Paraguay's Benitez asks Taiwan for $1bln to ally with them over China

• 

In an interview with The Financial Times, Paraguayan president Mario Abdo Benitez underlined his government's adamance in working with Taiwan to ensure Asunción receives “the real benefits of the strategic alliance”, as he asked the island for an investment of $1 billion in attempt to brush off the pressure to transfer its diplomatic ties to China.

“There is Taiwanese investment of more than $6 billion in countries which don’t have diplomatic relations with Taiwan, we want from that $1 billion to be put in Paraguay,” he added. “That will help us to build the argument about the importance of this strategic alliance with Taiwan.” 

According to Dr. Mark Harrison, a senior lecturer in Chinese studies at the University of Tasmania, Taiwan was constantly threatened to lose allies, and comments such as those of Benitez would signal a debate about switching. He stated that "following the developments in the Pacific over the last several years, there is a greater awareness in the US and elsewhere that switching recognition from Taipei to Beijing can be the first step to other security and economic links with China, so no doubt there will be diplomatic work underway from a number of countries to understand Asunción’s position on continuing relations with Taiwan.”

With a GDP of about $39 billion, 30% of which comes from agriculture, Paraguay's Abdo Benítez revealed that a sustainable relationship with Taiwan over one with China had come to cost his country, telling The  Financial Times that export producers were feeling the heat due to the lack of access to the Chinese market, as was the impediment in the ability to acquire Covid-19 vaccines when they were primarily only available from China. 

The US has recently intended to enrich and bolster relations with the Pacific islands while counteracting China’s growing engagement in the region. While the islands sought to address their climate emergency in July, US Vice President Kamala Harris announced in an unprecedented move a fund of $600 million to the islands in order "to counter the Chinese influence in the region."

However, Abdo Benitez's statements were retreated by Paraguay’s foreign affairs minister, Julio César Arriola on Thursday at a press conference by Taiwan’s ministry of foreign affairs, according to the ministry spokeswoman, Joanne Ou.

Ou commented that Arriola stated, “what President Abdo emphasized in the exclusive interview is that Paraguay has excellent investment conditions and hopes that Taiwanese businessmen can enter the South American market by investing in Paraguay, which is of great significance to the establishment of a strategic partnership between Taiwan and Paraguay”. Ou further asserted that the Taiwanese government would maintain its advocacy for local businesses to invest in Paraguay.

To "clarify" the nature and connotation, Arriola spoke to Taiwan’s ambassador to Paraguay and argued that the bilateral ties between the two countries were “based on common values and ideas” and there was no "this for that" type of relationship.

Paraguay is one of the mere 14 countries holding formal diplomatic ties with Taiwan instead of China, with most nations concentrated in Latin America and the Pacific. Still, China recently has fortified ties with several, including the Solomon Islands, which signed a security deal with China in April, Panama, El Salvador, the Dominican Republic, and Nicaragua, that have come with vows of increased trade, loans, and investment.