Santiago Pena, Paraguay’s new president, faces tricky balancing act

By Daniela Desantis and Lucinda Elliott

ASUNCION (Reuters) – Paraguay’s new president Santiago Pena takes office on Tuesday, a clean-cut economist for the conservative Colorado party who will need to juggle ties with Taiwan, pressure from farmers, rising crime and a U.S. probe into his political mentor.

Pena, 44, scored a strong win in April elections against a center-left opposition challenger, and helped the Colorado Party, the dominant political force for the last three-quarters of a century, secure a majority in both chambers of Congress.

But the political high-achiever must now maneuver a difficult path ahead.

His party’s diplomatic support for Taiwan has hurt local farmers’ grains exports to China, which claims sovereignty over the self-governed island. Taiwan Vice President William Lai is in Paraguay for Pena’s inauguration.

Relations with the United States will also be in focus after the U.S. government accused Pena’s political backer, former President Horacio Cartes, of corruption.

“I’m aware I have no margin for error and we can’t build something simply saying they gave me carte blanche,” Pena said in an exclusive interview with Reuters last week ahead of the handover. “We are constantly going to be scrutinized in every decision.”

Pena in the interview said he would push for a greater police presence in the streets to head off rising concerns about security, look to tame prices to avoid a cost-of-living crisis, ensure access to healthcare, and encourage private enterprise.

“We have a debt we owe to the people,” he said.

Pena also wants to create 500,000 new jobs in five years to boost the South American country’s farm-driven economy, dominated by soybeans and beef.

IN THE SHADOW OF CARTES

Those who know Pena described him to Reuters as “decent” and with “good ideas.” Others cite a contemporary mindset and steady hand. Critics say he is a member of the out-of-touch elite who lacks political experience and is just a puppet for Cartes.

Pena, who married his childhood sweetheart and became a father for the first time at 17, studied economics in Asuncion and later public policy at Columbia University in the United States.

He worked as an economist at Paraguay’s central bank and then with the IMF in Washington, before returning to Asuncion to join the central bank board. He became finance minister in 2015.

“He matured very quickly, being a young father… He became an adult very quickly,” a former colleague told Reuters. “Santi has a lot of life experience and is a natural negotiator.”

In 2016 his political career took off when Cartes hand-picked Pena as his intended successor. At first there were doubts from within the Colorado party, but five years later at the next election he got the nod – and won.

“Santi,” as he is often known, has pledged business-friendly policies focused on job creation, low taxes and attracting foreign investment. He has withstood pressure from farmers to stick with Paraguay’s decades-long diplomatic ties with Taiwan.

Speaking on condition of anonymity, one businessman with investments in Paraguay who knows Pena personally said the new president was not one to shake things up unnecessarily, but would push steady change.

“He is not a politician who wants a revolution, he wants evolution,” the businessman said.

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