CHAD LOSS PROMPTS ANXIETY WITHIN TAIWAN FOREIGN

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002846

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/15/2031
TAGS: PREL TW
SUBJECT: CHAD LOSS PROMPTS ANXIETY WITHIN TAIWAN FOREIGN
POLICY CIRCLES

REF: A. TAIPEI 02652


B. TAIPEI 02700

C. NDJAMENA 01054

Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d)


1. (C) Summary: Chad's decision last week to establish
formal diplomatic relations with Beijing has renewed anxiety
in Taipei over the long-term viability of its competition
with the PRC for official diplomatic partners. Local foreign
policy observers say Taiwan will nevertheless press ahead
with efforts to expand its formal "international space," but
opinions differ regarding how low the number of countries
that recognize Taiwan will or can go before causing serious
difficulties for President Chen and the Foreign Ministry.
Taiwan officials, who characterized the manner and timing of
the Chad break as going beyond the "normal bounds" of
competition, are concerned that Beijing's increasingly
aggressive behavior may draw away other partners over the
next year. End Summary.

The Numbers Game: How Low Will They Go?
--------------


2. (C) With the loss of Chad, Taiwan is now down to 24
formal diplomatic partners, from a high of 31 reached in 1996
and 29 in 2000, the start of President Chen's first term.
National Chengchi University Institute of International
Relations Professor Yen Chen-shen told AIT that Taipei
continues to compete for recognition because the number of
formal partners is not only symbolic of Taiwan's presence on
the international stage, but also is integral to the "myth"
of Taiwan statehood and nationalism. Yen doubted the number
would go below 20 in the next two years, but warned that if
it reached 22, last hit in 1988, then the Chen administration
would be under pressure to push more radical proposals that
highlight Taiwan's sovereignty.


3. (C) Politicians from the pan-Green ruling camp have been
less sanguine about the near-term prospects for Taiwan's
formal diplomatic relations, and some have told us they can
live with just a dozen or so formal partners. Democratic
Progressive Party (DPP) legislator Hung Chi-chang predicted
to AIT the number would drop to 15 over the next two years,
which he characterized as "reasonable" for Taiwan as it would
allow the government to focus more on its unofficial
relations. Deep-Green supporters, such as Examination Yuan
President Yao Chia-wen, have told AIT that Taiwan could "live
with" only a dozen partners. They have characterized the loss
of Chad as good because Taiwan could now use its
international assistance funds to explain Taiwan to the US,
Japan, and other countries of greater importance to Taiwan,
as well as for domestic social programs. IIR's Yen argued
that Taiwan's "dollar diplomacy" would be enough to ensure
the support of at least 10 to 12 of the smallest
states--whose combined populations total less than half of
Taipei city's 2.5 million. Such measures, however, are
unpopular as close to 70 percent of Taiwan's population does
not support the use of monetary assistance as a tool for
maintaining formal diplomatic relations, according to one
recent poll.

Key Diplomatic Battlegrounds
--------------


4. (C) Taiwan diplomats on the front-lines of the
competition with the PRC for recognition, however, are more
concerned with maintaining as many official diplomatic
partners as possible. A primary area of focus is Central
America and the Caribbean, where half of Taiwan's formal
diplomatic partners are located. MOFA diplomats are worried
that the loss of one country in the region could trigger a
"domino effect," causing some others to switch recognition to
Beijing in rapid succession. Complicating that scenario is
the announced readiness of the Vatican to switch relations to
Beijing when negotiations are complete, which could further
push the largely Catholic countries of this region to follow
suit. In meetings last month with AIT, MOFA Director for
Central and South American Affairs Ambassador Ko Jai-son
highlighted the sensitive situation in Nicaragua and
requested Washington's assistance to increase cooperation

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between conservative presidential candidates to keep Daniel
Ortega from winning the presidency (See Refs A-B). Ko also
expressed concerns about Panama, noting that China's
interests in the Panama canal and the strong influence of
Beijing's commercial office within business circles there
were making inroads into Taiwan's position. Taiwan's
"co-prosperity" project, launched last year, aims to
encourage Taiwan businesses to move into Central AMERICA to
take advantage of NAFTA while helping Taiwan boost its
commercial relations with key allies, explained Ko.


5. (SBU) Taiwan Foreign Minister James Huang is currently on
a trip to Panama, Costa Rica, and Honduras to meet the heads
of state and foreign ministers of these key allies. Huang
will also hold a meeting with the heads of Taiwan's missions
in the region to map out future diplomatic initiatives.
Huang publicly denied speculation that this trip is an effort
to shore up relations with shaky allies after the break with
Chad, insisting his trip had been planned long before Taiwan
severed ties with Chad on August 6.


6. (C) The South Pacific, with six formal diplomatic
partners, is the next most important battleground for Taiwan.
According to Professor Yen, Taipei will hold its first-ever
summit with Pacific island allies in Palau next month in an
effort to counteract Beijing's push into the region earlier
this year. (Note: Premier Wen Jiabao attended a forum of
China's allies in the region and announced a major aid and
economic investment package in May. End note.) Solomon
islands Prime Minister Sogavare arrived in Taipei this week,
a move that local commentators say is meant to counter
previous speculation that ties with the Pacific island nation
were unstable after riots in May forced a parliamentary
election.


7. (C) Despite the loss of Chad, Taiwan's ties to its
remaining African allies appear relatively stable for the
moment. MOFA officials, nevertheless, have pointed to a few
countries of concern. Director-General for African affairs
Lee Cheng-hsiung said Taiwan is worried that Nigeria's
involvement in the development of oil in Sao Tome could give
the PRC leverage to use its influence with Abuja to press the
African island state to switch recognition. The PRC is also
offering participation in a Free Trade Agreement with South
Africa as an incentive to persuade Swaziland to switch
recognition, Lee claimed.

Long-Term Trends
--------------


8. (C) Professor Yen told AIT that three long-term
developments will undermine Taiwan's position vis-a-vis the
PRC. First, the growth of PRC immigration to countries where
Taiwan has formal relations is outpacing the migration of
people from Taiwan and creates local immigrant populations
more likely to support stepped-up relations with Beijing.
Second, Chinese PRC commerce and business in many countries,
but particularly in Central America, is outstripping Taiwan's
pace of investment, asserted Yen. Third, Beijing has been
more active than Taiwan in co-opting local elites by using
"soft power" tactics, such as providing large numbers of
scholarship and training opportunities for Africans to visit
the PRC. If these trends continue, asserted Yen, Taipei is
bound to lose more allies in the coming years.

Comment
--------------


9. (C) While many local commentators and officials appear
pessimistic about the prospects for Taiwan holding on to all
of its remaining 24 official allies, most observers agree
Taipei has no choice but to continue its quest for additional
diplomatic partners. In addition to symbolic and domestic
political utility, the maintenance of official diplomatic
partners serves as a proxy through which Taiwan can raise
initiatives in international bodies, such as the UN and WHO.
The break with Chad, while not a total surprise within
foreign policy circles, appears to have spurred some
introspection that could lead to a reevaluation of how Taipei
proceeds in its competition with Beijing. The success of
Taiwan's diplomats will in part depend on the effectiveness

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of MOFA and the Chen administration to convince the public
that spending on foreign assistance serves Taiwan's long-term
interests.
YOUNG