work. More on those landowners later.

To protect themselves, these companies have their national alliances. One is to the major agricultural producers unions in Paraguay and the other is to the media. Cargill, Syngenta, and Agrosan are all apart of the business group, Grupo Zuciollio (Zuciollio Group), which gets its name from Aldo Zuciollio, the owner of one of the major Paraguayan newspapers ABC Color.

According to Paraguayan investigative journalist Idilio Mendez Grimaldi, one of the reasons behind Lugo's removal was his cabinet's unfavorable stance toward the release of Monsanto's transgenic cotton seed into the country. After the head of the National Service for the Quality of Seeds, the Minister of Health, and the Minister of Environment did not green light the seed's release into the market, ABC Color led a smear campaign against accusing them of corruption.

Washington's Role: Southern Command & USAID

Though countries like Ecuador have put stops on U.S. military personnel by refusing to send Ecuadorian troops to the School of the Americas and not renewing their contract for a U.S. military base, U.S. military presence in the region is unfazed. When one base shuts down another opens, usually in Colombia (11 sites with U.S. access), Peru (8 sites with U.S. access), or Paraguay.

Paraguay is home to two U.S. bases: the Mariscal Estigarribia that is located merely 155 miles from Bolivia and boasts a 10,000 foot-long airstrip built for large aircraft, and the DEA base Pedro Juan Caballero on the border with Brazil at which U.S. Southern Command runs regular military exercises. Though in 2009 Lugo stated his rejected the expansion of U.S. Southern Command operations in the country, it has had broader access to Paraguay since 2005, when former president Nicanor Duarte Frutos granted an 18-month stay and immunity to the over 400 U.S. soldiers that entered the country. As far as anyone knows, those Southern Command forces are still active and may have expanded.

Much of the U.S. military influence in the country stems from the signing of the Northern Zone Initiative (IZN) that many refer to as Paraguay's equivalent of Plan Colombia in its allowance of "humanitarian assistance". It was signed with the U.S in 1961, during the military dictatorship of Alfredo Stroessener. Since the "fall" of the dictatorship in 1989 (in quotes because it was an agreed upon transition to democracy without removing military generals from power) the IZN agreement has never been debated in the Paraguayan Congress.

Another important piece of the mystery behind the massacre at Curuguaty is that the special Paraguayan operation forces (Grupo Especial de Operaciones, GEO) that led the raid on the campesinos were trained by U.S. Southern Command in Colombia as apart of the Plan Colombia framework. Six police officers including the head of the GEO also died in the incident, which the campesino group Coordinadora por la RecuperaciÓn de Tierras Malhabidas (Coordinator for the Recuperation of Ilegal Land) says was escalated by the presence of armed infiltrators. More than a trap, perhaps Curuguaty was a set up.

A key piece to U.S. involvement in Paraguay is USAID, which works closely with the Paraguayan Supreme Court, the Hacienda Ministry, and security organisms. USAID's role in the region has been well documented as a force of destabilization hiding behind humanitarian aid. As investigators Jeremy Bigwood and Eva Golinger revealed in 2009 after obtaining declassified documents, USAID has poured over a billion dollars into "decentralization" efforts in Bolivia and $60 million in Venezuela. By setting up various Offices for Transition Initiatives (OTIs) and funding anti-government non-profits, USAID has promoted separatist and opposition movements in both countries to further a pro-Washington agenda.

In December of last year, the Colorado Party signed an agreement with the Resource Information Center (CIRD), the local arm of USAID, which proposed greater inter-party "dialogue." The head of the CIRD is Alavaro Carrizosa, relative of former presidential candidate and senator Manuel Carrizosa of the party Patria Querida that joined with the Colorado and Liberal parties in voting to oust Lugo.

If this weren't enough, the current U.S. ambassador to the country is Liliana Ayala, none other than the former director of USAID in Bolivia. Her predecessor was James Cason, who before being ambassador directed the U.S. Interests Section in Havana, essentially the anti-Castro propaganda/Cuba destabilization wing of the State Department. In 2010, Deputy Secretary of Defense for the Western Hemispheric Affairs and author of Paraguay and the United States: Distant Allies, Frank Mora, was received by then vice president Fernando Franco. In their meeting, Mora spoke of continued and greater U.S. military cooperation in the country and interest in furthering the IZN.

Fragility and importance of regional solidarity

Following last Friday's coup, the Union of South American Nations (UNASUR) and the economic body Mercosur expelled Paraguay as a member. But in many ways, this is perhaps what the Paraguayan political oligarchy and the U.S. wanted. UNASUR and Mercosur represent regional agree

ments of cooperation, democracy, national sovereignty, border security, biosecurity, militarycoordination and defense, and the limiting of U.S. intervention—commitments that essentially limit the power of multinationals and Washington.

Paraguay was the last country to join UNASUR, and when Lugo signed the Mercosur's democracy clause that outlawed national destabilization, newspaper ABC Color accused the former president of handing over national sovereignty. The paper also reported on how the border security agreements would negatively affect the soy plantations on the border of Brazil. Ninety percent of Paraguayan soy is produced by landowners commonly referred to as 'Brasiguayos' along the lush and lawless no mans' land that is the Brazil-Paraguay border. Much of the violence against campesinos and indigenous discussed above has been perpetrated by these Brasiguayos.

Immediately after the coup, a Paraguayan delegation/lobby flew to Brazil to try and meet with president Dilma Rouseff. Though she declined, the lobby did meet with the Agricultural Parliamentary Front that represents 230 Brazilian legislators. At the meeting, Homerio Periera, president of the front and congressman of the Matto Grosso –the Brazilian province that has come to be a global emblem of deforestation in the name of soy profits –expressed his support for the new government.

The Paraguayan Congress had also been the sole body preventing Venezuela's entrance into Mercosur. Now that the country is banned from the body until the country's next eletions, Mercosur will welcome Venezuela into its midst as of July 31st.

What it all means

This coup is a test of whether or not Mercosur and UNASUR have any bite to their bark, or if their agreements for regional independence live only on paper. Though too early to be sure, it seems that both will allow Paraguay's re-entrance after the country's elections in April 2013. It is a decision that should no be taken lightly, as the powers behind the Paraguayan coup reveal that national economic growth—in a large part from the sale of natural resources –comes tied to the political obligation to protect multinational, landowning, and U.S. interests. Despite their talk against neoliberalism, center-left governments such as Brazil and Argentina thrive off of and cater to the same sectors that both temper their politics and could potentially threaten their country's stability. In countries like Bolivia and Venezuela that have more openly defied their national elite by taking bolder steps toward things like land reform and nationalization, the response has been coup attempts and as described above and overall destabilization. But unlike in Paraguay, these attempts have so far been unsuccessful.

Interestingly, Grimaldi believes that it was precisely Lugo's belief that he could "govern with imperialism, with the feudal oligarchy and with the right-wing parties" that led to his defeat. It is a danger that Argentine political scientist Atilio Boron refers to as a "timidly progressive" government that is unable to convoke a broad social movement support and left parties to its side.

Without concrete regional efforts to reign in the power of the U.S. military, USAID, multinationals, and local political oligarchies, what happened in Paraguay becomes a loud and clear warning to the region that the phantoms of Latin America's past are haunting once again.