Last 20th August, the President of El Salvador, Salvador Sánchez Cerén, announced that his government was breaking off diplomatic relations with the Republic of China (herein forth Taiwan or the ROC) to establish them with the People’s Republic of China (China or PRC). This is the latest in a series of diplomatic defeats for the ROC, a country struggling to maintain sovereign state recognition among a few developing small states, against the will of the Chinese government who insists that Taiwan is a renegade province, and countries cannot maintain diplomatic relations with both at the same time. This is also known as the One-China policy. The Salvadoran switch takes place at the time that the PRC gradually seeks to establish itself as a hegemonic power on the international stage, while the current United States government holds a commercial war with the Chinese. Central America is quite in the middle of this game of great powers (and in the Caribbean, in 2017, the Dominican Republic also chose China over Taiwan).
In this post, I focus my analysis on the six presidential polities located in the Central American isthmus (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama), particularly, El Salvador. Besides this country two other states have established diplomatic relations with the PRC: Costa Rica, in 2007, and Panama, in 2017. It has also been speculated that the Honduran government might, in the short term, do the same. In this post I discuss how foreign policy decisions are a presidential power, which is affected by domestic politics and, particularly for small countries in strategic locations, the influence of great international powers.
A convenient way to characterize this situation is as a two-level game model, where domestic politics interact with international politics. I seek to answer, why Central American countries are cutting diplomatic ties with the ROC? Why they had them in the first place? Will more countries in this region do the same? And, does the current US-China trade war have anything to do with all this?
Foreign policy presidential powers in Central America, and the Beijing or Taipei dilemma
The countries of the Central American isthmus, except for Belize, have in common that all of them have a presidential form of government. This is, presidents and members of the legislature are elected for fixed terms, and cabinet members in the executive are not accountable to the legislature. Foreign policy is often characterized as a presidential power, not only in this region of the world but elsewhere, where polities have adopted presidentialism or some sort of semi-presidentialism. Very much like in the United States, in Central American countries foreign policy is a presidential prerogative, subject to checks-and-balances whose limits often fall into grey areas of constitutional interpretation. Yet, it is at the discretion of the president to recognize the sovereignty of other states.
The way presidents handle the international relations of their nations are not free from controversy. After the PRC became one of the permanent members of the United Nations Security Council in the early 1970s, most Latin American states except for the Central American and the Caribbean ones broke diplomatic ties with the ROC to establish them with China. Colin R. Alexander (China and Taiwan in Central America: Engaging Foreign Publics in Diplomacy. London: Palgrave MacMillan, 2014), provides an explanation of why this subgroup of nations in the Americas maintained diplomatic recognition of Taiwan over China. This is partly explained by the close ties between the government in Washington D.C. and the government in Taipei (the capital of the ROC) that was forged during the Cold War. On the one hand, it is well known that the Taiwanese government grants substantial donations for international development to governments of the few states that still recognize it as a state.
On the other hand, much is speculated about some other donations being granted informally, without going through public controls. Less evident is that, according to Alexander, among diplomatic circles in Taiwan there is talk that the United States government also makes informal donations to the governments of the Caribbean and, possibly, some Central American ones as well—i.e. countries within their geographical area of influence—in order to persuade them to keep recognition of the Asian island: “it has long been suspected that the US government provides financial incentives, aid, and development assistance to its neighbors based on informal agreements that they will continue to recognize the ROC” (p. 30).
Therefore, for Central American governments there are strong historical, political and financial incentives to maintain diplomatic ties with the ROC. However, that scenario has been changing due to the PRC’s stronger role in international trade, but also because it is competing with Taiwan with a diplomacy of development aid to extend its own influence—a so-called dollar diplomacy—hence weakening the Taiwanese in Central America. In 1985, due to the ideological context of the time, the Sandinista government of President Daniel Ortega in Nicaragua gave China diplomatic recognition. Ortega’s policy towards China was abolished by the new Nicaraguan government in the early 1990s, while diplomatic relations with ROC were restored. Years later, when Ortega competed again in the 2006 elections, with clear chances of winning, he hinted to the possibility of reestablishing relations with Beijing. Nonetheless, he did not do it. It was another former president of the 1980s, Óscar Arias (1986-1990, 2006-2010), from Costa Rica, the first in Central America in breaking with Taipei over Beijing, in this new context of international relations.
Arias returned to office in 2006 and a year later, amid great secrecy, his government announced that it was diplomatically recognizing the PRC. While there was controversy at that time about this move, as one observer points out, Costa Rica—a more open economy to international markets, with a higher per capita income than its Central American neighbours—was exporting more to China than to Taiwan, and was less dependent on official development aid than its neighbours. Hence, strategically, it was probably more natural for this country to establish this diplomatic policy which came with additional benefits, such as official aid for infrastructure and investment agreements.
However, Chinese investment in other parts of Central America has increased considerably in recent years. On the one hand, this is the result of the growing investment of that country in different parts of Latin America. The investment of this Asian state is concentrated in the countries of the Southern Cone. Some analysts believe that this behaviour is partly explained by Beijing’s interest to consolidate itself as a global hegemon, although this is also due to its need for raw materials to sustain its economic growth, and the expectation to profit from some of its investments (Constantino Urcuyo, China y EE. UU. Geopolítica y estrategia en el siglo XXI, forthcoming). In Central America, the geostrategic interest of this region for the United States must be taken into account, and that this is one of the few strongholds Taiwan has left.
Political scientist Constantino Urcuyo (see last paragraph) argues that, although China has not invested in this region in the same proportion as it has in the Southern Cone, the Central American isthmus is of great economic importance for Beijing, as it connects through the Panama Canal the Pacific and the Atlantic oceans and is a transit area for Chinese trade to North America. He also adds that politically, until 2016, China and Taiwan were experiencing a truce in their diplomatic efforts regarding the One-China policy. However, since Tsai Ing-wen’s rise to the presidency of Taiwan, China has taken a more aggressive diplomatic stance seeking to weaken the former internationally.
Panama has become the largest destination for Chinese investments in Central America. This country is in fact part of the Silk Road strategy that the Chinese government promotes mainly in Asia and Africa. In Honduras, Chinese money builds a dam of strategic importance for development plans in that country. The Honduran government of Juan Orlando Hernández has also sought to attract more investment from that Asian country for other projects such as the establishment of a so-called Zone for Employment and Economic Development. Finally, it has been argued that one reason that could explain El Salvador’s decision to establish diplomatic relations with China was Taiwan’s refusal to build a seaport. The agreement with China includes investment in this regard.
¿Is Donald Trump’s presidency a revival of the Monroe Doctrine?
The Monroe Doctrine, named after the United States President James Monroe in 1823, saw the intervention of Europeans in the Americas as acts of aggression. Years later, it is accentuated under the presidency of Theodore Roosevelt who would justify the direct intervention of the United States in the politics of the Latin American states. It is well known the influence that the United States had in countries such as Cuba, Honduras, Nicaragua, and Puerto Rico during the first decades of the 20th century.
The United States has been observing with great suspicion the growth of the Chinese presence in the Americas. However, possibly under the Trump administration the verbal confrontations of the United States towards China have grown. Recall that even though he had not assumed, the newly elected president made an official call to the Taiwanese President, Tsai Ing-wen’s, in November 2016, breaking protocol in a confrontational attitude against China. Trump has also launched a trade war this year with countries of the European Union, Canada and Mexico. But, possibly it is with China the country with whom this type of confrontation has been more aggressive, due to the tit-for-tat tariff escalation both parts have embraced with. However, this factor may not be related to the diplomatic rupture of El Salvador with Taiwan.
The Obama administration declared the end of the Monroe Doctrine’s era (Urcuyo, forthcoming); however, under Trump’s government the Secretary of State, Rex Tillerson, on one occasion, in reference to the Chinese presence in the American continent, declared that the Monroe Doctrine was a success back in the day, asserting that “I think it’s as relevant today as it was the day it was written”.
The intervention of the United States in Central America is subtler in comparison to what it was even in more recent times, during the Cold War. Faced with the growing Chinese investment in the region, Trump’s government has threatened that will condition its economic support upon their maintenance of diplomatic ties with Taiwan. It did after the breakup of Panama with Taiwan in 2017, and it reiterated this a few days ago after El Salvador did the same last August. Mainly, for the countries of the Northern Triangle, the United States’ aid may be more important, due to their higher levels of poverty compared to their Central American neighbours.
An additional factor that affects the countries of the Northern Triangle in their relationship with the US is that they are expellers of migrants and their economies are very dependent on the remittances they send to their families. This factor has been changing since the Obama administration at the beginning of this decade, among other factors, due to their growing crime rates and political instability, which is why the US has tightened its border control and deportation policies.
The two-level game of the Salvadoran diplomatic switch
For the Salvadoran President, Salvador Sánchez Cerén, the decision to maintain relations with Taiwan or to establish them with China represents what Robert Putnam characterizes as a two-level game, where the government has to manage a simultaneous strategy to manage the conflict in national politics and international politics.
Sánchez Cerén has been elected president of a leftist party, the former guerrilla in the 1980s, Frente Farabundo Marti para la Liberación Nacional (FMLN). El Salvador is also in a serious fiscal crisis and since the arrival of Trump has sought to relax its position, albeit unsuccessfully, on the policy of mass deportations. Hence, international aid is a significant incentive. However, Trump has been quite derogatory with El Salvador. Recall that in January 2018 Trump called “shitholes” El Salvador, Haiti and other African nations. Obviously, this was very offensive for Salvadorans.
On the other hand, it is known that Taiwan manages its own lobby groups in the countries where it has a diplomatic presence. This explains the secrecy of the negotiation between El Salvador and China. However, once the government’s decision to recognize China and break with Taiwan was announced, the biggest opposition party, the right-wing Alianza Republicana Nacionalista (ARENA) declared that if they return to power after the 2019 elections, they will restore relations with Taiwan. This party has been associated with the Taiwanese lobby. However, it is difficult to know if they will keep this campaign promise, given the irregularity with which the US government is managing its diplomatic relations with El Salvador.
Can we expect more Central American countries breaking off with Taiwan?
Currently, Guatemala, Honduras, and Nicaragua are the Central American presidential countries that still maintain relations with Taipei. At least in the case of the Guatemalan and Honduran governments, there may be significant incentives for them to remain as allies of the ROC. In spite that it has been speculated that the Honduran government could be the next to recognize the PRC, as the Guatemalan government, Hondurans have proven to be closer to President Trump. For instance, last year Guatemala was the first country to follow the example of the United States and moved its embassy in Israel from Tel Aviv to Jerusalem. Both Guatemala and Honduras, in December 2017, were two of the eight countries to vote against a resolution of the United Nations General Assembly condemning that decision of the US government.
China will possibly continue with its policy of not intervening in the domestic politics of other countries, but it will probably keep investmenting in Central America. The United States, like Taiwan, could increase its aid to the countries that still recognize the ROC. Hence, a plausible scenario is that relations between those countries and the ROC continue.
Sovereign state recognition and, foreign policy in general, is a presidential power. However, for small countries, especially those within the influence zone of great world powers, it is a very relative power.
In this regard, the balance of forces between China and the United States has important repercussions on the domestic policies of the Central American countries. This phenomenon is more relevant due to the personality of the current US president, who has assumed a more aggressive foreign policy than his predecessors.
Trump has revived the Monroe Doctrine and it is possible that in the years to come, if re-elected in 2020, he could seek to increase the US presence in Central America to prevent the remaining nations that still hold diplomatic ties with Taipei to change them over Beijing. Nonetheless, given the pressing needs of Central American governments, unless the US and the ROC increase their aid to their Central American counterparts, the temptation to break off with Taiwan will continue.