Nation Must Shun Dollar Diplomacy

Wednesday January 18, by Jerome F. Keating Ph.D.

The cessation of diplomatic ties between Taiwan and the nation of Sao Tome and Principe has captured the news and once again brought out a myriad of traditional responses from pundits. Paramount among such responses are those of the hand-wringers and doomsday crowd.

There we find tirades that range from blaming the telephone call between President Tsai Ing-wen and US president-elect Donald Trump and accuse China of stealthily taking revenge for Tsai not agreeing to the fake "1992 Consensus," to those who cry this is the "beginning of the end" and even bemoaning and plaintiff cries that "this would have never happened under the administration of former President Ma Ying-jeou and so on.

However, what did happen? A small nation asked for a large amount of money in lieu of "recognition" and was refused, so it changed sides.

There is no question that money politics and dollar diplomacy are a common occurrence, so instead, a different question needs to be asked. Is the reality of statehood something that can be bought or sold, or does it lie elsewhere?

In the Sao Tome and Principe transaction, what loss was there for the mid-sized nation of Taiwan? To get a better handle on this, examine the crass side of dollar diplomacy and the role that it unfortunately too often plays at the UN.

Sao Tome and Principe is a small nation; it consists primarily of two main islands off the west coast of Africa. The islands were uninhabited when discovered by the Portuguese in the 1470s when they went down the coast of Africa seeking an eastern route to the Spice Islands in Indonesia.

Sao Tome and Principe's location made it an excellent stopping off point for that route. The islands' value increased as they also proved to be a good place to grow sugar cane and coffee and as a way station in the slave trade. Those are realities of the past along with the fact that the islands' main language remains Portuguese.

Today, Sao Tome and Principe gained its independence in 1975 and entered the UN in the same year.

It has a population of roughly 200,000 people, so asking for additional aid to the tune of US$ 200 million dollars was vastly disproportionate. The move shone a clear light on the shadows of dollar diplomacy.

The Tsai government of Taiwan made the right choice in refusing this "donation."

What is that? How can such blasphemous talk be raised? Does Taiwan not need every ally it can find in these troubled times? Is not the credibility and reality of Taiwan dependent on such recognition factors? In truth, it is not.

Examine the realities involved in this "blasphemy," for here the burden falls more on the inadequacies of the UN than on Taiwan.

Taiwan has a population larger than 75 per cent of the nations in the UN and a GDP in the top 15 per cent of nations. That is the first reality of which its citizens must regularly remind themselves.

What then about recognition by other nations? In this, examine the basic principles of the Montevideo Convention on what defines a nation and there one sees that a nation can be a sovereign state regardless of how much recognition it has by other states.

As befits the standards of the Montevideo Convention, Taiwan has a permanent population; it has defined territory and a democratically elected government. That government has both the capacity to and continues to enter into relations with other states. Thus while Taiwan still has 21 allies that officially recognize it, the reality lies more in the actions of other nations toward Taiwan than on the words they use to disguise those actions.

Certainly, by the Montevideo Convention and the declarative theory that follows from it, a nation can be a nation sui generis, independent of the recognition by other states. This does not deny another theory, the constitutive theory that focuses more on how much "official recognition" a nation gets from others.

In these theories, Taiwan resembles the flip side of Palestine. Taiwan has obvious de facto sovereignty if not technical de jure sovereignty in the eyes of many not including the 21 states that officially recognize it, while Palestine has de jure sovereignty in that it has recognition by 136 nations but not de facto sovereignty because among other things its capital is stated to be in Jerusalem, which is in Israel.

What Sao Tome and Principe's non-recognition has done is to expose one of the weaknesses of the UN, particularly if a nation can in effect state: "We will recognize you if you make millionaires of all of our citizens."

It is this factor that Taiwan must examine. Surprisingly people can respond to it by saying" "Who needs that?"

All nations spend money abroad for recognition and other factors that support their beliefs. For Taiwan, the days of dollar diplomacy need to be constantly reevaluated and a new strategy more in line with the realities of the world is in order. Taiwan needs to take a long, hard look at how it wants to spend its tax dollars on the various states that recognize it. In this, the reality remains, i.e., that Taiwan is a mid-sized nation with a GDP in the top 15 per cent.

What then is most important to Taiwanese in addition to recognition of their nationhood? What do Taiwanese have that the citizens of many nations do not? They have a hard-won democracy, and this adds considerably to the quality of their life. This is something that cannot be bought. On the other hand, citizens in many "recognized nations" suffer from not having what Taiwan has won.

While Taiwanese enjoy and protect their democracy, they need only look to the actions of other nations. Those actions speak louder than their words regarding Taiwan's constitutive recognition for in reality those nations do enter into and carry out transactions with the government. In this, numerous nations have created trade offices here to handle transactions with Taiwan and among these are trade agreements, the settling of fisheries disputes and so on.

The US specifically created the American Institute in Taiwan (AIT) after it moved its embassy to Beijing. The US has the Taiwan Relations Act by which it agrees among other matters to sell weapons to Taiwan. It has not done this with any other "non-recognized" nation. To add to this list, US President Barack Obama signed into law the US National Defense Authorization Act for Fiscal Year 2017, which includes a section on senior military exchanges with Taiwan. Are these not state-to-state interactions between Taiwan and other nations?

If Taiwanese examine how wisely their tax dollars are being spent, they might consider the following as a referendum. Instead of giving US$200 million dollars to Sao Tome and Principe for its recognition, why not spend it on Taiwanese? Now that would be a nice economic stimulus plan and one that would ease the loss of recognition by Sao Tome and Principe, wouldn't it?

The pundits may trot out their dire warnings. However, at the end of the day, in their hearts, Taiwanese are beginning to see that there is foolishness in handing out money to gain a few points in a zero-sum game with Beijing over international recognition.

Their democracy and way of life are things that they don't want to sacrifice.