Honduras is paying off loans it received from Taiwanese banks according to contract stipulations, the Ministry of Foreign Affairs said yesterday after a Honduran newspaper reported that the country owes Taiwan more than US$440 million.
Honduras has not repaid the debt 11 months after it severed diplomatic ties with Taipei, Honduran newspaper La Prensa reported on Wednesday, citing Honduran Ministry of Finance data.
Taiwan terminated diplomatic relations with Tegucigalpa after the Honduran Ministry of Foreign Affairs in March last year announced on social media that it would cut its ties with Taiwan.
Photo: AFP
This was another example of China using the lure of economic gain to poach Taiwan’s allies, Minister of Foreign Affairs Joseph Wu (吳釗燮) said at the time.
The Presidential Office has made clear that Taiwan would “not engage in a meaningless contest of dollar diplomacy with China.”
The Honduran government justified its decision on the grounds that it was “seeking greater economic support and loans,” the newspaper reported.
The administration of Honduran President Xiomara Castro has not sought loans from Taiwan and the most recent loan it was granted was US$300 million in 2019 when Juan Orlando Hernandez was Honduran president, it said.
The funds from Taiwan have been allocated for housing reconstruction, school infrastructure, school meals and other projects, it said.
In Taipei, Ministry of Foreign Affairs spokesman Jeff Liu (劉永健) yesterday said that the reported debts are commercial loan arrangements by Taiwanese banks to the Honduran government.
The contracts clearly state the rights and obligations of both parties, and include dispute settlement mechanisms and legal jurisdictions, Liu said.
The termination of diplomatic ties does not affect the contracts, so the Central American country still has to repay the loans, he said, adding that it has been doing so.
If there is a breach of contract, the banks can take legal action through international judicial channels, which is standard practice regarding commercial loans, he said.
Meanwhile, Quintin Soriano, the mayor of Choluteca — the capital of a major shrimp farming region of the same name — called on the Honduran government to solve challenges faced by the country’s shrimp industry after Taiwan reduced imports of such products after diplomatic ties were cut and China failed to provide subsidies it had promised, Honduran newspaper La Tribuna reported on Wednesday.
Tegucigalpa terminated commercial and diplomatic ties with Taiwan — a nation with a good market for shrimp — while farmers are reluctant to export to China because prices there are so low and Mexico closed its market to the product, Soriano said.
If the problem is not solved, about 40,000 people in Choluteca region would lose their jobs and “there would be a revolt,” he said.
Taiwan last year reduced shrimp imports from Honduras, but remained its biggest export destination, importing more than 24 million pounds (10,886 tonnes), down from 29 million pounds in 2022, National Association of Aquaculture Farmers of Honduras data showed.
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