By Daniela Desantis and Lucinda Elliott
ASUNCION (Reuters) – Paraguay is searching for more Taiwanese investment decision to diversify its farm-driven economic system focused on exporting raw components to China, incoming Finance Minister Carlos Fernandez Valdovinos mentioned in an interview.
Paraguay remains the only South American country with formal diplomatic relations with Taiwan, which China promises as its individual territory. As Paraguay prepares for the Aug. 15 inauguration of the up coming federal government, it has strengthened its 70-yr friendship with the democratic island, even as China ramps up diplomatic and army strain.
“We are incredibly fantastic at generating soybeans and meat, but we will have to diversify,” Fernandez advised Reuters on July 28 at his temporary workplace in Asuncion. “We request Taiwan to help us with that, via investments from its private sector.”
A Taiwan delegation which includes enterprise leaders will travel to Paraguay in August for the inauguration of conservative President-elect Santiago Pena, he extra.
CHINA “IS NOT Hassle-free” FOR PARAGUAY
Paraguayan farmers who assistance switching ties to China to boost the landlocked country’s agricultural exports “are not viewing the hazards” that Beijing offers, Fernandez stated.
China, as a purchaser of uncooked products from Paraguay with no included benefit, “is almost certainly handy for some sectors,” Fernandez mentioned. “But as a approach for the financial and social enhancement of Paraguay, it is not convenient for us to carry on betting entirely and exclusively on the key export sectors.”
Paraguay’s cattle ranchers experienced been pressuring officials to attain obtain to the worthwhile Chinese marketplace for their beef before the April 30 election, which Pena gained by a sizeable margin.
Big meatpackers say they can get superior selling prices somewhere else, as demand from customers for additional specialised cuts and processed meals grows.
“China has decreased rates for beef cuts and we see the rapid impact of that throughout the border in Brazil and Uruguay,” mentioned Jair Antonio de Lima, founder and president of Paraguayan meatpacking organization Concepción, in an interview.
Volume sales of Uruguayan beef in the initial half of this yr to China have fallen as a lot as 39.9% from the 12 months-ago period.
“Taiwan is nonetheless an important marketplace for us, charges there are far better than in China,” Lima explained.
Paraguay hopes this yr to conclude a lengthy certification system to export beef to the United States, which could also pave the way to other eye-catching marketplaces these as Japan and South Korea, Fernandez stated.
A different SOVEREIGN BOND
Paraguay is preparing to situation close to $1 billion in sovereign bonds in international marketplaces, perhaps as shortly as January, Fernandez mentioned.
Proceeds will be employed generally to finance the 2024 spending plan and settle debts inherited from the outgoing administration which issued $500 million in 10-calendar year sovereign bonds as not too long ago as June.
The bond giving is topic to congressional approval. Congress will debate irrespective of whether to return the personal debt ceiling to 1.5% of Gross Domestic Product. The once-a-year focus on experienced been lifted considering the fact that 2020 to ease the affect of the COVID-19 pandemic, Russia’s invasion of Ukraine and other aspects.
Paraguay’s fiscal deficit ballooned to 3% of GDP past yr. “By 2026 or if feasible quicker, we hope to access 1.5%,” said Fernandez.
(Reporting by Lucinda Elliott and Daniela Desantis Editing by Richard Chang)
