Paraguay requests $1 billion in investment to remain Taiwan’s ally
As Paraguay faces increasing overtures from Beijing to switch its allegiance from Taiwan to China, the country’s president Mario Abdo Benítez made a blunt request for $1 billion in Taiwanese investment to remain allies, the FT’s Michael Stott and Kathrin Hille report. The request comes as Taiwan has been steadily losing allies across Latin America as former friends are tempted away with Chinese aid, trade and loans, giving Asunción more leverage in its relations with Taipei.
While Paraguay has been one of Taiwan’s most reliable allies, its economy is dependent on soybean and beef exports but it lacks access to Chinese markets because of its diplomatic stance. A study published in Foreign Policy Analysis estimated that Paraguay’s Taiwan stance had cost nearly 1% of GDP per year in lost aid and investment from 2005-14. The powerful agriculture lobby has been pushing the government to try and boost exports to its wealthy ally.
Taiwan has already sent two investment delegations to Paraguay. In response to the latest request, the Taiwanese foreign ministry defended its record of encouraging its businesses to operate in Paraguay.