Paraguay was an exception to the nineteenth century Latin American norm of the retardation of national industry by the Latin American estate bourgeoisie and merchants in alliance with the global powers. In Paraguay, the government of Gaspar Rodriguez de Francia (1814-1840) appropriated rural land, thus taking power away from the estate bourgeoisie and the merchants. The government of Francia and two successive governments successfully pursued a policy of independent economic development, investing economic surplus from agricultural production in the development of industry. By 1865, “Paraguay had telegraphs, a railroad, and numerous factories manufacturing construction materials, textiles, linens, ponchos, paper and ink, crockery, and gunpowder…. From 1850 on, the Ibycui foundry made guns, mortars, and ammunition of all calibers; the arsenal in Asunción produced bronze cannon, howitzers, and ammunition. The steel industry, like all other essential economic activities, belonged to the state. The country had a merchant fleet, and the Asunción shipyard turned out many of the ships flying the Paraguayan flag…. The state virtually monopolized foreign trade…. The trade balance produced a big surplus. With a strong and stable currency, Paraguay was wealthy enough to carry out great public works without recourse to foreign capital. It did not owe one penny abroad, yet was able to maintain the best army in South America” (Galeano 1997:189-90).
But from the point of view of British commerce, the only truly independent nation in Latin America in the nineteenth century was a “dangerous example” (Galeano 1997:191) that could demonstrate to its Latin American neighbors an alternative road. Paraguay was destroyed in a genocidal war of 1865 to 1870 conducted by a Triple Alliance consisting of Brazil, Uruguay and Argentina and financed by British bankers. By 1870, the population of Paraguay was one-sixth what it had been in 1865 and significant parts of its territory were ceded to the members of the Triple Alliance.
The country was subsequently turned into a typical example of foreign domination and free trade. “In defeated Paraguay it was not only the population and great chunks of territory that disappeared, but customs tariffs, foundries, rivers closed to free trade, and economic independence. Within its shrunken frontiers, the conquerors implanted free trade and the lafifundio. Everything was looted and everything was sold: land and forests, mines, yerba maté farms, school buildings. Successive puppet governments were installed in Asunción by the occupation forces…. National industry never came back to life” (Galeano 1997:194).
But nineteenth century independent Paraguay has come back to life in spirit, symbolized by the new efforts at Latin American autonomy being forged today by Cuba, Venezuela, Bolivia and Ecuador, with the support and participation of Brazil, Argentina, Uruguay, and Nicaragua. Similar to the mobilized effort to destroy independent Paraguay in the nineteenth century, today the neocolonial power seeks to destroy the new manifestations of Latin American autonomy. But nowadays, the world-system is suffering from a profound systemic global crisis, the neocolonial power is no longer the dominant power that it once was, and the anti-neocolonial movements are more advanced; the destruction of the independence projects forged by the peoples of the world is more difficult.
Galeano, Eduardo. 1997. The Open Veins of Latin America: Five centuries of the pillage of a continent, 25th Anniversary Edition. Translated by Cedric Belfrage. Forward by Isabel Allende. New York: Monthly Review Press.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, independence, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, capitalism, peripheralization, Paraguay