A sandal-wearing former bishop's victory in Paraguay's presidential election shows democracy is maturing in Latin America, but after 61 years of one-party rule his foes may dictate the pace of change.

Fernando Lugo, a mild-mannered leftist who quit the cloth three years ago saying he felt powerless to help Paraguay's poor, ousted the ruling Colorado Party in Sunday's election with promises to tackle inequality and stamp out corruption.

"We ask you never to abandon us. We'll make democracy together!" the bearded, bespectacled 56-year-old former Roman Catholic bishop told cheering supporters as firecrackers resounded around Asuncion on Sunday night.

"Today we wish to renew our commitment to the Paraguayan people... to the poorest," he added. "We will give our best to ensure our people are respected and known from here on for their honesty, not for their corruption." Mr Lugo calls himself an independent and has steered clear of Latin America's more radical left-wing leaders, such as Venezuela's Hugo Chavez and Evo Morales in Bolivia.

But he is seen as a likely ally of moderate leftist presidents in the region, which has steadily turned away from the right-wing dictatorships, extremely corrupt governments and Marxist rebellions that were so prevalent in the late 20th century.

Mr Lugo will take office on August 15 and has vowed to carry out agrarian reform to ensure poor peasant farmers can till their own land in a country where a small, wealthy elite owns the vast majority of farmland and cattle ranches.

Nearly four in every 10 Paraguayans are poor.

"If you have a left candidate who is clearly identified with the poor... and if he can break the grip of the longest ruling party in the world, a right wing party, I think it shows how much South America has changed and how much democracy has taken hold," said Mark Weisbrot of the Centre for Economic and Policy Research, a US-based think tank.

"We don't know how much Mr Lugo is going to change the government, or how much he can," he added, noting the Colorado Party's powerful machine at every level of government.

"It will depend on what their response is. Are they going to play by the rules of democracy?"

The decision of Colorado Party candidate Blanca Ovelar, who was bidding to be Paraguay's first female President, to concede defeat as results showed Mr Lugo with about 41 per cent of the vote and a lead of 10 percentage points, was a good start.

Voter turnout was high, at around 65 per cent.

The Colorado Party has dominated Paraguayan politics since it took power in 1947, and it backed General Alfredo Stroessner's brutal 35-year dictatorship until helping to oust him in 1989.

Many ordinary Paraguayans had become sick with what they see as a corrupt establishment that has failed to safeguard the poorest in a country landlocked by wealthier neighbours Argentina and Brazil and economically dependent on its agricultural and hydroelectric power exports.

Mr Lugo campaigned heavily on trying to charge Brazil more money for the power it imports from the jointly owned Itaipu hydroelectric plant - following in the footsteps of Bolivia, which negotiated to charge its neighbours more for natural gas.

"Mr Lugo faces a tough task. There is a great deal to be done," said 35-year-old economist Horacio Santander, standing among tens of thousands of Lugo supporters in a square in central Asuncion after news of his victory broke.

"It is time to start over with an honest, less corrupt government."

Paraguay's ruling party candidate, Blanca Ovelar, conceded defeat in Sunday's presidential election and said former Roman Catholic bishop Fernando Lugo had won.

Facts about Paraguay

• Paraguay is a poor, landlocked country of 5.6 million people at the heart of South America. It lost a good chunk of its territory, and many of its men, during the 1864-1870 War of the Triple Alliance against Argentina, Brazil and Uruguay. The country is known for its corruption and the contraband of goods such as electronics, cigarettes and liquor.

• Paraguay's Colorado Party is the world's longest-ruling party still in power. The Colorados have governed for more than 60 years, backing the 35-year dictatorship of Gen. Alfredo Stroessner until his overthrow in 1989. Every President in office since the return of democracy has been investigated for corruption.

• The world's fourth-largest soybean exporter, Paraguay relies mainly on agriculture and hydroelectric power. The underground economy includes contraband in drugs and weapons. The US government has warned of money-laundering and terrorist financing in the tri-border area, where Paraguay, Argentina and Brazil meet near the majestic Iguazu waterfalls.

• Political violence has marred Paraguay's recent history, with military-led coup attempts in 1996 and 2000. Bloody street protests broke out in March 1999 after the assassination of the country's vice president.

• The indigenous language of Guarani is widely spoken in Paraguay, along with Spanish. The Spanish conquerors of the 16th century assimilated with the Guarani-speaking Indians and learned their language. Although only two per cent of the population is indigenous and most Paraguayans are mestizo, the two languages thrive side by side.

• Paraguay is a predominantly Roman Catholic country that is home to an insular community of Mennonites, who turned part of the arid Chaco region into a prosperous area for farming and dairy production. Japanese immigrants have also preserved their language and customs in some areas.

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