Recent events have made it clear that a number of small Caribbean Basin nations are able to cast a far larger shadow than their relatively modest dimensions would ordinarily allow. What is their special draw? True, in any number of respects they already have become, or are well on the way to being, vibrant democracies. But at the same time, a number of them, many being developing democratic countries, have tainted their credentials by trading away their vote in regional and international forums for in-kind contributions as well as more direct forms of payment, allowing their leaders to make the choice as to which nations, such as China or Taiwan, would be recognized. Regarding the region’s fiduciary relationship with Japan, high levels of unemployment or a straitened economy have induced Caribbean Basin countries to seek geopolitical sweeteners from Japan in order to deliver up their votes to advance Japanese whaling interests.

A prime site to fish for votes as well as seek diplomatic recognition can be found among the Caribbean Basin countries. The Caribbean mini-states and their Central American brethren ineluctably can be found among those selling or trading away their sovereignty; China, Japan and Taiwan would be eager to purchase such succulents. Beijing is well advanced in pressing its economic and political presence in the Americas through major investments and diplomatic offensives. It has practiced natural resource diplomacy or its equivalent in other economic sections, dispatching senior officials of the People’s Libertarian Army and their top-level diplomatic counterparts to the region to extend their outreach. As of now, China is beginning to leverage its power toward some of the smaller Caribbean and Central American island nations, which are eager to engage in deepening their relationship with Beijing, for strictly financial and trade-related purposes. Such ties are being sought after, even if it means breaking off ties with Taiwan, a contracted relationship which more often than not was paid for by the winning suitor through extensive goods and services, or in some instances supposedly supplemented with private pay-offs to high regional officials.

For China, Taiwan, and Japan, this checkbook diplomacy was directed at enlarging their international constituency in order to help secure each country’s specific national goals. For example, most recently, two large issues have prompted the major Asian powers of Japan and China, as well as Taiwan, to ardently woo recognition or diplomatic support from relatively insignificant Caribbean and Central American nations. One of which has been the conflict over who would exercise future sovereign control over Taiwan. Another has been Japanese efforts to secure privileged whaling rights, which increasingly are being contested by members of the International Whaling Commission (IWC).

China and Taiwan: Which is the Real China and What is Costa Rica Up To?

On June 6, 2007, soon after his inauguration, President Oscar Arias severed Costa Rica’s ties with the island of Taiwan and established relations with China. This declaration served as a major setback to Taiwan’s quest to have its sovereignty recognized internationally, leaving the breakaway island with only 22 countries formally recognizing its existence, in contrast to the 170 nations maintaining diplomatic ties to China. After signing a deal with Costa Rica in early June, China opened an embassy in San José in late August – the first Chinese embassy in Central America in six decades. Arias was not embarrassed to acknowledge that the switch was economically motivated; Costa Rica expects to receive more financial assistance from China than it had from Taiwan, and also to benefit from newly established trade connections. Arias specified that China was offering Costa Rica a $50 million aid package, which in part would be used to fund the Institute for Municipal Development (IFAM). The Institute supports efforts by local governments to improve education, build roads, improve security, and provide various other public works. This new relationship is also likely to boost overall trade between the two countries. A trade fair was recently held in San José to encourage economic ties between the two nations, and Costa Rican Foreign Trade Minister Marco Vinicio Ruiz will attend a trade fair in China from September 8-11, where he will promote his country’s potential as a growing trade partner and investment prospect.

In the face of skepticism from some of his countrymen, President Arias justified his recent decision to switch the status of his nation’s recognition from Taiwan to China, saying that it would increase the “prosperity and development of Costa Rica.” He mentioned that currently China is Costa Rica’s second most important trading partner, making this new relationship extremely beneficial to the Central American nation’s economy. Arias also recently announced that he hopes to increase the amount of exports from $8.2 billion to $18 billion by 2010, but in order to do so Costa Rica needs to expand its product line. Chinese assistance is almost sure to be part of this success story.

What Lies Ahead for the Costa Rica-China Relationship?

Because China contains one-fifth of the world’s population and has a booming economy, relatively tiny nations like Costa Rica become an obvious target for the application of influence by a power-wielding, resource-seeking behemoth like Beijing. The Costa Rican president declared that “no one can dispute that having better commercial relations and investments with China is positive” and that “what Costa Rica really wants is more trade with China.” But this explanation may represent less than meets the eye. Recent history has shown that three Costa Rican presidents in a row were personally bribed by one EU telecommunications firm or another in order to be awarded a cell phone coverage contract in the country. For his part, Arias hopes to achieve a free-trade agreement with the Chinese government in the near future in order to advance his country’s economic goals. Arias also has in mind a quest to obtain the next available Latin American-allocated non-permanent seat on the UN Security Council, and hopes that China and its diplomatic circle will support his campaign. This would somehow vindicate the embarrassing situation in 2004 when the then president of Costa Rica Miguel Ángel Rodríguez, who had just been elected to the position of the Secretary-General of the OAS, was forced to resign after corruption charges were leveled against him in Costa Rica.

A Long and Rocky Road for Taiwan and China

The indomitable ‘22’ currently maintaining formal ties to Taiwan mainly consist of small and needy entities with modest economies. These include a number of Central American and Caribbean countries such as the Dominican Republic, Nicaragua, Honduras, Panama, El Salvador, Belize, Guatemala and until recently, Costa Rica. Some evidence suggests that the tug of war between China and Taiwan for formal ties with potential diplomatic partners has led both countries to resort to near – or outright – bribery and venality as tools to seduce these weaker nations and leaders.

The struggle for recognition was born out of the tumultuous protracted battle over what would be the nature of Taiwanese sovereignty, which began in 1949 after the Republic of China (ROC), headed by Chiang Kai Sheik, lost the civil war being waged on the mainland to the Communist People’s Republic of China (PRC), led by Mao Zedong. Upon their flight from the mainland that year, the Nationalists set up a government-in-exile on the Chinese island of Taiwan. Soon after, Beijing aggressively began articulating its “One-China Policy.” Today, the conflict still revolves around that policy, which states that there is only one China, which is Communist China, and that Taiwan automatically falls under Beijing’s sovereignty. Under this banner, the PRC refuses to establish relations with any nation that recognizes, or has extensive ties, with Taiwan, even though Taiwanese businesses have invested hundreds of millions of dollars in mainland China. Meanwhile, those countries that maintain relations with the ROC must sacrifice trade and diplomatic ties with Beijing.

The U.S. removed its embassy from Taipei and established relations with China in 1979. Ever since then, the U.S. has had informal relations with Taiwan but has implicitly, and at times explicitly, committed itself to protecting Taiwan from any form of Chinese invasion. But it is important to note that Washington does not recognize the island as a sovereign entity. In 2002, President Bush pledged that the U.S. would “help Taiwan defend itself if provoked,” and continues to sell, what it classifies as defensive weapons, to the island nation. Yet the U.S. does not allow Taiwan’s president, vice president, premier or ministers of defense and foreign affairs to enter the U.S. According to the explanation from the Chinese Embassy in Washington, the U.S. “only maintains commercial, cultural and other unofficial relations with Taiwan.” The State Department reinforced the Chinese Embassy’s statement by observing that the diplomatic guidelines of the U.S. are “intended to be consistent with the unofficial nature of [its] relations with Taiwan.”

Victory for Taiwan

Taiwan’s prospects have not been completely flattened in the region; at least up to now. For example, unwavering allegiance to Taipei has been displayed by both Panama and Belize. Salvadoran president Tony Saca has emphasized that he would only initiate relations with China if Beijing would drop its insistence on cutting El Salvador’s ties with Taipei. On the small Caribbean island nation of St. Lucia, Taiwan experienced a succulent diplomatic victory when, after Prime Minister John Compton returned to office, the small nation turned its back on relations with Beijing by restoring its previously severed ties with the ROC on May 1, 2007.

In a statement issued by Foreign Minister James Huang, Taiwan affirmed that St. Lucia would be accommodated with “a range of projects, from agriculture, education and business to medical assistance.” The Nationalist Party, the main opposition party in Taiwan, sharply criticized Taipei for allocating hefty amounts of bribe money to win over some mini-states, such as St. Lucia, to its cause, charging that “it demeans the nation’s democracy.” Despite some opposition on the island to this move, this small victory for checkbook diplomacy has well served Taiwan’s goal of trying to prevent itself from being locked out from international forums and global diplomacy because of its unrecognized status. Yet, St. Lucia represents only an isolated triumph for Taiwanese diplomacy, and given the enormous disparity in China’s giant economy, it seems that such diplomatic coups for Taipei will continue to be few and far between.

St. Lucia and the Caribbean: An Easy Touch for Japanese Commercial Interests

Even with Taiwan’s good fortune regarding St. Lucia and its existing ties to tertiary isolated spots elsewhere in Central America and the Caribbean (the Dominican Republic, Nicaragua, Belize and Panama also recognize Taiwan), Taipei is still working against the tide. The Chinese have racked up a much greater number of victories of their own in the same theaters of operations as has Taiwan, with Beijing emulating Taipei in unleashing the powers of the purse. Moreover, some of the same countries have become soft targets for the Japanese. In this instance, however, Tokyo’s underlying incentive is not only to expand its commercial fortunes in the region, but equally important, the right to engage in its traditional practice of commercial fishing (particularly whaling) on the high seas, even if it means utilizing controversial equipment, technology and tactics which much of the world has condemned.

China has used its financial clout and its market strength to obtain diplomatic accreditation from clientelist Latin American nations in order to freeze out and severely restrict the scope of Taiwan’s foreign connections. If Beijing wants to undermine Taiwan’s sovereign legitimacy on the world stage, Japan similarly has made it a priority to provide economic incentives to developing countries in the Caribbean and Central America that are willing to informally assign their votes to Tokyo on issues it deems of great importance. For Japan, this has been an uphill battle against a growing bloc of conservationist-minded nations, which include New Zealand, Great Britain and the U.S. – a trio that collectively established a moratorium in 1986 aimed at closing the door on Japanese commercial whaling.

Last June, the 77 members of the International Whaling Commission (IWC) convened for the body’s 59th annual meeting to discuss in greater depth the matter of Japanese whaling and to witness Tokyo’s latest incessant efforts to recruit developing nations in the Caribbean and Central America to predictably back its cause. In the past, the Japanese have procured pro-whaling votes from the Caribbean nations of Antigua, Barbados, St. Vincent and the Grenadines, St. Kitts, Grenada and Dominica (none of which are even remotely connected to the whaling harpooning industry). But at this year’s IWC convention there was a dramatic shift in the balance of power.

Costa Rica (perhaps feeling some guilt for its last minute and clearly self-serving switch in its diplomatic recognition from Taiwan to China), as well as Nicaragua, and Panama, among others, have confirmed their support for the Southern Hemispheric Whale Conservation Bloc being advanced by the Southern Cone ABC countries. The bloc, which includes a preponderance of the Caribbean, as well as Central and South American nations, and which has been spearheaded by Argentina, Brazil and Chile, is the result of an increased regional commitment in favor of whale watching, as part of the current surge in eco-tourism, rather than whale harpooning. The network has argued for its right to manage whale fisheries through non-lethal means, and to protect these regional resources from outside incursion, noticeably by the Japanese.

The growing consensus among environmentalists and the lay public is that Japan’s aggressive commercial efforts to purchase votes in international forums in order to legitimize its hunt for endangered species of whales, is both amoral and without justification, and this has led to increasing disaffection with Japan’s cynical efforts to buttress its right to kill whales. To protest the flagrant casuistry used by Japan to build up its case, Dominica’s Environment Minister, Atherton Martin, resigned from his post, saying “They made it quite clear that if they didn’t get Dominica to vote along with them they would have to reconsider their fisheries aid package to Dominica.”

In light of the increasingly unadorned debate with the Japanese, it is safe to say that a heightened interest in the economic benefits of marine sanctuaries is being witnessed – as evidenced by the proposed whale sanctuary - and that the pro-whaling alliance sought after by the Japanese, has been put on hold by Tokyo, at least for the time being. Whale watching enterprises alone bring in an estimated $11 million in annual revenue to the Caribbean, as well as in some of the coastal regions in much of the rest of Latin America. “These countries now see eco-tourism as their future,” says New Zealand’s Minister of Conservation, Chris Carter, giving voice to the region’s recent rise in optimism. For now, the most important observation to be drawn from this situation might concern the use of foreign aid more as a means of winning one’s goal than as a genuine act of charity – acts which systematically have had a long record of benefiting the narrow self-interests of developed nations like Japan.

The Reality of Asian Partnerships

The looming question that remains for small nations in the Caribbean and Central America is whether or not the benefits of these sometimes suspect joint projects with Asian nations are largely illusory. When issues of environmental responsibility are involved, their final decision invariably is in their own best interest. The reality is that, despite the obvious attraction of increased trade with such a powerhouse as China, smaller Latin American nations have good reason to wonder if they are merely being lured into a Faustian bargain. Relative to the Asian powers, Caribbean and Central American countries are still peripheral, if not marginal, trading partners, just as they were during the era of import-substitution industrialization. In the long run, Caribbean Basin countries may not do all too well even with Asian sparkplugs like China and Japan in their corner. While Asia may have thriving export-oriented model economies, Central America and the Caribbean do not. To further complicate the matter, the Caribbean Community (CARICOM) has recently made efforts to reaffirm its growing preference to affiliate with the U.S. market, rather than with the East Asians.

Nevertheless, President Arias considers Costa Rica to be a trend-setter for the region when it comes to relations with China. According to Latinnews Daily, the Chinese government has voiced the motive for its largesse to San José; “Costa Rica is the first step to win other Central American and Caribbean countries.” The theory involved here is that once one Latin American nation lowers the bar by entering into an invidious diplomatic relationship with Tokyo or making the draconic choice between diplomatic ties with China or Taiwan, the rest will follow. The reason for this is that a nation’s essential bona fides come into fundamental doubt because both the buyer and seller nation certainly realize that they are immured in a quid-pro-quo fix.

This analysis was prepared by COHA Research Associates Eliana Monteforte and Benjamin K. Smith