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Paraguayans began voting on Sunday in what could be the biggest electoral challenge to the ruling conservative Colorado Party in over a decade and with the country's long ties with Taiwan potentially at stake.

Polling stations opened at 7 a.m. (1100 GMT) in what is expected to be a close contest between Colorado Party presidential candidate Santiago Pena, a 44-year-old economist, and 60-year-old political veteran Efrain Alegre, who is leading a broad center-left coalition and who promises a foreign policy shake-up.

In addition to the single-round winner-take-all presidential race, voters are also electing members of Congress and governors in the country of fewer than 7 million people. The first results are expected from around 7 p.m. (2300 GMT).

At the Mariscal Francisco Solano López school in the capital Asuncion, Ramona Oddone was one of the first in line to cast her ballot: “Look at all the young people taking part - that shows people want change,” the 79-year-old retired schoolteacher told Reuters. “They need jobs and I need a better pension.”

Eugenio Senturion, 65, said his loyalty was firmly with the continuity candidate, Pena. “Once a Colorado always a Colorado,” he said, speaking outside his local polling station in the area of Jara, Asuncion, where dry weather conditions could favour a high turnout, analysts said. “You cannot betray someone of your own (party) color,” he said.

A 34-year-old mother of three, Maria Jose Rodas, was undecided. “I’m worried about crime. All the candidates are the same for me ... nothing will change,” she said as a busload of voters arrived at the inner-city polling station.

The Colorado Party has dominated politics in the landlocked South American country since the 1950s and has ruled for all but five of the last 75 years. But its popularity has been hit by a slowing economy and graft allegations.

Ahead of casting his own ballot in the capital, Pena reiterated that the party would recognize a defeat. "No one can question our democratic credentials, not me as a candidate or the party,” he told journalists on Sunday. “We are convinced that we are the best option ... we have full confidence in electoral justice.”

The build-up to the election has been dominated by the economy, corruption allegations and the candidates' views on Taiwan. Paraguay is one of only 13 nations to maintain formal diplomatic ties with the democratically governed island that China views as its territory.

Alegre has criticized those ties, which have made it hard to sell soy and beef to China, a major global buyer, and has said the country's farm-driven economy does not get enough in return from Taipei.

Pena has said he would maintain ties with Taiwan.

Alegre on Sunday warned of reports of voter obstruction in the north of the country and said he would not "give in" to attempts to prevent citizen participation.

"Up until now all reports are positive, the process is being carried out without any difficulties," he told local media.

In final campaign events, Alegre took aim at corruption allegations that have dogged Colorado Party leader Horacio Cartes, a former president who was placed under U.S. sanctions in January. Alegre called him the "Pablo Escobar of Paraguay," referring to the notorious Colombian drug trafficker who was killed in 1993.

Cartes denies the allegations.

Pena acknowledged party divisions in his closing campaign speech and promised to be "a symbol of party unity."

Fiorella Moreno, 23, who sells ice cream, felt that none of the candidates offered hope to her generation.

"I didn't want to vote, I feel everything is in decline," she said. "But not voting makes me part of the problem." (Reuters)