Plucky Paraguay may be most corrupt country on planet

Paraguay, this remote land in the steamy heart of South America, just missed a championship title last year

Paraguay, this remote land in the steamy heart of South America, just missed a championship title last year. But plucky Paraguayan politicians and businessmen may get it for their country this year.

According to Transparency International, the German-based agency which examines and fights corruption worldwide, Paraguay was beaten to the title of the world's most corrupt country in 1998 only by Cameroon. But Jose Antonio Bergues, director of the local chapter of TI, implies resignedly that there is a chance of winning the championship this year.

This week five million Paraguayans commemorate the 10th anniversary of the overthrow of Gen Alfredo Stroessner, the dictator who had ruled them for 34 years through seven spoof elections. Stroessner, who now lives in gilded exile in Brazil, was the man who put them on the road to the corruption championship of the planet. Though a decade has passed, the training he gave them to become the world's best is still valuable and should stand them in good stead in 1999.

The all-pervasive atmosphere of corruption stemmed from the old man's burning desire to hold on to power at all costs. He sought and obtained the support of Washington by presenting himself as an anti-Communist. In 1965 he sent Paraguayan forces to help the US army in its invasion of the Dominican Republic in support of a beleaguered right-wing military government there.

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Stroessner also needed to ensure the loyalty of the armed forces. This he obtained by farming out nice little earners to senior officers; a little whisky smuggling here, a piece of the drug trade there, a franchise on the sale of stolen cars imported from neighbouring Brazil round the corner.

But the real and lasting monument to Stroessner's corruption, according to Ricardo Canese, an academic who was for long forced into exile in Europe by Stroessner, is the Itaipu hydro-electric scheme, a joint venture with Brazil built across the Parana River which forms the countries' common border.

It is a worthy monument. By far the largest power generation project in the world, dwarfing every other one on the planet, it generates 12,600 megawatts of energy and supplies a quarter of Brazil's total needs. (By contrast ESB's Ardnacrusha on the Shannon generates 86 megawatts.)

It cost $19 billion and, according to Canese, could have been put up for no more than half that huge sum had not the Paraguayan and Brazilian military kept the books from public view and vastly inflated the bills. It has, he claims, spawned a generation of rich people, beneficiaries of the construction.

The main Paraguayan contractor was Conempa, run by Juan Carlos Wasmosy, a struggling businessman who was later patronised by Stroessner. Associated with Wasmosy was another businessman, Raul Cubas, who, in his turn, forged links with an aspiring Gen Lino Oviedo.

Cubas is Paraguay's present president, Wasmosy was president until last year and Oviedo wants to become president. "Politics in this country revolves around the money made out of Itaipu, cleanly and dirtily," says Canese.