The Tico Times / August 31, 2007
By Larry Luxner
TAIPEI, Republic of China — Ever since Costa Rican President Oscar Arias Sánchez outraged Taiwan in June by breaking relations with the island nation and establishing ties with communist China, frantic authorities here have been doing everything they can to prevent further defections.
So far, Taiwan's efforts appear to be paying off.
At an international conference in Tegucigalpa last Thursday, the leaders of Belize, Guatemala, El Salvador, Honduras, Nicaragua, Panama and the Dominican Republic pledged they'd back President Chen Shui-bian and his long-shot struggle to win UN membership for Taiwan.
The public show of support came as Chen vowed to invest $1 billion in infrastructure, environmental and energy projects throughout Central America.
Even so, Taiwanese authorities insist it's not all about cash.
Perhaps that's why throughout this prosperous nation of 23 million, the name Arias has almost become a dirty word — especially after he accused the Taiwanese of being cheap with development aid.
"Friendship cannot be traded off with money," Vice President Annette Lu told The Tico Times in an interview here last week.
"It's a pity and a shame, given how strong the relationship was between Taiwan and Costa over the past 63 years. All we did for Costa Rica was out of genuine friendship. That's why I openly condemn President Oscar Arias," she said. "He's a renowned Nobel Peace Prize laureate. If he chose China simply because Costa Rica needed to trade with the PRC, at least that's understandable. But he said Taiwan should have given Costa Rica more money. For this reason, I feel he really does not deserve the Nobel Prize."
Lu, interviewed at the 12th-floor conference room of Taipei's venerable Grand Hotel, said that in her subsequent discussions with Central American heads of state, she's heard only assurances of friendship.
"Many of them told me that if it's OK, maybe they would think of having relations with Beijing," she said. "But if they are forced to choose between Taiwan and China, their only choice would be Taiwan, because Taiwan stands for democracy."
In fact, top officials of the two countries believed most likely to follow Costa Rica's example and break relations with Taiwan — Nicaragua and Panama — say nothing could be further from the truth.
Nicaragua's vice-president, Jaime Morales Carazo, lashed out at Arias during a speech to delegates at last week's Democratic Pacific Union convention in Taipei. He alo insisted that President Daniel Ortega, despite his leftist sentiments, has no intention of ending Nicaragua's friendship with Taiwan, one of the world's most staunchly anti-communist countries.
"We want to express our regret for Costa Rica's abrupt decision to break off diplomatic ties with Taiwan. We cannot agree to this kind of action taken by Costa Rica, " he said, adding that "it's important to hold onto our principles and values, and cherish our friends. We should not be too business-minded, and we must not let outside political forces determine who are allies and foes are."
Morales went a step further, saying Nicaragua is fully behind Taiwan's controversial effort to win a UN seat for itself under the name "Taiwan." For 15 years, the island has struggled to win back its seat in the United Nations under the name "Republic of China" — but this year marks a change in strategy by President Chen, a fierce advocate of Taiwanese independence.
"For a country that can boast of excellent economic performance, and ranks No. 3 in the world in foreign reserves, Taiwan is also a role model for many countries," Morales said. "How can such a nation be barred from the United Nations?"
Taiwan can apparently also count on Panama, which says it'll stand by its longtime friend even though Panama stands to receive massive Chinese investment as part of a $5 billion expansion and modernization of the Panama Canal.
"Will we break relations with Taiwan? Of course not," said Agustín Escudé Saab, a member of Panama's National Assembly representing the ruling Partido Revolucionario Democratico. Saab was in Taipei as a delegate to the Democratic Pacific Union convention.
"Our relations with Taiwan have historically been excellent, and we have a very close cooperation with Taiwan in science, technology and health," he told The Tico Times, estimating that bilateral trade comes to between $80 million and $120 million a year. "We respect Costa Rica's freedom to break relations as a sovereign state; however, this decision was not approved by the Costa Rican people. International politics isn't determined by who gives you more money. We have relations with Taiwan because we love democracy."
Costa Rica's decision leaves only 24 governments around the world that recognize Taiwan as the sole legitimate representative of the Chinese nation. Together, these two dozen countries have a combined population of only 88 million.
The largest of them is Guatemala, with 14.2 million inhabitants, while six of them — Tuvalu, Nauru, Palau, St. Kitts & Nevis, Marshall Islands and the Vatican — are among the 10 least-populated countries in the world. Paraguay is Taiwan's only diplomatic friend in South America, and Haiti — a longtime ally of Taiwan — is said to be wavering in the face of pressure from Chinese officials.
"This is a fact of life for Taiwanese diplomats," said Joseph Wu, head of the Taiwan Economic and Cultural Representative Office in the United States, which also doesn't have full diplomatic relations with Taipei. "China is getting bigger, wealthier and more influential, and the Ministry of Foreign Affairs in Beijing is more willing than ever to spend a large amount of money to influence other countries' foreign policies."
Chun-Fang Hsu, deputy director-general of foreign trade at Taiwan's Ministry of Economic Affairs, said the nations of Central America are growing in importance as trade partners, though she conceded that Taiwan's leading source of both imports and exports is now mainland China.
"Our dependency on China is increasing, and that's why we're trying to urge our businessmen to diversify the market. That's why we're also encouraging our people to invest more in Southeast Asia," she said. "Last year, for example, Taiwan became the No. 1 foreign investor in Vietnam."
Chun noted that in 2004, Taiwan signed free-trade agreements with Panama, Guatemala and Nicaragua.
"With those countries, our relations are booming," she said. "Since the FTA with Panama went into effect Jan. 1, 2004, two-way trade has increased dramatically, by 112% in 2004, 96% in 2005 and 71% in 2006. The government wants to boost trade with other countries as well, so in two months, we will organize a trade and investment mission to Central America. We urge these countries to improve their investment climate, because Taiwanese businessmen have sharp eyes and know where they will invest.
She added: "Diplomatically we are isolated, but economically, we have many close friends."