Taiwan denies 71-million-dollar pledge to new Paraguay government

May 25, 2008, 5:24 GMT

Taipei - Taiwan on Saturday denied promising Paraguay's incoming government a donation of 71 million US dollars, saying it is Paraguay's request and Taipei has not approved it yet.

'Paraguay's incoming government has expressed the wish (for the donation) to our embassy, but we have only made preliminary contacts with Paraguay's incoming government and have not discussed details of cooperation projects yet,' Foreign Ministry's acting spokeswoman Phoebe Yeh said.

'Paraguay is Taiwan's sole diplomatic ally in South America and we have had diplomatic ties for 51 years. Our cooperation projects with Paraguay are proceeding well and on schedule,' she told reporters.

'The cash amount of Taiwan's aid to Paraguay is decided by the content and schedule of the cooperation projects. It has been so and will always be so. Regarding future cooperation plans between Taiwan and Paraguay, they have not been decided yet and both sides will continue to hold consultation,' she added.

Yeh was responding to a Saturday report by Taiwan's Central News Agency, which quoted Paraguay's vice president-elect Federico Franco as saying Taiwan had pledged 71 million US dollars to the incoming government of Fernando Lugo to help landless peasants.

Franco said on Cardinal Radio Friday that he had met with members of Taiwan's embassy in Paraguay. The Taiwan diplomats told him that when Lugo is inaugurated on August 15, Taiwan would donate 71 million US dollars to Paraguay to buy land for landless farmers.

Lugo, a former leftist Catholic bishop, won the April presidential election and will be sworn in on August 15 for a five-year term.

Paraguay is one of 23 countries which recognize Taiwan, and is Taiwan's only ally in South America, but Taiwan is concerned the nation could pursue ties with China at its expense.

China, which sees Taiwan as its breakaway province, demands foreign countries sever ties with Taipei before they can launch ties with Beijing.

To cement ties, President Ma Ying-jeou, on his first overseas trip since his May 20 inauguration, will visit several Latin American and Caribbeans allies, including Paraguay and the Dominican Republic, according to Taiwan press reports.

Ma will travel via the United States to meet US officials and discuss boosting Taipei-Washington ties.

The US switched recognition from Taiwan to China in 1979, but remains Taiwan's top arms suppliers and is one of Taiwan's main trading partners.