Paraguay has a new head of state, Pedro Alliana. The man who held the vice presidency for the last three years assumed the new position late on Friday, replacing Santiago Peña, suddenly dismissed by Congress after the collapse of a bank with almost three million clients. Peña's responsibility for the financial fraud is in the hands of Justice: the Prosecutor's Office requested this Saturday preventive detention for him in the case investigating him for alleged breach of trust and administration for his own benefit.
This Saturday, Alliana began her administration with changes in the Cabinet that show that former president Horacio Cartes continues to pull the strings of power: the new ministers are figures close to the influential politician. The new president tried to bring peace of mind to those affected by the financial scandal and assured that everyone will recover their savings.
Alliana seeks to get the country back to normal as quickly as possible, but tension in the streets remains very high. The opposition and protesters accuse the new president of having been complicit in the financial fraud of Ueno Bank and of not having acted in time to prevent the million-dollar embezzlement. Street protests are calling for Alliana to also be dismissed and for early elections to be called for early 2027.
The Colorado Party, hegemonic in Paraguay for 70 years, is instead quick to turn the page. Alliana appointed Ariel Martínez to the Interior portfolio, the same position he held during the Cartes government (2013-2018) and from which he directed the police repression against protesters during the citizen protests of March 2017, in which a uniformed officer killed a young opponent. In Public Works he appointed Juan Carlos Baruja, another of Cartes' pet politicians. It is expected that in the coming days there will be new changes that will leave exiles from Peña out.
In his first hours as president, Alliana has promised to suspend trips abroad and stay to solve the country's problems, a position antagonistic to that of his predecessor, who traveled around the world to sell the rebirth of a “giant Paraguay” that was growing at high rates and was praised by international organizations.
The priority is to put an end as soon as possible to the banking corralito that prevents Ueno Bank clients from recovering their savings. Those who had small amounts of money in their account, up to $1,500, have begun to recover them. The refund will later be extended to other clients, for an initial maximum equivalent to 40 minimum monthly salaries, about 121 million guaraníes or $19,300. Banks will operate exceptionally this Sunday in Paraguay to serve those who want to open accounts and carry out procedures that allow them to recover their funds.
From the palace to prison
The public's anger over the Ueno Bank financial scandal was directed at the ousted former president on Friday night. Peña was placed under house arrest in his luxurious mansion in Asunción, but could not sleep a wink. Less than a hundred meters from the entrance, behind fences and a strong police cordon, a protest began that became increasingly larger. The protesters gathered there with drums and music equipment, shouting slogans: “The clown is down, the circus is missing!”, “Return the money from your pocket!”, “Stealing is a crime only for the poor,” “We are Paraguayans and we defend Paraguay.”
In the early morning, some young people threw stones at the riot police, broke down some fences and managed to get close to the residence. The police repressed to regain control and Peña was transferred to the military barracks of the Presidential Escort Regiment, responsible for the security of the leaders. In that same barracks, 37 years ago, the dictator Alfredo Stroessner took refuge on February 2, 1989, when the Armed Forces revolted to oust him from power.
This Saturday, the police took Peña to court to give an investigative statement. Hours later, the Prosecutor's Office reported that it is charging him with “the alleged commission of breach of trust, as the instigator, and administration for personal gain, as the author.”
The man who a few days ago was president of the Central Bank of Paraguay, Carlos Carvallo Spalding, was also arrested and charged. The Prosecutor's Office accuses him of "alleged commission of breach of trust, immediate production of public documents with false content and administration for his own benefit, as author."
According to the fiscal hypothesis, between 2023 and 2026 Ueno Bank received significant deposits and placements from public and pension entities, while carrying out allegedly irregular credit operations with companies linked to the Vázquez Group.
