Tech and Tradition

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Cryptocurrency miners whose servers generate their digital product have flocked to Paraguay to take advantage of the landlocked South American country’s low taxes and cheap electricity.

But as power shortages continue to plague the capital of Asunción, many of these crypto miners also steal electricity, as the Economist wrote. Now, the government is launching a crackdown that includes 10-year jail sentences for such theft.

For example, Paraguayan authorities have seized 10,000 mining computers this year alone from these so-called “crypto cowboys,” noted the Week.

Companies have lined up to register for business in the crypto mecca rather than fleeing the country, claimed officials who operate the public power company, according to Bitcoin.com. At least one has decamped for Brazil, however, in search of friendlier climates.

These developments highlight how Paraguay is embracing future technologies while still grappling with its past, figuring out how to uphold the law and balance the power of the state with personal freedoms and civil liberties.

The brass feet sitting on a plinth in Asunción illustrate the point. The feet belong to a statue that commemorated Gen. Alfredo Stroessner, until citizens tore it down in 1989. The longest-ruling dictator in Latin America, Stroessner took power 70 years ago, killing hundreds and throwing thousands of others in jail.

As Al Jazeera explained, Stroessner was a classic strongman who deployed the military to aid his political allies in the country’s elite in their oppression of ordinary folks. His security forces would massacre people who dared claim they owned land, for example, over the objections of business leaders and others who would prefer otherwise.

The generalissimo’s legacy, like the brass feet, remains, however, in the form of his conservative Colorado political party, whose leaders continue to rule the country.

Paraguayan President Santiago Peña, for instance, is working hard to attract cryptocurrency miners, other tech companies, and foreign investment to decrease Paraguay’s dependence on agricultural exports. While on a recent trip to Argentina to boost economic development, however, his party expelled a crusading anti-corruption senator from the legislature – undermining the rule of law image Peña was trying to project.

“As Peña seeks to showcase the country’s potential on the global stage, its democratic institutions remain mired in local networks of patronage and corruption,” wrote World Politics Review.

A recent shootout between police and drug smugglers at the home of another Paraguayan lawmaker and Colorado party member also showed how connections between the country’s elite and criminals continue unabated.

Peña will need to tackle his country’s big problems, especially corruption, before he can attract more investment, say analysts. “This is entrenched through all political parties, at all levels,” said Christopher Newton, an investigator at research organization InSight Crime, in an interview with the Associated Press. “When it comes to people who have the power to make changes, a lot of those people are the ones who will likely benefit from not making changes.”