ASUNCION, Aug 30 (NNN-MERCOPRESS) — Paraguay’s Senate has requested a report from the Foreign Ministry as to the reasons for the country’s continued diplomatic recognition of Taiwan instead of mainland China. Paraguay is currently the only South American nation to formally recognize Taiwan.
This decision comes amid a growing debate over the country’s foreign policy. Proponents of shifting relations to mainland China, such as Senator Éver Villalba and Congressman Hugo Meza, argue that aligning with Beijing would bring significant economic benefits, including increased trade and investment.
Meza pointed out that China has invested over US$600 billion in Latin America and that even a small fraction of that could transform Paraguay’s economy.
However, the Paraguayan Industrial Union (UIP) has warned in a recent report against such a move, because it could lead to a net loss of hundreds of millions of dollars annually, given the existing markets in Taiwan, which in turn would result in a decline in tax revenue, and the interruption of cooperation programs.
The UIP also cautioned that key domestic industries and thousands of jobs could be at risk from competition with Chinese products. The report suggests that while there may be initial, short-term advantages, the long-term structural effects could be detrimental to the country’s economy.
What initially appears to be a vigorous boost can turn into future vulnerability, especially if the country is exposed to external factors, such as dependence on a single market or international price volatility, the UIP argued.
Nevertheless, the Senate approved this week a request for information from the Foreign Ministry to provide a comprehensive explanation of the political, economic, social, and cultural arguments that justify the country’s current position.
Villalba noted that China accounted for around 30% of national imports and is one of the world’s leading technological and commercial powers. “Our commitment must be to the welfare of the Paraguayan people, and not to the interests of groups seeking to protect their own benefits,” he said.
This decision reopens the debate on whether the country should maintain its historic relationship with Taiwan or explore a possible rapprochement with Beijing. Opponents to the shift brought up the example of Costa Rica, which proceeded as suggested, with unclear benefits in the long run. — NNN-MERCOPRESS
