Hugo Chavez basks in Paraguay President Fernando Lugo's glory

Lugo told an ecstatic crowd of his goal to improve living conditions in the region, one of the poorest and most backward parts of one of the least developed countries in South America. Many San Pedro residents emigrate to seek better lives in places such as Argentina, Europe and the United States.

"The time of Paraguay has arrived," Lugo said, echoing the egalitarian themes that helped him topple a ruling party entrenched for six decades, including 35 years of military dictatorship. "From now on, all Paraguayans will be treated the same, without distinction."

Sharing the stage was a euphoric Venezuelan President Hugo Chavez, clearly viewing the newly installed Paraguayan chief of state as his newest ally in the Caracas versus Washington political battle that has split Latin America.

"For the first time, I feel wanted in Paraguay," the animated Chavez declared, after repeating his habitual refrain that the United States, which he calls el imperio yanqui (the Yankee empire), was to blame for the region's chronic underdevelopment.

The Bush administration has viewed Paraguay's new president as a leftist moderate in the style of Brazil's Luiz Inacio Lula da Silva and Chile's Michelle Bachelet, both strong U.S. allies. And, while warmly greeting Chavez and treating him like an old friend, Lugo has eschewed the U.S.-bashing and ideological tenor of Chavez's tirades.

"We want to look to the future," Lugo told those gathered in the plaza across from San Pedro the Apostle Cathedral, where he had presided as a bishop for 11 years before stepping down from the church post en route to his improbable ascent to the presidency. "We don't look to the past for the guilty ones."

Lugo has praised Chavez, but has repeatedly said Paraguay must find its own way. He has spoken in favor of a good relationship with the United States, while adding that the days of Washington dominating the region's politics are over. A generation ago the region was largely ruled by U.S.-backed military dictatorships.

"I don't think the United States has any choice but to accept these changes," Lugo told The Times in an interview before his election.