Paraguay’s Persian Presence: Iran’s New Friend in Latin America

Paraguay’s poor were graced with the electoral victory of a former Catholic bishop, Fernando Armindo Lugo Méndez, in the April 20th presidential election. On August 15, Lugo was inaugurated as president of Paraguay which commenced the country’s first left-leaning presidency in over 70 years. Fellow leftist Latin American leaders applauded his triumph over the conservative Colorado Party’s 61-year hold on the nation and anticipate a new reformist Paraguay arising from the Lugo presidency. His ideology and politics foreshadow a Paraguay independent from Washington’s influence.

Lugo’s established fame and the prospect of broad changes in Paraguay are breaching the boundaries of Latin America to become an issue of worldwide interest. Iran’s President Mahmoud Ahmadinejad was one of the first to congratulate Lugo on his victory. Iran’s media praised Lugo by calling him “a man of God and an enemy of the Great Satan.” Ahmadinejad hopes to balance America’s presence in the Middle East by creating his own allies in the Western Hemisphere, and Lugo’s victorious presidential campaign gives Ahmadinejad another friend in what Washington has traditionally considered its traditional backyard. The large Muslim population in Paraguay’s tri-border region (where Paraguay, Brazil, and Argentina meet) aided Lugo’s campaign for presidency through fund-raising drives that have been supported by Iran and Venezuela.

It did not take long, however, for the former bishop to encounter political setbacks. On July 10, Lugo encountered problems with his hand-picked team of administrators when Milda Rivarola withdrew from her position as future foreign minister. Lugo offered the vacancy to Paraguay’s ambassador to Lebanon, Alejandro Hamed Franco, of Middle Eastern background, and by July 23 he was confirmed in his new post. His appointment was sure to create tensions with the State Department due to his sympathies with anti-U.S. developments in the Middle East and his acknowledged connections with U.S.-banned groups, in addition, he was accused of awarding Paraguayan passports to Lebanese citizens, although he claims this was only for those who were trying to escape Israeli attacks in 2007. The U.S. had advised Lugo against awarding Hamed the post of foreign minister and reminded the incoming president that, as a supporter of Hamas and Hezbollah – considered terrorist organizations by the U.S.—the new foreign minister will be denied a U.S. visa and will not be allowed to fly on U.S. airlines.

Iran’s growing presence in Latin America
Washington’s presence in the Middle East and its continuous attempts to isolate Iran in the international arena have galvanized President Ahmadinejad’s “aggressive foreign policy.” Since Ahmadinejad’s inauguration in 2005, Iran’s foreign policy focus has shifted from Africa to Latin America in order to, as Ahmadinejad puts it, “counter lasso” the U.S.

Economic dividends are attracting an ever-growing Iranian presence in Latin America. OPEC has been one vehicle for Iranian/Latin American cooperation. Initiated by Venezuela in 1960, this global cartel now has two Latin American member states, after Ecuador rejoined last year. With both Brazil and Bolivia now prospective new members of OPEC, Iran expects to do more crude business with several Latin American clients.

Iran’s economic ties with several Latin American countries (namely Venezuela, Brazil, and Cuba) have developed far beyond oil. Venezuela and Iran are now gingerly engaged in an ambitious joint project, putting on-line Veniran, a production plant that assembles 5,000 tractors a year, and plans to start producing two Iranian designed automobiles to provide regional consumers with the “first anti-imperialist cars.” Iran continues to welcome Brazilian products, with the value of Brazil’s exports to Iran reaching over $1.5 billion in 2007. As of January 2008, Quito has had a functioning Iranian trade office which hopes to strengthen Tehran’s commerce with Ecuador.

Although bilateral economic ties are being pursued in order to add flesh to the Iranian-Latin American relationship, the backbone to the partnership is political: both share a professed hostility towards American imperialism. This harmonic duet of anti-American tunes played by Iran and Latin America’s “pink tide” musicians has become Washington’s “axis of annoyance.”

Since Ahmadinejad’s ascendency to power, he has made three diplomatic tours to Latin America. He visited Venezuela in July of 2006; Venezuela, Nicaragua, and Ecuador in January of 2007; and Venezuela and Bolivia in September of 2007. Ahmadinejad also had hosted President Chávez of Venezuela and President Ortega of Nicaragua in Iran. Nicaragua received a $231million loan from Iran in 2007 to build a hydroelectric dam. In August of 2008, Nicaraguan-Iranian relations were further consolidated when Ahmadinejad donated $2 million for the construction of a hospital. Venezuela and Brazil have publically announced their support for Iran’s nuclear energy program. President Lula of Brazil has been quoted as saying, “[Iran] should not be punished just because of Western suspicions [that] it wants to make an atomic bomb.”

Given Washington’s efforts to sully Iran’s reputation, the latter’s “aggressive foreign policy” should come as no surprise. Ahmadinejad now desires to counter Washington’s efforts to isolate Iran through his integrating movements in Latin America. Predictably, this has caused tension in the U.S. Norman Bailey, of the Institute of World Politics, recently testified to the Western Hemisphere Committee in the House of Representatives that Venezuela is a “clear and immediate” threat to U.S. national security, “especially if it increases its ties to the Islamic Republic of Iran.” Washington’s fears may be exaggerated, but there does appear to be some Islamic terrorist activity involving Iran that is fermenting in South America, especially in the tri-border area.

Terrorist action in the tri-border area
The tri-border area is rife with charges of illicit activity. The three cities said to act as bases of operations for this are Ciudad del Este in Paraguay, Foz do Iguaçu in Brazil, and Iguazu in Argentina. The area’s porous borders, thriving black market, money laundering and drug trafficking have given the region a sense of lawlessness. According to a Brazilian newsweekly, Veja, Osama bin Laden visited the region in 1995. Evidence now seems to verify the establishment of terrorist cells, the most prominent of which is the Iranian-supported Hezbollah. There are also cases of Al-Jihad (Egyptian Islamic Jihad), Al-Muqawamah, and even Al-Qaeda cells. Brazilian and Paraguayan anti-terrorist patrols have secured some evidence of an Arab extremist training camp located right outside Foz do Iguaçu. After September 11, 2001, the tri-border area was subjected to a series of investigations and raids, yielding 20 terrorist suspects.

Although only a minority of the Arabs and Muslims in the tri-border area are said to support Hezbollah, they are purportedly proud of their affiliation with fund raising for their Middle Eastern counterparts. The U.S. estimates that more than $6 billion is laundered annually in Ciudad del Este alone, a figure equivalent to nearly 50 percent of Paraguay’s gross domestic product. Following September 11, Paraguayan police apprehended two alleged terrorists working in Ciudad del Este who had sent $50,000 a month to Hezbollah.

The Argentine Gambol
Argentine officials also have presented evidence linking terrorist acts to pro-Iranian groups in the tri-border region. The Israeli embassy in Buenos Aires was bombed on March 17, 1992, killing 22 people. Years later, an Argentine court concluded that the attack was orchestrated by Islamic Jihad, a branch of Hezbollah, and that the attack was orchestrated from the tri-border area. Buenos Aires’ Jewish community was hit again on July 18, 1994 when its social center, the Argentine-Israeli Mutual Association (AIMA), was bombed, resulting in 85 casualties. On November 28, 2000, Salah Abdul Karim Yassine, a supporter of Hamas and an expert in explosives, was arrested for his alleged connection with a conspiracy to strike U.S. and Israeli embassies in Assunción, Paraguay. Yassine entered Paraguay illegally with false documents and found a haven in the tri-border area’s Ciudad del Este. This notorious region was quartered in red tape after each one of these terrorist attacks.

Will the new Lugo administration, especially with a foreign minister allegedly sympathetic to Hezbollah and other extremist Middle Eastern factions, allow terrorist cells more room to operate in Paraguay? Will Washington find another battle front against terrorism in South America?

Paraguay joins the “axis of annoyance”?
Prospective Foreign Minister Hamed has publicly announced that he plans to strengthen ties with the Middle East. However, in seeming contradiction to Hamed’s anti-American and anti-Israeli stand, he aims to open a Paraguayan embassy in Tel Aviv. Currently no significant trade exists between Iran and Paraguay. Paraguay’s terrain, unspotted by oil pumps, does not produce petroleum and must import 25,940 barrels of oil a day. Ahmadinejad could easily use Iran’s oil as a bargaining tool with the Lugo administration. Indeed Iranian oil could very well fuel Latin America’s drive to the left. With President Lugo receiving Iranian blessings, his new foreign minister avowedly connected to pro-Iranian, banned parties, along with a substantially active Muslim population, one can only expect Paraguay will become for Ahmadinejad a new political attractant.