TAIWAN'S FOREIGN POLICY ALIENATING SOUTHEAST ASIA

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002477

SIPDIS

STATE PASS AIT/WASHINGTON

E.O. 12958: DECL: 05/31/2015
TAGS: PREL PGOV ASEC TW
SUBJECT: TAIWAN'S FOREIGN POLICY ALIENATING SOUTHEAST ASIA

Classified By: AIT Director Douglas H. Paal, Reason 1.4 (b/d)


1. (C) Summary: Taiwan's relationship with Southeast Asia has
deteriorated as Taipei's foreign policy has alienated some
governments and allowed Beijing to increase its leverage.
Taiwan's Ministry of Foreign Affairs (MOFA) is trying to
encourage closer economic and political ties to Southeast
Asia with its "Go South Policy," but is losing influence at
the hands of Beijing's proactive economic policies and
growing trade ties with Southeast Asia. Southeast Asian
diplomats in Taipei tell AIT that their governments are
growing wary of Taiwan because of the Chen Shui-bian
administration's practice of using foreign policy for
political gain. They note that President Chen's eagerness to
publicize Taipei's foreign policy successes and relationships
with Southeast Asia for the benefit of domestic audiences has
drawn the ire of Beijing. As a result, many governments in
Southeast Asia - including longtime supporter Singapore -
view their relationship with Taiwan as a liability and have
distanced themselves from Taipei in favor of the PRC.
Furthermore, Taiwan's inability to formulate a viable
strategy to deal with the region has allowed Beijing to
expand its influence almost unchallenged and resulted in lost
opportunities for Taiwan to advance its standing in Southeast
Asia. End summary.

Taiwan's "Go South" Policy
--------------


2. (C) The cornerstone of MOFA's foreign policy in Southeast
Asia is Taipei's "Go South Policy," which is designed to
promote closer economic ties to counter the region's
increasing economic tilt towards Beijing. MOFA's Section
Chief for Southeast Asian Affairs, Andrew Lee, told AIT that
MOFA believes the best way to improve relations with
Southeast Asia is to have good economic relations. Lee
asserted that MOFA's strategy is to gradually build
commercial ties and use economics as a catalyst for improved
relations and possibly a political relationship. Vietnam, he
explained, is MOFA's main focus in its "Go South Policy"
because Hanoi has shown some flexibility towards Taiwan.
Convinced of Vietnam's economic growth potential, Taiwan has
become one of Hanoi's top foreign investors.


3. (C) Lee told AIT that MOFA plans to continue the "Go
South" policy and broaden it to include other nations in
Southeast Asia, as well as Australia and New Zealand. He
said that MOFA's Southeast Asia strategy is flexible and
tailored to the circumstances of each country in the region.
Every two years MOFA will revaluate policies to determine
their effectiveness. For example, Lee told AIT that MOFA
needs to focus more resources on Malaysia because Kuala
Lumpur is reluctant to deal with Taipei. However, Lee
remarked that his superiors have not yet given him
authorization to engage Malaysia and that MOFA has no plans
to expend resources on Kuala Lumpur. Lee believes that
Taipei can offer Malaysia a lot, particularly in the IT and
high-tech arena. Lee, however, privately expressed
considerable frustration at Taipei's lack of focus on some
countries in the region and a failed strategy to counter
Beijing.

Little Success Countering Beijing
--------------


4. (C) Taipei has had little success with its "Go South"
policy in combating Beijing's growing economic influence and
political ties to Southeast Asia. Vietnam's Economic and
Cultural Office in Taipei Deputy Director, Le Hong Nguyen,
told AIT that Vietnam's relationship with the PRC is far more
important than Taiwan and that Hanoi is not willing to
jeopardize this relationship. While Le did not discount
Taiwan's investments in Vietnam, he said that Hanoi has
excellent relations with Beijing and nothing Taiwan does will
change that relationship. When asked about the future of
Vietnam's relations with Taiwan, Le admitted that it is hard
to predict since Hanoi believes Beijing is essential to
Vietnam's future development. Le's strong statements about
the importance of the PRC to Vietnam directly contradicted
the assertions of MOFA's Lee that Vietnam is the foundation
of Taipei's "Go South" policy and a success story for Taiwan.



5. (C) Thailand's Trade and Economic Office Deputy Director,
Benjamas Tanvetyanont, told AIT that Beijing has considerable
influence among Thai government officials and corporate
leaders, and that Bangkok's policies are not focused towards
Taipei. Tanvetyanont also said that Bangkok has agreed to a
FTA with Beijing and expects economic ties to continue to
grow. MOFA's Lee echoed Tanvetyanont, explaining that
Taipei's relations with Bangkok are not particularly close
because the Thai economy is relatively developed and has
little to gain from Taiwan's economy. Lee also noted that
Thai Prime Minister Thaksin Shinawatra has close personal
ties to the PRC through his vast business interests and that
Thai Foreign Minister Kantathi Suphamongkhon, with one eye on
the UN Secretary-General position, does not want to alienate
the PRC in hopes Beijing will support his bid.


6. (C) Malaysia has largely avoided ties with Taiwan and is
focused on Beijing. Unlike other Southeast Asian nations,
Kuala Lumpur does not operate a full time trade office in
Taipei. In response to AIT's request for a meeting, the
Malaysian trade office in Taipei replied that there would be
no personnel staffing the office for almost two months and
that office is only staffed part-time. Taiwan's relationship
with smaller less developed nations is also suffering at the
hands of Beijing. MOFA's Lee told AIT that trade with
Cambodia is declining because of a poor investment climate
and Phnom Penh's close relationship with the PRC.

Also Hurt By Chen's Foreign Policy
--------------


7. (C) Taipei's desire for better ties with Southeast Asia is
also being hindered by the Chen administration's practice of
publicizing Taipei's foreign policy for quick domestic
political gains. Thailand's Tanvetyanont told AIT that
Bangkok has had many problems with Taipei's efforts to
publicize the Taiwan-Thailand relationship. Tanvetyanont
explained that Thailand is very close to the PRC and Bangkok
cannot afford to anger Beijing. She added that Taipei is
always trying to get high-level visits to Thailand and added
that if Taiwan officials were allowed to visit, Taipei would
have a huge press conference the next day announcing the
visit, which would harm Bangkok-Beijing ties. The Chen
administration, Tanvetyanont lamented, cannot keep
relationships quiet, and Bangkok cannot trust Taipei because
Taiwan will promise silence, but then inflame the situation
with a press conference.


8. (C) The Chen administration's foreign policy strategy and
tactics have had the most serious consequences for Taipei's
relationship with Singapore, long Taiwan's strongest
supporter in the region. Both MOFA's Lee and Singapore's
Representative in Taipei, Ker Sin Tze, told AIT that
historically Singapore has been one of Taiwan's closest
allies. However, since President Chen came to power in 2000,
the relationship has soured as Singapore has distanced itself
from Taipei and looked to the PRC for improved political and
economic ties. Ker added that there is little sympathy for
Taiwan among both Singapore government officials and public,
and that Singapore's government has been burned too many
times by the Chen administration. He highlighted Chen's 2002
visit to Singapore that was supposed to be a discreet and
low-key. Instead, Chen publicly announced the visit and
trumpeted it as a diplomatic victory, causing a very bad
period for PRC-Singapore relations. Ker explained to AIT
that the DPP's independence platform and opposition to a
one-China framework is making the situation worse because
Singapore and the rest of the region want stable cross-Strait
ties.


9. (C) Singapore Prime Minister Lee Hsien-loong's visit to
Taiwan in July 2004 also damaged Singapore's relationship
with Taiwan and left Singapore disappointed with Taipei's
cross-Strait policies. According to Singaporean officials in
Taipei, Singapore went to considerable trouble to arrange the
visit while Lee was still Deputy Prime Minister and had high
hopes the visit would energize the Singapore-Taiwan
relationship. Instead, Lee found President Chen and the DPP
focused too much on tactics with the PRC and eager to leak
the details of their meetings to the press. Lee returned
home to Singapore unimpressed and under considerable pressure
from Beijing. Singaporean frustration over the visit and
Beijing pressure on Singapore in its aftermath laid the
ground work for a falling out between Taiwan and Singapore
over Taiwan Foreign Minister Mark Chen and Singapore Foreign
Minister George Yeo in September 2004.


10. (C) Dr. Eric Teo from the Singapore Institute of
International Affairs (SIIA) highlighted this fallout, over a
rude public insult directed at Singapore by Taiwan Foreign
Minister Mark Chen, as an important factor in the precipitous
reduction of the relationship. Chen's comments were in
response to Singapore Foreign Minister George Yeo's comments
during a UN speech that urged President Chen to pursue
moderate cross-Strait policies. Teo called Foreign Minister
Chen's response a disgrace and said the remarks permanently
damaged Taipei's relationship with Singapore. He also
characterized the episode as a good example of the reality of
Chen's foreign policy towards the Association of Southeast
Asian Nations (ASEAN). Even MOFA's Lee admitted to AIT that
Singapore has expressed desire for a more discreet, quiet
relationship with Taiwan and he privately acknowledged to AIT
that, in his mind, Singapore is being both smart and
practical. Singapore, he concluded, is shrewdly focused on
doing what is best for its national interests in the long
run. (Comment: Lee's clear intent was to imply that, by
contrast, Taiwan is not so shrewdly focused. End comment).

Taiwan's Lost Opportunities
--------------


11. (C) Southeast Asian diplomats and experts assess that
Taiwan's Southeast Asia foreign policy has largely served
Beijing's interests and resulted in lost opportunities for
Taiwan. Singapore's Senior Assistant Trade Representative,
Elenore Kang, told AIT that Taiwan's foreign policy towards
Southeast Asia has greatly benefited the PRC and allowed
Beijing to bring ASEAN into the PRC's sphere of influence.
Moreover, Kang said that Taipei's inept foreign policy in the
region has lost opportunities for Taiwan to combat Beijing's
growing prowess. For example, she highlighted Taiwan's
botched opportunity for an FTA with Singapore. According to
Kang, Singapore proposed the idea of an FTA with Taiwan in
2000, however, Taiwan officials never made a sincere effort
to reach a deal. She said once an FTA framework was reached
among ASEAN nations, of which Taiwan is not a member,
Taipei's opportunity for an FTA with Singapore and possibly
other ASEAN nations was lost.


12. (C) Dr. Teo from SIIA agreed with Kang, arguing that the
Chen administration's ASEAN strategy is nonexistent and has
only worsened Taipei's standing in the region. Both Teo and
Singapore's Ker characterized the ASEAN FTA as the
centerpiece of the region's future economic strategy. Teo
said that Taiwan has mishandled its dealings with ASEAN and
lost a golden opportunity to play a role in ASEAN and advance
its diplomatic position. Instead, Teo told AIT that the PRC
should give the Chen administration a "gold medal" for its
policies that have made ASEAN nations wary of Taiwan and
pushed them further into the PRC's orbit. Teo said that the
prospect for an FTA and improved relations with ASEAN is now
a "lost cause" for Taiwan. He asserted to AIT that the
majority of Taipei's MOFA officials are exasperated and
embarrassed by the Chen administration's tactics.

Comment: A Bleak Future
--------------


13. (C) The damage to Taipei's closest relationship in the
region, Singapore, should be a wake-up call for the Chen
administration. ASEAN nations view the Chen administration
as a liability and are wary of close relations with Taiwan in
order to maintain good relations with Beijing. President
Chen and the DPP's tactics of using foreign policy for
domestic political gain have alienated most Southeast Asian
governments and left them little choice except to look to
Beijing at Taiwan's expense. Southeast Asia is another
example that Taiwan lacks an effective foreign policy
strategy to counter the PRC's efforts to isolate it. As long
as Taipei continues its public, vocal, and domestic
politics-driven foreign policy toward the nations of
Southeast Asia, its standing in the region will be
increasingly marginal and irrelevant.
PAAL