Violence Follows Monday's Clashes, When 2 Protesters Were Killed and 239 Arrested

By Brian Winter
Reuters

ASUNCION, Paraguay—Police fired rubber bullets and tear gas at hundreds of protesters blocking major highways in Paraguay on Tuesday, as calls grew for the
unpopular president to resign one day after deadly riots.

At least four people were injured when police dispersed protesters angry over a grueling recession in this nation of 5 million people. But the violence paled in
comparison to Monday's clashes, when two protesters were killed and 239 arrested.

Thousands of rifle-toting police patrolled the mostly quiet streets of the capital Asuncion, where many stayed home from work after the government declared a state
of emergency on Monday to halt chaotic protests.

Police warned they would use force if necessary to clear roadblocks across the landlocked South American nation by protesters demanding the resignation of
President Luis Gonzalez Macchi, besieged by economic slump and soaring unemployment.

"The situation today is calmer, more controlled, but we will continue acting to meet the terms of the decree that establishes the state of emergency," a police
spokesman told Reuters.

But many people on the street said they expected further unrest, with Paraguay's mostly contraband-based economy suffering from economic crises in neighboring
giants Argentina and Brazil as instability spreads across much of Latin America.

"The situation just gets worse and Gonzalez Macchi is a corrupt thief," said Alberto, a truck driver waiting for a bus downtown as he suspiciously eyed a policeman
standing guard on the corner. "People want a change at the top."

MORE TROUBLE AHEAD?

Gonzalez Macchi's increasingly unpopular government blamed the protests on exiled former general Lino Oviedo, the alleged mastermind behind several failed coup
attempts over the last decade in the impoverished, chronically unstable country.

Vice President Julio Cesar Franco, leader of the opposition party and widely believed to be an ally of the populist Oviedo, joined a growing chorus of calls by top
politicians and protesters for Gonzalez Macchi to step down.

Political observers said the protests were likely to calm down, at least for a while, due to the state of emergency across the California-sized country which allows the
government to search people's homes and break up "public meetings" without cause.

"Paraguay has a long history of revolution, but it has never come straight from popular protests," said Milda Rivarola, a sociologist. "Oviedo has organized this
(protest) as a way to increase the pressure on Gonzalez Macchi, and then maybe you'll see change come from the top."

Oviedo, in exile in Brazil, was due to meet officials there on Wednesday to explain allegations he was inciting the protests.

Video tapes obtained by Brazil's Globo media group show Oviedo hosting a rally for some 2,000 Paraguayans early last month in a Brazilian town just across the
border with Paraguay during which he slammed the government of Gonzalez Macchi.

Paraguay's frail banking system has suffered a run over the past month as many fear a repeat of the financial crisis seen in Argentina, where many deposits have been
frozen amid a devastating four-year recession.

Monday's riots coincided with the arrival in Asuncion of a team of officials from the International Monetary Fund, with which the government is negotiating for a
standby loan to shield it from the growing regional turmoil.

Economists estimate nearly half of Paraguay's economy, stagnant or shrinking since 1995, depends on the smuggling of goods like cigarettes, VCR's and fake
brand-name clothes. Others work as landless subsistence farmers.

The impoverished country, dotted with subtropical forests and ruins of Jesuit missions, has never managed to achieve democratic stability since dictator Alfredo
Stroessner was ousted in a coup in 1989, ending 35 years of what was long one of South America's most notorious police states.

                                                        © 2002 Reuters