On November 29, 2024, during a press conference held in Taiwan, Paraguayan Foreign Minister Ruben Dario Ramirez Lezcano stated that Paraguay would not sever its relations with Taiwan in favor of China, but it is open to diplomatic and commercial relations with China. He also emphasized that the United States (US) has not made any request regarding Paraguay maintaining its relations with Taiwan.[1]
Minister Lezcano’s press statement has been considered a continuation of the remarks made by Paraguay’s President Santiago Pena during his visit to Taiwan on July 14, 2023. President Pena stated that he is “fully committed” to Taiwan, but at the same time expressed his desire to trade with China, indicating that he aims to establish a balance between Taiwan and China.[2]
Paraguay-Taiwan relations began during the Cold War years, and Taiwan’s anti-communist stance won Paraguay’s support. In 1957, Paraguay’s official recognition of Taiwan opened a new chapter in the relations between the two countries, and this diplomatic step played a critical role in increasing Taiwan’s international recognition.
Paraguay has actively worked on international platforms for the recognition of Taiwan as an “independent country” and has continued this support despite Taiwan’s increasing diplomatic isolation. Paraguay’s loyalty has distinguished it among the few countries supporting Taiwan, and this long-standing bond has become a reflection of Paraguay’s ideological and strategic stance in foreign policy.
Taiwan has strengthened the economic dimension of the relationship between the two countries over the years by providing economic aid in areas such as agriculture, education, technology, and infrastructure to Paraguay. Especially the projects in the agricultural sector have made significant contributions to Paraguay’s rural development and increased its agricultural production capacity. This economic cooperation has also been supported by the political dimension of diplomatic relations.
Taiwan is strongly continuing its educational cooperation with Paraguay. As of 2023, it has been reported that the number of Paraguayan students going to Taiwan on scholarships for education has exceeded 600.[3] Additionally, the establishment of the Taiwan-Paraguay Polytechnic University in Paraguay on May 31, 2018, demonstrates the deepening educational cooperation between the two countries and Paraguay’s determination to continue this collaboration in the future.
Taiwan provides an average of 150 million US dollars in financial support to Paraguay in areas such as education, agriculture, and health every five-year period.[4] However, the amount of foreign direct investment (FDI) that Taiwan makes in Paraguay is only about 4 million US dollars per year.[5] This figure is quite low compared to the amounts of direct foreign investment China has made in Paraguay’s neighboring countries in South America.
China has been increasingly showing an economic presence in Latin America in recent years. With its projects under the “Belt and Road Initiative” and massive infrastructure investments, China is seen as an “attractive partner” for countries in the region. China’s economic power has not only created commercial but also diplomatic impacts on Latin American countries. Countries like El Salvador and Panama have severed their diplomatic ties with Taiwan and established relations with China, resulting in economic collaborations and development projects. This situation is considered part of China’s strategy to reduce international support for Taiwan.
It is believed that Paraguay’s diplomatic loyalty to Taiwan limits the growth of the Paraguayan economy. Paraguay, despite being one of the world’s largest producers of soy and beef exports, does not have direct trade relations with China, so these products reach the Chinese market through indirect routes. Establishing diplomatic ties with China could provide Paraguay with a significant market advantage and also increase its potential to attract direct foreign investment and infrastructure projects.
This strategic dilemma requires Paraguay to consider the broader implications of its foreign policy decisions. Maintaining relations with Taiwan provides a significant advantage in gaining the support of major powers like the USA; meanwhile, the political and economic benefits that could be obtained by establishing ties with China are also quite attractive. Establishing relations with China could open up a massive market for Paraguay’s agricultural products and provide resources for infrastructure projects. In this context, Paraguay’s future foreign policy requires a strategic reassessment aimed at striking a delicate balance between loyalty and opportunities.
Many countries in Latin America have severed their ties with Taiwan, taking advantage of the economic and diplomatic benefits offered by China. For example, countries like El Salvador and Honduras have established diplomatic ties with China, gaining large infrastructure projects and trade opportunities. Apart from El Salvador and Honduras, other Latin American countries such as Panama, Costa Rica, and the Dominican Republic have also chosen to sever their ties with Taiwan to take advantage of China’s economic power. This trend is believed to have created regional pressure on Paraguay due to its relations with Taiwan.
Paraguay is at the center of the global competition between the United States, China, and Taiwan. While the US provides indirect support to its allies to prevent Taiwan from being isolated on the international stage, China aims to sever Taiwan’s remaining diplomatic ties using its economic power. Paraguay’s loyalty to Taiwan in this competitive environment contributes to creating a positive image in its relations with the United States. However, it is also a fact that establishing ties with China could provide significant opportunities in terms of economic development and trade.
In this context, Paraguay’s goal of regional leadership and desire to pursue an independent foreign policy necessitates developing a balancing approach between Taiwan and China. The country’s strategic position could serve as a model for other countries in Latin America.
In conclusion, seeking ways to develop commercial and diplomatic relations with China without completely severing ties with Taiwan could be a strategic approach for Paraguay. Such a balancing strategy would preserve the benefits of existing relations with Taiwan while also providing the opportunity to take advantage of the economic opportunities offered by China. Paraguay’s successful management of this difficult equation will not only optimize its own national interests but will also serve as a model for other countries in Latin America.
[1] Lai, Johnson, and Huizhong Wu. “Paraguay, One of Taiwan’s Remaining 12 Allies, Says It Won’t Cut Ties in Favor of China.” AP News, 29 Nov 2024, https://apnews.com/article/taiwan-paraguay-china-relationship-6462a3936a5ba14094cdee51ad8ba92c, (Accessed Date: 12.01.2024).
[2] Blanchard, Ben. “Paraguay Would Love More Trade with China, Taiwan Better for Development.” Reuters, 15 July 2023, https://www.reuters.com/world/paraguay-would-love-more-trade-with-china-taiwan-better-development-2023-07-15/, (Accessed Date: 12.01.2024).
[3] Letter to the Editor: 32 Years of Taiwan-Paraguay Educational Cooperation.” Taiwan News, 7 Nov 2023, https://www.taiwannews.com.tw/news/5034533, (Accessed Date: 12.01.2024).
[4] Baronu, Uma. “An ‘Eternal Brother’—Strengthening the Taiwan-Paraguay Relationship.” Global Taiwan Institute, 10 July 2024, https://globaltaiwan.org/2024/07/an-eternal-brother-strengthening-the-taiwan-paraguay-relationship/, (Accessed Date: 12.01.2024).
[5] Ibid.
