A serious financial and political crisis has broken out in Paraguay, our friendly country in South America! Paraguay's lower house unanimously voted to impeach President Santiago Pena by an overwhelming vote of 78 to 0 on the 5th. Just minutes before the vote, Benia, who was involved in the collapse scandal of Ueno Bank, a large digital bank, released a resignation video on social platforms under the pressure of nationwide riots and defections from the ruling party.
The Associated Press reported that the impeachment symbolized the long-ruling Colorado Party's complete break with Benia. After three days of fierce protests by tens of thousands of people in the capital, Asuncion, ruling party lawmakers and the opposition joined forces to support impeachment. Congress is expected to formally accept Benia's resignation at 5 pm local time on the 5th, and Vice President Pedro Alliana will be sworn in one hour later to complete the remaining term until August 2028.
As a close ally of U.S. President Trump in Central and South America, Benia's sad resignation sent a shock bomb to the political situation in the region. In his resignation statement, he said that he abdicated "for the sake of the stability of our country, social peace, and the need to maintain democratic institutions" and apologized to the people, but did not take direct responsibility for the banking crisis.
Ueno Bank, the centerpiece of the political storm, has expanded rapidly in less than five years to include accounts owned by more than 60% of Paraguay's adult population. However, the Central Bank of Paraguay officially took over the bank on the 3rd, resulting in the complete shutdown of its mobile application (APP) and physical branches. Millions of people's savings, government pensions, and the salaries of 7,000 employees were instantly frozen.
The investigation revealed that Ueno Bank was suspected of making high-risk illegal loans to insiders and high-level affiliated companies. As of last month, the bank held about $800 million in public deposits, accounting for about a quarter of its total assets. Because Benía still held a stake in the bank's holding company until last year, many Paraguayans questioned how the bank, which has close ties to the president, was allowed to expand rapidly despite repeated warnings from the central bank about suspicious lending practices. Benía even appointed the bank's former president as central bank president.
Hundreds of Ueno Bank employees facing unemployment and unpaid wages protested outside the Ministry of Labor on the 5th. The day before, thousands of retirees, depositors and university students poured into the streets of Asunción, denouncing Benia as the "enemy of depositors" and chanting "Give us back the money." Riot police once fired pepper spray and rubber bullets to disperse the crowd.
Protesters viewed the bank collapse as the epitome of official corruption. At present, the authorities have arrested eight senior executives including Ueno Bank founder Miguel Vazquez and president Juan Manuel Gustale, and filed charges of breach of trust and attempted fraud against 27 bank officials and business partners. The Paraguayan government is making urgent arrangements to transfer the accounts of 280,000 victimized depositors to other banks in an attempt to quell the panic that has shaken the country.
Paraguay is currently Taiwan's only official diplomatic partner in South America. Benía has publicly stated on many occasions that he stands on the same side as Taiwan, emphasizing that both sides share the values of democracy, rule of law and human rights. In May this year, he led a delegation to Taiwan for a state visit.
