Paraguay’s President retracts comment requesting investment from Taiwan

On Thursday, September 29, Paraguayan President Mario Abdo Benítez sought to defuse a potential diplomatic conflict after telling the Financial Times (FT) that Taiwan should invest US$1 billion in Paraguay if it wanted to remain an ally of the South American country.

During a press conference broadcast via the Internet, a day after the publication of the FT interview, Abdo Benítez denied having conditioned his support to the Asian country, reiterating that the nations will remain strategic allies during his administration.

He added that the countries have to show Paraguayans the benefits of that relationship because a future president might be less supportive of Taiwan.

“What we are doing with Taiwan, and they are helping me, is working on an agenda where our goal is to attract at least US$1 billion of Taiwanese investment,” he said.

Paraguay is one of the largest economies on a shrinking list of countries, including Guatemala and Honduras, that recognizes Taiwan and not mainland China.

The 65-year relationship between the two countries dates back to when anti-communist presidents Alfredo Stroessner and Chiang Kai-Shek ruled in Asuncion and Taipei.

The two dictators never met, although Stroessner made a state visit to Taiwan in 1975 accompanied by his secretary, Abdo Benitez’s father.

Taiwan has provided hundreds of millions of dollars in financial and humanitarian aid to its South American ally over the years.

Although bilateral trade reached a record US$196 million in 2021, it accounted for less than 1% of Paraguay’s total trade that year.

“There is Taiwanese investment of more than US$6 billion in countries that don’t have diplomatic relations with Taiwan; we want that US$1 billion be put into Paraguay,” the Financial Times quoted Abdo Benitez as saying in an interview.

“That will help us build the argument about the importance of this strategic alliance with Taiwan.”

Paraguayan soybean and beef exporters have benefited indirectly from Chinese demand for food thanks to high world prices for both products.

However, farmers and ranchers are increasingly concerned that Paraguay’s special relationship with Taiwan will not translate into business opportunities while being shut out of the vast Chinese market.

In early 2021, at the height of the pandemic, the Abdo Benítez government said it had been offered vaccines in exchange for recognizing Beijing.

The foreign minister at the time, Euclides Acevedo, publicly demanded that the United States and Taiwan give “proof of their love” for Paraguay.

With Abdo Benitez ending his five-year term in August, it will likely fall to his successor to decide whether the Paraguay-Taiwan relationship will celebrate its 70th anniversary.

The Communist Party of China regards Taiwan as its territory, to be taken by force if necessary, and usually shuns countries that recognize it as independent.

The government in Taipei rejects Beijing’s claim, insisting that Taiwan is already a de facto sovereign nation.

With information from Bloomberg