Taiwan denied promising Paraguay's incoming government that it would donate 71 million dollars to the South American nation, a newspaper said Sunday, dpa reported.
"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.
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.