Paraguay hit by further clashes

Tuesday, 16 July, 2002, 22:06 GMT 23:06 UK

By Tom Gibb
BBC South America correspondent

There has been further unrest in Paraguay, with the police firing rubber bullets and teargas at protesters.

However, the trouble has been on a much smaller scale than on Monday, when two people were killed and more than a dozen were injured.

There is a heavy police presence as the authorities enforce a state of emergency.

Police wearing helmets and flak jackets have been deployed in force in cities where there were violent confrontations on Monday.

There have been some clashes, but the capital Asuncion has been mostly quiet, with many staying at home rather than going to work.

Economic stagnation

The state of emergency declared on Monday bans demonstrations and gives the police widespread powers to search and arrest.

The government has accused a former general and coup-plotter, Lino Oviedo, of orchestrating the unrest.

He is in exile in Brazil, and Brazilian government officials say they want an explanation from him.

Footage shown on Brazilian television shows the former general haranguing a crowd against the Paraguayan Government at a rally last month just inside Brazil.

But while the protests do seem to have been well-orchestrated, there is little doubt that Paraguay's President, Luis Gonzalez Macchi, is also increasingly unpopular.

The economy has either been stagnant or shrinking for the last seven years.

Many people have been taking their money out of the banks, worried they will collapse.

A large number of Paraguayans make their living through a massive black market, smuggling counterfeit goods from brand-name clothes to cigarettes and video recorders to other South American countries.

This makes Paraguay particularly vulnerable to the economic woes of its much larger neighbours, Brazil and Argentina.

Luchas en Paraguay | IMF/ WB Struggles | PGA