Paraguay’s capital city has been declared the cheapest in the world – again. Rob Crossan heads to Asuncion, home to decapitated dictators, copious amounts of cornbread and shelf after shelf of contraband football shirts

The president has been smashed into the tiniest of pieces. It is impossible to make out now just how corpulent he was, or to grasp the fear that his 35 years of martial law had on Paraguay during one of the longest dictatorial rules ever seen. You can just about make out half of his face – benign and content looking, the face of a man who has dined out one too many times at his country’s expense.

Alfredo Stroessner Matiauda has been dead for a year. His reign of terror, easily equal to Idi Amin’s or Jean-Bedel Bokassa’s, ended when he was ousted in a coup in 1989. Detractors are not thrown out of planes any more (said to have been a particular favourite tactic of the man who liked to be known as Don Alfredo), but political chicanery and epidemic corruption have kept this barely visited chunk of Latin America firmly off the tourist map. The statue of Stroessner sits, hacked into pieces and encased in concrete, in the centre of the city, but his successors have done little to show that they are deserving of a more positive legacy.

Although hardly encouraging for Paraguayans, their usually soporific capital is currently a world leader in one respect. Global human resources consultancy Mercer has placed the city as the cheapest capital to live in for the fifth year running. With over 100 places separating Asuncion from the world-leading wallet-shredder, Moscow, it is great news for tourists, but hardly a cause for celebration for locals – a situation confirmed by the current series of strikes and protests against the incumbent president Nicanor Duarte Frutos, leader of Partido Colorado, the ruling party for over 60 years.

Most mornings over the past few months have seen the narrow streets of Asuncion come to life with the sounds of fireworks and hooves. Trade unions here are big fans of using the traditional and widely used means of transport – the horse and cart – as a tool in their industrial action. Now mid-morning in Asuncion brings determined, yet mostly peaceful, parades that weave through the streets with horses decorated from head to hoof in the colours of the unions. Sector by sector, they are using up every day of the week to march down to Plaza de la Independencia, home of the dismembered Stroessner statue, to protest against the government.

‘They’re just hungry – that’s all. That’s the problem with this country. We just don’t think beyond our next sopa Paraguaya,’ says Raul Valdez as he munches on a slab of the traditional Paraguayan dish, made from cornmeal and pig fat, at the Lido Bar – a 1950s orange-tiled relic that attracts the academic and the lazy in equal measure to chew on the extremely stringy fat of Paraguay’s political and economic situation. At 40 cents for a sopa Paraguaya, it is one of the most expensive places to eat it in the country.

Raul is a 22-year-old graduate and one of the few young educated Paraguayans who intend to stay in the country rather than flee to the US or Spain. ‘Paraguay isn’t cheap for us, but it’s incredible for foreigners as the lack of tourism means that the prices don’t get inflated. Plus, we have such a reputation for contraband that even the real manufacturers have to keep their prices down otherwise they would never sell anything. I mean it – go to the Adidas store down on Palma Street, they’re having to slash the prices to keep up with the counterfeiters!’

The hub of Paraguay’s global reputation for smuggling and contraband is focused on Ciudad del Este, conveniently located on the border where Brazil, Argentina and Paraguay meet, which has a black market estimated at five times the value of the national economy. Much of the booty – anything from Scotch to laptops – makes it to Asuncion where you can find street hawkers selling mountains of fake Paraguayan football shirts for around $5 alongside rows of Guaraní-speaking Indians from the Chaco, the vast and barren north of the country, sitting cross legged on the pavement weaving baskets and cloths. With the average monthly wage in Asuncion standing at barely 1,500,000 Paraguay Guaranis ($300) a month, Raul and the rest of the patrons of the Lido Bar believe it won’t be long before the notoriously benign character of the average Paraguayan finally changes.

‘We are such a docile nation of people – so different to the Brazilians and the Argentineans,’ says Fausto, one of the few Paraguayans making a living from the trickle of tourists that pass through the city. ‘People here always vote for the Colorado Party as they promise so much in the months before the election and the opposition is so divided. It’s the most obvious political trick in the book and our country falls for it every time. We have this inferiority complex which goes back to the Triple Alliance War [1864-1870]. We see all these huge mansions getting built for the politicians and shopping malls opening and yet nothing real has changed at all. The trade union protests won’t change anything – we need something more fundamental.’

Asuncion, while a small, sleepy and charmingly shabby city today, has a collection of oddities that remind locals of the tyrannical arrogance and vanity of Paraguay’s collection of roguish former rulers that stretch back well before the callous regime of Don Alfredo. When president Francisco Lopez declared war on Brazil and Argentina (who were backed up by the Uruguayan army), he took the country into a bloody war that cost the lives of an estimated 80 per cent of Paraguay’s male population and which saw boys as young as 12 being enlisted. Despite total defeat, Lopez’s face adorns the 1,000 Guarani note today and he is entombed in the Plaza de los Heroes, which is modelled on Les Invalides in Paris and manned by gleaming guardsmen. The Palacio de Lopez – a wedding cake of a presidential palace – is nearby.

The cheapest capital city in the world Asuncion may be, but there is nothing frugal or restrained about the rumours that fly around the streets and cafés each and every day. Has the US military got a huge secret base in the middle of the Chaco desert in preparation for any future wars over Paraguay’s plentiful water supply? Are Hezbollah and al-Qaeda operating bases out of Ciudad del Este? Will General Lino Oviedo – who is currently serving a 10-year prison sentence – come back to stage another coup? The cheapest capital city in the world is at once curious and determinedly unhurried. With chunks of pig fat-saturated sopa Paraguaya remaining cheap, the energy required for change is going to be hard to find.

HOW TO GET THERE
TAM flies to Asuncion from Europe via Sao Paulo.
www.tam.com.br

ON THE GROUND
South American Experience specialises in tailor-made trips to South America. Intertours can provide English-speaking tour guides and tailor-made trips around Paraguay.
www.southamericanexperience.co.uk
www.intertoursparaguay.com

WHERE TO STAY
Chaco Hotel is located downtown, room prices start at $36 for a single.
www.hotelchaco.com.py

Hotel Granados Park is a five-star hotel also downtown, room prices start at $115 for a single.
www.granadospark.com.py