PARAGUAY'S NEW PRESIDENT VOWS TO BOOST ECONOMY, BATTLE DRUGS

Bitterness is password as Cubas replaces Wasmosy

ASUNCION, Paraguay - Raul Cubas Grau took the presidential oath of office
Saturday, promising to rejuvenate Paraguay's foundering economy and attack
the "scourges of drug trafficking and piracy."

The ceremony, which took place in the red-carpeted congressional chamber,
marked this South American nation's first transition between elected
civilians since a 34-year dictatorship led by Gen. Alfredo Stroessner ended
in 1989.

After taking the red, white and blue sash and the gold cane that symbolize
Paraguay's presidency, Cubas, a 54-year-old engineer, said he would overhaul
the public-banking system and take steps to end corruption.

"We will begin a frontal assault against poverty, implement social programs,
fight drug trafficking and recover the international credibility of our
country," Cubas said in his inaugural address to Congress.

Cubas succeeded President Juan Carlos Wasmosy, who was barred by law from
seeking a second consecutive term. At one time, Cubas served as Wasmosy's
economics minister.

Bitterly divided

But enmity between the two has become so strong that Wasmosy did not even
place the presidential sash directly on Cubas' shoulders Saturday. Instead,
a congressional leader handed over the sash and gold cane.

Cubas and Wasmosy are divided bitterly over the fate of Lino Oviedo, a
charismatic former army chief who was jailed by a military tribunal for 10
years in April, accused of leading a coup attempt against Wasmosy in 1996.
Cubas has promised to free Oviedo, his political mentor.

Cubas and Wasmosy neither exchanged greetings nor mentioned each other in
their respective speeches at the inauguration.

"You can be sure that in five years you will bid farewell to an outgoing
president who had the courage to take decisions and did not protect
criminals," said Cubas, who accuses Wasmosy of using Central Bank funds to
bail out bankers while ordinary people lost their savings in a financial
crisis.

He added that he would leave behind "a country which is a little more
ordered and less plagued by inequality than the one I am receiving."

He later named 11 ministers to his cabinet, including businessman Gerardo
Doll as finance minister and former police Gen. Ruben Arias as interior
minister.

Cubas easily defeated Domingo Laino of the opposition Democratic Alliance on
May 10 in this nation of 5.7 million people. The Colorado Party has
dominated Paraguayan politics since 1947.

Economic policy to come

In his speech, Cubas also pledged to fight the piracy of intellectual
property, and said he would try to create more manufacturing jobs, which
this South American nation has lost by the tens of thousands this decade.
Cubas was to unveil his economic policies Monday.

Wasmosy said he was proud of his "place in history" as the first elected
civilian since Stroessner's fall.

"I am sorry I was not able to develop my government program to the fullest
and leave the country more prosperous. But even so, I am proud to have
guided this country in the hour of peril," he said Saturday.

Oviedo was elected Colorado Party presidential candidate last year, with
Cubas as his vice-presidential running mate. Cubas, a multimillionaire
engineer who owns construction firms and foundries, moved to the No. 1 spot
when Oviedo was jailed, and promised to free the former general after he won
the election.

"If he does that, he would be trampling on the law," Wasmosy said Friday. In
an open letter to the people published in local newspapers, Oviedo expressed
his happiness at the presidency of Cubas and called for Paraguayans to grant
him their support.

1998 San Francisco Examiner Page A 24

Checked-by: Rolf Ernst