Paraguay is facing its worst political crisis in years after the dramatic collapse of ueno bank — a digital lender with nearly 3m clients and some $850m in public deposits — locked half the population from their accounts and left businesses, workers, and pensioners reeling.
Hundreds of protesters gathered for the second night running outside Congress chanting “We want our money” and “Santi to Tacumbú,” referring to the president, Santiago Peña, and the notorious Asunción jail. Peña held shares in ueno holding, a sister company of the bank, until last year.
The Paraguay Post spoke to medical professionals, small business owners, and domestic employees who described waking up on Tuesday morning with no way to access their money, leaving them unable to buy groceries and fearing for their retirement funds.
“I’m heartbroken,” said one 56-year-old domestic worker from Luque, a satellite city of Asunción. She described how her entire family had lost access to their accounts with ueno, which was taken over by the Central Bank after it rapidly slid into insolvency. “We don’t know where to turn.”
As the crowd neared the Palacio de López, where Peña conducts official business, riot police fired water cannons and tear gas, soaking a defiant demonstrator in a wheelchair.
Opposition lawmakers, reportedly joined by dissident members of the Colorado Party, meanwhile scheduled an impeachment vote at 10am today local time. They say they have the votes to remove Peña, accusing him of misuse of public funds, conflict of interest, and institutional cover-ups.
The vice-president, Pedro Alliana, also faces impeachment. If that happens, senate president Basilio “Bachi” Núñez, also a Colorado, is next in line to become president as per the constitution.
Unsubstantiated claims swirled last night that Peña was considering resigning — and had even been offered help by the US Embassy to leave the country. Peña’s office categorically denied such “rumours”. Reports showed the president had convened around 30 lawmakers at the presidential residence, Mburuvicha Róga.
Pivotal to whether Peña remains in office or is removed will be Horacio Cartes, the powerful ex-president. Currently the elected leader of the ruling Colorado Party, Cartes sanctioned for corruption by the Biden administration for allegedly bribing legislators and party members to do his bidding.
Formerly close allies, Peña and Cartes have recently fallen out, partly over Peña’s ties to ueno. The wealthy businessman has issued hedging statements, saying the Colorado Party “was ready to collaborate to overcome this situation” but saying it would “be on the side of the people” and “demand that justice is done.”
UPDATE 09:49 local time: In a statement, Cartes has said he will accompany the impeachment vote against Peña.
Meanwhile, analysts and industry voices consulted by the Post stressed the broader damage the crisis will inflict on Paraguay’s institutions, its reputation among investors and international partners, and the balance sheet of companies that stored money with ueno but — like individual savers — are only guaranteed to get up to $38,000 of their money back.
Because the Post is on the ground and free from government and corporate censorsponsorship, we were able to warn about the risks of Ueno’s ballooning business with the state and ties to Peña administration officials over a year ago: well before the bank’s myriad weaknesses were on the radar of the foreign press.
This is a difficult and complicated moment for Paraguay. As our heart goes out to everyone who has been affected, The Paraguay Post is also working round the clock to understand what what the crisis means for locals, expats, investors, foreign partners, and anyone who cares about Paraguay.
Today at 11am local time, we’ll be holding a call with our paid subscribers to discuss ueno’s collapse, Peña’s possible impeachment, and what comes next. The signup link is below the paywall.
NB: If impeachment proceeds, we’ll still hold the call. There will be even more to talk about.
If you’re not a paid subscriber, you can claim a months’ free trial by tapping this link. After that, you can pay either $7/month or $60/year, access our flagship Weekly Post briefing, and cancel at any point with a few clicks.
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