ASUNCION, Paraguay — Along Avenida Republica in downtown Asuncion stands the gleaming facade of the $20 million Legislative Palace, where well-tailored congressional aides on their cellphones come and go and armed police guard the Legislature that just impeached one president and installed another.
Across the street, a trash-strewn tent camp dominates a public park where residents of a shantytown scheduled for demolition have been protesting for the last year and a half. Pigs and dogs root in the dirt, as flames lap at the grate of a rudimentary cooking pit.
The stark contrast tells the story of a divided people living under the same red-white-and-blue-striped flag.
In one Paraguay, GDP has risen for three straight years and tony nightclubs and steak dinners are commonplace. In the other Paraguay, comprising more than half of the country's 6.5 million people, putting food on the table is a daily struggle and home may be a dirt-floor shelter with no electricity, toilets or running water.
The political crisis in this South American nation is grounded in the tensions between the landed and the landless, which came into sharp relief June 15 when a clash over disputed property left 17 people dead and provoked the impeachment a week later of President Fernando Lugo.
But the roots of the crisis stretch back 140 years, and prevail through an intractable pattern that keeps about 1 percent of the population in control of 77 percent of arable land, while 55 percent of Paraguayans are poor and 31 percent live in extreme poverty by a U.N. count.
Paraguay's poor hoped they had found their savior when Lugo, the bearded and sandal-clad "bishop of the poor," won the presidency in 2008 on campaign promises to deliver land reform, ending the conservative Colorado Party's six decades of single-party rule.
Yet during four years in office, Lugo achieved little meaningful reform.
"It's amazing how that land question again has become the Achilles' heel of Paraguayan politics and of this government in particular," said Miguel Carter, a Paraguayan political scientist specializing in South American land issues at American University in Washington. "Symbolically, the fact that this massacre of 17 people triggered this onslaught is telling."
Agriculture keeps the tiny economy of landlocked Paraguay sputtering along. The two largest exports are soy and beef, and the farm sector last year generated nearly 30 percent of the government's annual revenues of $8 billion.
Yet with big agribusiness dominant, the average countryside dweller sees little of that wealth. Between 74,000 and 300,000 people are landless, according to varying estimates. Paraguay is the region's most unequal in land concentration, trailing countries like Brazil, where land problems are at least cushioned by a more industrialized economy.
In Paraguay, the imbalance dates back to around 1870 when the country began unloading terrain to pay off a crippling war debt. The selloff sped up under strongman Gen. Alfredo Stroessner's 1954-1989 rule, when large agribusiness took hold and 20 million acres passed to private buyers, many of them friends of the regime.
The post-Stroessner constitution gives lawmakers wide leeway in checking the president. With weak support in congress against strong conservative opposition, the 61-year-old Lugo apparently never felt confident enough to push comprehensive land reform.
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