TAIWAN ONGOING CONCERNS OVER NICARAGUAN ELECTIONS

C O N F I D E N T I A L TAIPEI 003704 SIPDIS SIPDIS E.O. 12958: DECL: 08/15/2031 TAGS: PREL TW NU SUBJECT: TAIWAN ONGOING CONCERNS OVER NICARAGUAN ELECTIONS Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d) ¶1. (C) National Security Council Deputy Secretary General Joanne Chang (Jaw-ling) told AIT on October 25 that Taiwan continues to monitor closely the runup to the November 5 presidential election in Nicaragua. She expressed concern that multiple candidates opposing Sandanista's Daniel Ortega seem likely to split the conservative vote and give the election to Ortega, resulting in a diplomatic switch from Taipei to Beijing. Chang said Taiwan has taken note of recent U.S. statements calling on the Nicaraguan people to consider the future of a robust U.S.-Nicaraguan relationship when they take to the polls on November 5. Chang demurred on questions about the extent and level of possible support Taiwan may be providing to the candidates running against Ortega. ¶2. (C) Consul General of Nicaragua Armando Miranda told AIT on October 26 that Taiwan officials have reassured him that Taipei will not pull out of Nicaragua if Ortega wins the presidential election and subsequently derecognizes Taiwan. According to Miranda, Taiwan plans to convert its embassy into an economic trade office and wait until the next presidential election because economic investments in Nicaragua are too large to walk away from. Miranda explained that Taiwan has given Nicaragua millions of U.S. dollars in loans to lay the infrastructure and investment for industrial parks that house 17 large Taiwan manufacturers, primarily in textiles. The Taiwan business strategy, added Miranda, has been to use Nicaragua and other countries who are signatories to the Central America Free Trade Agreement as a springboard to the US market. ¶3. (C) Pessimistic on the effects an Ortega victory would have on Nicaragua, Miranda nevertheless predicted that derecognition by Managua would be unlikely to have a domino effect on Taiwan's other allies in the region. Taipei has devoted extensive economic and political resources to hold onto most of its Central American partners and the loss of Nicaragua, resulting from the coming to power of a leftist government, would probably be a "special case." ¶4. (C) Over the past few years the PRC, acknowledged Miranda, has been making very strong overtures to Central American countries, especially those having formal relations with Taiwan. Bejiing has focused talks almost exclusively on promoting economic development programs and investment opportunities for Chinese companies in Central America. Mexico has been playing the role of broker between its southern neighbors and the PRC. Miranda said that in response Taiwan diplomats have quietly approached their allies to express Taipei's apprehension and to emphasize that once Beijing secures their recognition, it will not follow-up on promises of increased aid and investment. Comment -------------- ¶5. (C) A victory for Ortega and a switch in diplomatic recognition to the PRC would be another blow to Taiwan diplomacy following the loss of Chad earlier this August. Taiwan may still enjoy enough economic clout with diplomatic allies in Central America to prevent further defections in the region and keep Beijing at bay for now. The loss of Nicaragua, however, would bring down the number official diplomatic partners to 23, a level precariously close to the historical low of 21 reached in the early 1970s. It could also trigger decisions by other governments currently being wooed by Beijing. One target of particular concern, according to FM Huang, is Costa Rica. This could lead a beleaguered Taipei to further meddle in Central American politics in its ongoing diplomatic contest with Beijing. YOUNG