Having fled Lula, they were swindled in Paraguay

Convinced by Bolsonarist propaganda that Lula da Silva’s government was about to introduce draconian measures against savers both large and small – and portrayed by far-right communication gurus, particularly on social media, as a communist regime with proletarian expropriation in its blood – many Brazilians have fled to Paraguay in the final months of a fierce election campaign, which culminated in Lula’s victory last week. At least thirty thousand—and that is a conservative estimate. Within days, queues formed day and night at the border: small property owners, small business owners, pensioners, and young families all waited for their turn to complete immigration paperwork. These voluntary migrants fled Brazil, the world’s ninth-largest economy, for tiny Paraguay, a country with an uncertain economy whose only thriving industry is smuggling. Those who managed to settle there took their savings with them.

Many have opened an account with Ueno Bank, one of the country’s most popular digital banks. Having fled a socialist regime that no longer exists, they woke up to find their savings confiscated: they open the app, their long-awaited Paraguayan account is there, but the balance does not appear. On Tuesday, the Central Bank intervened at the bank due to its insufficient solvency ratio, and the accounts were frozen. Eight executives, including the founder, were arrested. With three million furious account holders and the risk that the crisis could engulf the entire financial system, President Santiago Peña’s continued tenure – given his close ties to the bank – had become untenable. On Thursday, he resigned, shortly before facing impeachment: he had appointed a former chairman of the Ueno finance company to head the Central Bank. The bank is accused of squandering savings and pension funds amounting to hundreds of millions of dollars, throwing almost half of Paraguay’s population into a state of panic. The crisis has also unsettled Bolsonaro supporters in Brazil.