It’s a good thing that checkbook diplomacy is going to be shut down, because it seems to be reaching absurd proportions as Paraguay claims Taiwan has pledged $71 million in aid.

Taiwan denied promising Paraguay’s incoming government that it would donate 71 million dollars to the South American nation, a newspaper said Sunday. “We are unaware of this. We will try to find out if there was some misunderstanding,” the United Daily News quoted Foreign Ministry acting spokeswoman Phoebe Yeh as saying.

Yeh was responding to a Saturday report by Taiwan’s Central News Agency (CNA), which quoted Paraguay’s vice president-elect Federico Franco as saying Taiwan had pledged 71 million US dollars to the government of president-elect Fernando Lugo for a land deal to help landless citizens.

“There are many cooperation projects between Taiwan and Paraguay. But the news report refers to a new aid which has not been publicized. The new Paraguayan government has not been sworn in yet, so it is unlikely for us to discuss new aid with them,” she added.

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.

The article also reports that President Ma is headed overseas to visit the Americas, including a trip to the US to meet with US officials.

I’ve posted on the Paraguay issue before. The Paraguay experience offers many parallels to Taiwan’s. There the Colorado party dominated the landscape for 60 years with the same system of patronage networks and authoritarian control. A friend flipped me this description of Paraguay that sounds just like Taiwan:

This frustrating condition is the natural consequence of 61 years under the bad governance of the Colorado Party, but it shouldn’t be forgotten that in that long period -which included the 35 year long iron grip of General Schroedder- this political entity receive dthe support of the mayority of the Paraguayan people. Even in these last elections, Mr. Lugo won with 40% of the votes because his Colorado rivals were divided in two currents, which got only 30 and 21 per cent respectively.

Hence, the Paraguayans have not only been victims of the bad Colorado administrations, they have also been their accomplices, which should not scandalize us. It happens in all the countries where there client relationships prevail. In them, political power becomes a great source of riches, privileges, public jobs, and social prestige, or, on the other hand, the tough hand that punishes, deprives or cruelly harrasses its adversaries. That is why client governments (ask the Argentinians about peronism) have so many followers.

In other diplomatic news, Fred Chien, former diplomatic representative to the US and second generation old guard KMTer, says that the “National Unification Guidelines” need to be restored:

Adopted by the Executive Yuan in 1993, the guidelines declare there is but one China, where two different government entities exist, each not subordinate to the other, though both wish for eventual unification. Progress towards that unification should be made in three stages, according to the guidelines, which President Chen Shui-bian virtually terminated in 2005 despite his promise not to do so.

Chen had the guidelines “cease to function” and the National Unification Council “cease to function” at the same time to the chagrin of Beijing and Washington. He pledged not to abolish either in two inaugural addresses in 2000 and 2004.

Taiwan finds best protection against attacks from China in these guidelines, Chien said. Taiwan will build mutual trust with China in the second stage of Taipei’s master plan to accomplish peaceful Chinese unification. The island nation is now in that second stage, while China has continued its two-digit increase in military spending. Taiwan cannot afford an arms race with China.

China won’t attack Taiwan if independence isn’t declared in Taipei. Nor will it unless there is serious political upheaval. “So long as the guidelines are scrupulously observed,” Chien pointed out, “the people of Taiwan are in no danger of being attacked and their sustained development is assured.”

That is all the more necessary after China adopted an anti-secession law in 2005, codifying an invasion of Taiwan if there occur moves toward de jure independence.

“I hope and pray the guidelines will be made to apply again to bring peace and prosperity to Taiwan,” Chien said.

As a matter of fact, Chien stressed as far back as in 1992 Taiwan’s China policy should take precedence over its foreign relations. “I came under fire for stressing that point,” he recalled.

The guidelines for “national unification” were not adopted in any democratic fashion. They’d make an excellent fodder for a referendum.

As Ma moves in the Old Guard KMT are coming back in his wake to take over the Party. That’s bad news. However, KMT elites are acting in their usual high-handed style, and the legislature is feeling shut out since it isn’t being consulted. There’s been some serious grumbling, and a couple of angry press conferences.