The Washington Diplomat / February 2011
By Larry Luxner
SAN JOSE, Costa Rica — Jackhammers and bulldozers shatter the afternoon quiet as 768 Chinese workers rush to put the finishing touches on Costa Rica’s new national sports stadium, rising smack in the middle of San Jose’s historic Parque La Sabana.
When completed in March, the enormous steel-and-concrete structure will cover an area the size of a city block. It’ll accommodate 35,000 spectators and provide housing for 350 athletes, making it one of the largest sports and entertainment venues in Central America.
The controversial $90 million stadium is a gift from the People’s Republic of China — a country that for most of its history wasn’t even recognized by Costa Rica.
That changed on June 1, 2007, the day former President Oscar Arias became the first Central American head of state to recognize Beijing and break diplomatic relations with Taiwan, with which Costa Rica had enjoyed 63 years of unbroken goodwill and cooperation.
At the time, Taiwan reacted with outrage.
“Friendship cannot be traded off with money. It’s a pity and a shame,” then-Vice President Annette Lu told The Diplomat during an August 2007 interview in Taiwan. “All we did for Costa Rica was out of genuine friendship. That’s why I openly condemn President Arias.”
[Interestingly, on Feb. 17, 2008, Costa Rica became the first country to recognize the independence of Kosovo. Taiwan followed with its own offer of recognition the very next day, though the Kosovars, hoping to lure Chinese investment, have yet to reciprocate the gesture.]
Last year, Costa Rica has signed a free-trade agreement with China — the only FTA of its kind in Central America — and more recently, President Laura Chinchilla has promised to make Costa Rican visas more accessible for Chinese investors and tourists.
Meanwhile, the Chinese company building the national sports stadium has been awarded the contract to build a new project, Torres del Lago, consisting of three high-rise towers of 14 stories each, to be located in San José. And Costa Rica Coffee Export SA has reached a lucrative agreement to distribute its gourmet coffee brand throughout China; the company plans to open three stores in Shanghai next year.
Looking back, Jaime Daremblum — Costa Rica’s former ambassador to the United States — said his country didn’t have to burn its bridges with Taiwan in order to trade with Beijing.
“This was done in a very ugly way. It was a real slap in the face of Taiwan, which had been providing Costa Rica for decades with very valuable aid and cooperation,” said the ex-diplomat, who now directs Latin American programs at the Washington-based Hudson Institute.
“I’m not denying the trade benefits of a relationship with China, but it was not necessary to break [diplomatic relations] with Taiwan in order to have that. Look at Panama; they have diplomatic relations with Taiwan and very active trade relations with China, and the Chinese have not made it a prerequisite to break with Taiwan.”
Costa Rica’s abandonment of the Republic of China left only 23 countries around the world that officially recognize Taipei rather than Beijing. The most important ones are in Central America and the Caribbean, along with Paraguay in South America and a smattering of minor African and Pacific nations.
Years of aggressive lobbying and so-called “dollar diplomacy” have failed to get more countries on that bandwagon — a list that once included Saudi Arabia, South Korea, South Africa and, most notably, the United States.
Yet Taiwan’s pariah status in the world doesn’t seem to bother its 23 million inhabitants as much as it used to.
For one thing, unlike Palestine, Kosovo, Abkhazia and other jurisdictions fighting for international legitimacy, Taiwan is not a struggling backwater beset by poverty or ethnic divisions. Rather, it’s a homogenous, wealthy society with annual per-capita income exceeding $16,000 and foreign reserves of around $384 billion.
More importantly, relations between China and Taiwan have improved tremendously in the last three years, to the point where neither side still throws money at Third World nations in return for diplomatic recognition and votes at the United Nations.
In fact, President Ma Ying-jeou didn’t even mention the issue of Taiwan’s diplomatic isolation in his 2011 New Year’s address to the nation. Rather, he singled out slashing carbon emissions, caring for Taiwan’s rapidly aging society, reducing income disparities between rich and poor and improving economic links with mainland China as Taiwan’s greatest long-term challenges.
“The two sides of the Taiwan Strait should not quarrel over political power, independence versus reunification or Taiwan’s breathing room on the international stage,” he said. “We should instead focus on encouraging and helping each other grow in terms of the core values of freedom, democracy, human rights and rule of law.”
It’s interesting to note that in the three and a half years since Arias stunned his Taiwanese friends by breaking relations with the island nation, not a single country has followed his lead — despite rumors that the Dominican Republic, Haiti and El Salvador might do just that.
Hugo Martínez, El Salvador’s foreign minister, told The Diplomat that despite his country’s new left-of-center orientation under President Mauricio Funes, there are no plans to switch allegiance from Taipei to Beijing.
“We cannot lose sight of China’s significance in the global commercial market. We inherited diplomatic relations with Taiwan [from the previous government] and some countries have diplomatic ties with one country, and commercial ties with the other,” said Martínez, who was interviewed in San Salvador. “Yes, we are looking for dialogue with China, but for the moment, we have decided to maintain the status quo until we have a much more complete idea of what relations with China would mean.”