Until then, the governments of Mercosur and the United States restricted themselves to diplomacy, which took into account the distinct fractions and mafias of the ruling Colorado party, which had arrived at a final showdown. The rise of a radical and democratic popular movement modified the whole panorama. For the North Americans, the fundamental issues were to put limits on Oviedo's involvement in contraband and narcotraffic, and to implement a fiscalization of the Paraguayan economy. Brazil played a crucial role in resolving the crisis, and granted a golden exile to ex-president Cubas Grau. Brazil's involvement has little to do with democratic principles, and a lot to do with economic interests.
Brazil is the principal foreign investor in Paraguay.
Southern Brazil's industries get their electricity from the gigantic hydroelectric power station at Itaipu on the Paraguay side of the Parana river. During the crisis, the power station was guarded by Brazilian troops. Brazil is also preoccupied by the 400,000 Brazilians peasants living in Paraguay. There is also a lobby of Brazilian businessmen and landowners with regular and illegal business interests in Paraguay Paraguayan agriculture was largely integrated into the Brazilian economy even before Mercosur.