South America's youngest democracy appeared under serious threat yesterday as Paraguay's army commander, Lino Oviedo, challenged the leadership of President Juan Carlos Wasmosy. Gen Oviedo, a populist with a strong following among the nation's poverty-stricken peasants, was barricaded with 4,000 men in a barracks on the edge of the capital, Asuncion.
He was refusing to accept his forced retirement, ostensibly for meddling in politics, and in turn demanding the President's resignation.
According to one report last night, Gen. Oviedo predicted President Wasmosy would appoint him Defence Minister today to end the impasse. But there was no confirmation from the president and any such move appeared certain to bring heavy criticism of Mr Wasmosy for "selling out" in the face of force.
Yesterday evening there was no sign of military activity by either side but tension was high. Gen Oviedo has not threatened a coup, but has called on Mr Wasmosy to step down in favour of the Senate speaker, Rafael Milciades Casabianca. The general, who helped lead the 1989 coup which ended the 34-year dictatorship of Alfred Stroessner, now in exile in Brazil, rejected approaches to the barracks by a string of envoys.
The crisis has aroused concern in South America because many nations in the hemisphere are going through similar socio-economic upheaval while generals loiter in the wings.
The showdown came after a year of speculation that the military might try to oust Mr Wasmosy, elected in 1993, to protect their power and financial base, notably a suspected hand in drug trafficking..
However, the conflict between Mr Wasmosy and Gen Oviedo may simply be personal.
The general was widely perceived to have helped Mr Wasmosy win the nomination as presidential candidate for the Colorado Party in 1993.
In turn, the new president promoted the general from commander of the First Army Corps to overall army commander. A 1993 statement by the general, saying the armed forces would "co-govern Paraguay for centuries and centuries", suggested to most Paraguayans that Mr Wasmosy would have to rule largely in the military's shadow.
Last month, after tens of thousands of peasants marched through Asuncion to protest against Mr Wasmosy's free-market economic policies, Gen Oviedo left no doubt he hoped to run for president as Colorado Party candidate in 1998.
It was after the general sought to postpone a party convention due next weekend that Mr Wasmosy ordered him on Monday to retire.
The general's supporters believe the President had an ulterior motive. Just last week, pro-Oviedo legislators blocked the government's attempts to award two lucrative toll-bridge contracts to companies in which Mr Wasmosy is believed to have major financial interests.