Vice President Pedro Alliana is set to take office as his replacement, after Paraguayan President Santiago Pena resigned on Thursday as calls for his removal swelled following the collapse of digital lender Ueno Bank. Alliana will serve the remainder of Pena term, which was scheduled to end in 2028, and he inherits a country in the middle of a financial crisis, a political crisis, and a public reckoning with the ties between its government and its banks. The transition is constitutionally straightforward. The governing that follows will not be.
Why it matters
Alliana first task is the depositors. Ueno Bank claimed more than 60 percent of Paraguay adults as customers, about three million people in a country of 6.5 million, and its app, cards and transfers went dark when the central bank seized it on Tuesday. The central bank has announced plans to move customer accounts, along with whatever assets still hold value, to other banks before liquidating what is left, and it has announced phased repayments for depositors. For families who need their savings now, a phased plan is a promise that must be kept quickly, and Alliana credibility will be measured by how quickly the money moves.
His second task is the politics of the succession itself. Pena resigned minutes before lawmakers voted to launch impeachment proceedings against him, and the lower house then voted 78 to 0 to impeach him, sending the charges to the Senate. Congress called an extraordinary session of both chambers to decide whether to accept the resignation or to reject it and proceed with the impeachment process. Alliana was not the target of the impeachment vote, and lawmakers rejected the same measure against him, which gives him a cleaner start than a successor chosen in the middle of a trial would have had.
What happens next
His third task is the party. Pena lost the support of his own conservative Colorado Party, a stunning reversal for a former International Monetary Fund economist who had enjoyed the backing of the country most powerful politicians and who was welcomed in Washington just weeks ago as a key ally of the Trump administration. Alliana must now hold that party together while distancing himself from the scandal that brought it down, and while answering the questions that Pena resignation left open: what did the government know about Ueno Bank, when did it know it, and why did it act only when the bank was already failing.
What happens next will be decided by the depositors, the Congress and the courts. The eight Ueno executives who were detained, including founder Miguel Vazquez and bank president Juan Manuel Gustale, face investigation, and the full story of the bank lending, its public deposits, and its political connections has yet to emerge. Alliana has the advantage of a clear constitutional mandate and a party that wants stability. Whether he has the time, and the trust, to use it will be decided by how quickly Paraguayans get their savings back, and by whether the crisis produces reform or only a change of faces.
