Officially at least, Brazil is very unhappy about political developments in Paraguay. Recently, in a kangaroo process akin to a "quasi-coup", President Fernando Lugo was ousted from power in Asunción by his country's right-wing Congress. In a stunning rebuke, legislators accused Lugo of encouraging land seizures which resulted in violent clashes with security forces.
In a sham, the Senate gave Lugo a mere two hours to defend himself in a public trial. When Lugo's lawyers requested more time to argue their case, they were rebuffed by the president of the Senate. Then, in an upset, Lugo's right-wing Vice-President Federico Franco assumed his old boss' job.
Brazil, which lies just across the border from Paraguay, has expressed grave displeasure about unfolding political chaos in Asunción. Shortly after Lugo was removed from power, the use of the neologism golpeachment - a combination of the Portuguese words for impeachment and coup - rapidly began to spread throughout Brazilian social networking sites.
Responding to rising outrage in civil society, the Dilma Rousseff administration voted to suspend Paraguay from South American trading bloc Mercosur, a move which prompted a strong rebuke from the new de facto Franco administration in Asunción. Brazilian Foreign Minister Antonio Patriota, however, was hardly intimidated by such protests. Sticking to his guns, he remarked that Paraguay's suspension sent "a clear message" against any "anti-democratic adventures".
Rousseff, a protégé of former Workers' Party (or PT) President Luiz Inácio "Lula" da Silva, has plenty of reasons to be upset about the alarming developments across the border. An ideological kindred spirit of sorts, Lugo was elected four years ago on promises that he might overturn Paraguay's entrenched and unequal system of land tenure.
A former bishop, Lugo moreover espoused progressive doctrines such as "Liberation Theology" within the Catholic Church. Though such views put Lugo at odds with Paraguay's right-wing Colorado Party, they were surely embraced by the Brazilian left.
Indeed, Brazil's Landless Peasant Movement (or MST), which has been historically allied to the PT, protested the golpeachment in Paraguay and urged Rousseff to adopt decisive measures against the Franco government, such as economic sanctions and the cancellation of joint financial projects.
A vexing foreign policy dilemma
Yet, for Rousseff, Paraguay represents a vexing foreign policy dilemma. Brazil receives electrical power from the huge Itaipu Dam located on the Brazilian-Paraguayan border, and can ill afford to alienate the new Franco regime in Asunción. The dam is jointly owned by both Brasilia and Asunción, but Paraguay only uses five per cent of its 50 per cent share of the power and sells the rest back to Brazil. Americas Quarterly notes: "The electricity that fattens the Paraguayan coffers also supplies São Paulo state, Brazil's industrial engine, with power."
In addition to energy, Brasilia has concerns over border security. Along the long and porous Paraguayan frontier, traffickers smuggle in drugs and illegal arms and this contributes to rampant crime in Brazil's dangerous favelas. If the Rousseff government were to cut ties with the new Franco regime, border collaboration might grind to a standstill, an eventuality which Brasilia no doubt seeks to avoid.
Moreover, Rousseff must tread diplomatically so as to not offend delicate Paraguayan sensibilities. Asunción is notoriously "thin-skinned" regarding any hints of Brazilian imperialism, which is certainly understandable in light of their shared history. In the 19th century, Brazil opposed Paraguay in the War of the Triple Alliance. The conflict was particularly bloody and traumatic for Paraguay, whose adult male population was devastated.
In light of these constraints, it is perhaps not too surprising that Brazil's reaction to Lugo's ousting has been somewhat muted. Indeed, though Brazil has recalled its ambassador to Paraguay "for consultations", Rousseff has yet to decide whether her country will withdraw its diplomats permanently.
Meanwhile, though Mercosur has suspended Paraguay, the group has failed to impose more damaging economic sanctions against Asunción. Such posturing, which reflects Brazil's more cautious approach to foreign affairs, probably ensures that Lugo will never return to power and the right will become ever more entrenched in Paraguay.
Socially conservative 'Brasiguayos'
What is more, as much as Rousseff may express ideological affinity with Lugo, she is constrained by conservative political forces within her own country. Indeed, lawmakers from the opposition Brazilian Social Democracy Party or PSDB have criticised Mercosur's decision to suspend Paraguay from the trade bloc. Perhaps even more importantly, Rousseff faces opposition from Brazilian farmers who moved to Paraguay in the 1960s and 1970s, a group referred to somewhat pejoratively as "Brasiguayos".
Once they established themselves in their new home, the Brasiguayos began to buy cheap land and cultivate coffee and soybeans. Today, some Paraguayan border towns are culturally Brazilian and reportedly up to 80 per cent of local residents are of Brazilian descent. A socially conservative group some 350,000 strong, the Brasiguayos have spent years locked in violent land disputes with Paraguay's landless peasants.
Sensitive US diplomatic cables released by whistle-blowing outfit WikiLeaks underscore such conflicts. Landowners, in fact, told US officials that squatters acted with impunity under a "self-righteous, I am entitled" ideology. "Campesino groups," US diplomats noted, "have targeted large Brazilian landowners, who are widely believed to illegally own Paraguayan land, to refuse to hire Paraguayan farm workers, and to contaminate the environment with agro-toxins."
For Lugo, who had long championed land reform, the Brasiguayos represented a thorny dilemma. In an effort to calm the situation, the Paraguayan president sought to appease both squatters and landowners. The government would not act to expel Brasiguayos from Paraguay, Lugo announced, though foreigners would be banned from owning land for agricultural purposes. Hardly assuaging the Brasiguayos, Lugo then denounced soy growers’ use of harmful pesticides.
Not surprisingly, agribusiness interests grew increasingly incensed with Lugo, believing that the government had failed to offer strong state support to the Brasiguayos. Moreover, soy producers were sceptical of Lugo's economic plans and agriculture policies. "The government's intention to tax production," diplomats noted, "generates a strong reaction from soy producers, who feel they will be targets of an 'ideological' tax plan."
With the removal of Lugo, the Brasiguayos can now heave a huge sigh of relief. Nevertheless, the farmers are still nervous about ongoing rural instability and have reportedly proclaimed their support for incoming President Franco. In addition, they have petitioned Rousseff to recognise the new government in Asunción.
Competing political interests
Now that Brazil is emerging as a world power, the South American nation will have to decide what it stands for on the international stage. For the country's political elite, however, such questions are difficult to answer.
On the one hand, Rousseff comes out of the PT labour tradition and her party has received political support from the MST. Meanwhile, within Brazil's ministry of foreign affairs, some leftist stalwarts still hold sway and seek to craft a more anti-imperialist foreign policy.
On the other hand, Rousseff also answers to entrenched and powerful agribusiness, which has contributed to a ghastly social and environmental mess both in Brazil and now, Paraguay [for more on the soy planters and their pervasive political influence, see my latest book].
As a result of these competing interests, Brazilian foreign policy is constantly being torn between pragmatism and idealism. Furthermore, on a purely psychological level, Brazil seems to be a slightly ambivalent or reluctant world power. According to Americas Quarterly, Brazilian "leaders recoil at the thought of pooling sovereignty into supranational bodies". To be sure, the publication writes, Brazil has "modernised South American politics by promoting norms to protect democracy and to establish a regional zone of peace". However, the country's "efforts at promoting a regional sense of shared purposes have been mixed and, some say, halfhearted at best".
In another article, the Council on Foreign Relations also weighed in on Brazil's recent rise on the world stage. The country "appears to be seeking a fragile balance", the organisation notes, by "opposing undemocratic political forces in a multilateral setting, protecting its considerable economic interests, and asserting its diplomatic weight in South America".
In the long run, however, Brazil may suffer in the realm of public relations by "giving the unavoidable appearance that just behind the signature consensual approach to leadership lurks the bald assertion of hegemony, one that inevitably goes along with economic asymmetry".
Having amassed a large degree of economic power, Brazil must now figure out whether it has the stomach to also exercise political and diplomatic leverage over its neighbours. If so, what kind of pressure does Brazil actually want to exert within the regional milieu? Judging from the recent troubles in Paraguay, Brazil is still reluctant to confront deeply profound and philosophical questions about its place on the South American stage.
Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left.
Follow him on Twitter: @NikolasKozloff
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.