台灣在中美洲的外援 - 政大學術集成

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(1)國立政治大學社會科學學院亞太研究英語碩士學位學程 International Master’s Program in Asia-Pacific Studies College of Social Sciences National Chengchi University 碩士論文 Master’s 政治 Thesis. 大. 立. ‧ 國. 學 ‧. 台灣在中美洲的外援 Taiwan’s Foreign Aid in Central America. n. er. io. sit. y. Nat. al. C. i n U. v. h e n Padilla Student：Rebecca Maria g c h i Meardi（蕾亞珊） Advisor：Professor Philip Hsiaopong Liu(劉曉鵬). 中華民國 106 年 06 月.

(2) 台灣在中美洲的外援 Taiwan’s Foreign Aid in Central America 研究生：蕾亞珊. Student: Rebecca Maria Padilla Meardi. 指導教授：劉曉鵬 Advisor: Philip Hsiaopong Liu 國立政治大學. 政治大社會科學學院亞太研究英語碩士學位學程立 ‧. ‧ 國. 學. 碩士論文. Nat. io. sit. y. A Thesis. n. al. er. Submitted to International Master’s Program in. Ch. i n U. v. Asia-Pacific i e n g c h Studies. National Chengchi University. 中華民國 106 年 06 月 June, 2017.

(3) ABSTRACT Most studies on Taiwan aid discuss Taiwan’s foreign policies. Not so much research has been done from the viewpoint of the aid recipients on the effects of Taiwan’s development assistance. This research will review Hispanic scholarly articles on Taiwan aid, select one case study and conduct interviews to determine the effectiveness of Taiwan’s aid from the. 治政大 aid and specifically Taiwan International Cooperation and Development 立 Fund’s (ICDF) general strategies in Central America from 1998 to 2015. perspective of Central America. It will also analyze Taiwan’s total foreign. ‧ 國. 學. This study challenges previous investigations by the international community on Taiwan’s “dollar diplomacy” in Central America. Instead it. ‧. will evaluate why Taiwan’s aid is seen as favorable in Central America, in. er. io. sit. y. Nat. spite of the corruption scandals.. Key Words: Taiwan a foreign aid, Central America, “dollar diplomacy”,. n. v i l n C hTaiwan ICDF U development cooperation, engchi. i.

(4) . TABLE OF CONTENTS. ABSTRACT ................................................................................................................................ i LIST OF FIGURES .................................................................................................................. iii LIST OF TABLES .................................................................................................................... iii LIST OF ABBREVIATIONS ................................................................................................... iv CHAPTER 1 INTRODUCTION ................................................................................................. 1 1.1 Research Background ...................................................................................................... 2 1.2 Methodology.................................................................................................................... 5 CHAPTER 2 LITERATURE REVIEW .................................................................................... 8 2.1 International Scholars’ Perspective ................................................................................. 9 2.2 Spanish- speaking Scholars’ Perspective ...................................................................... 15. 立. 政治大. ‧ 國. 學. CHAPTER 3 REVIEWING TAIWAN’S AID ........................................................................ 22 3.1 Taiwan’s ODA ............................................................................................................... 22 3.2 Overview of Taiwan ICDF Strategies ........................................................................... 24 3.3 Taiwan ICDF in Central America ................................................................................. 34. ‧. CHAPTER 4 GUAVA (FRUIT) AS A CASE STUDY .......................................................... 37 4.1 Background: Fruit Market Opportunities for Central America ..................................... 38 4.2 Costa Rica ...................................................................................................................... 39 4.3 Honduras........................................................................................................................ 46 4.4 El Salvador .................................................................................................................... 50. sit. y. Nat. er. io. CHAPTER 5 ANALYSIS ON TAIWAN’S AID IN CENTRAL AMERICA ........................ 55 5.1 Findings ......................................................................................................................... 55 5.2 Discussion ...................................................................................................................... 60 5.3 Evaluation ...................................................................................................................... 63. al. n. v i n Ch CHAPTER 6 CONCLUSION ................................................................................................. 64 engchi U REFERENCES ........................................................................................................................ 66 APPENDIX .............................................................................................................................. 74 Appendix A. Data on Taiwan ICDF Expenditure and Distribution of Expenditure 19982015 ..................................................................................................................................... 74 Appendix B. Interview Questions for Guava Associations ................................................. 80 Appendix C. Interview Questions for Taiwan ICDF officials ............................................ 81 Appendix D. Interview Questions for Embassies in Taiwan .............................................. 82 Appendix E. Interview Transcript ASOFRUL .................................................................... 83 Appendix F. Interview Transcript Comayagua ................................................................... 84 Appendix G. Interview Transcript CENTA-guava farmer in El Salvador .......................... 86 Appendix H. Interview Transcript Guatemalan Ambassador in Taiwan ............................ 88 Appendix I. Interview Transcript Taiwan ICDF Technical Cooperation Director ............. 90 Appendix J. Interview Transcript Embassy of El Salvador in Taiwan ............................... 93 Appendix K. Interview Transcript Taiwan ICDF Lending and Investment Director ......... 95 Appendix L. Interview Transcript Director of Latin American Studies, Dr. Kung. ........... 97. ii.

(5) . LIST OF FIGURES Figure 2.1 Latin America and the Caribbean trade with China and Asia-Pacific, 2011.......... 18 Figure 3.1. Taiwan's ODA 2008-2015 ..................................................................................... 23 Figure 3.2. Taiwan's ODA distribution per sector 2009 to 2015 ............................................. 24 Figure 3.3. Technical cooperation expense distribution 2004-2006 ........................................ 29 Figure 3.4. Technical mission distribution 2004-2009 ............................................................ 30 Figure 3.5. Technical mission distribution 2010 ..................................................................... 31 Figure 3.6. Technical mission expenditure 1999 to 2015 ........................................................ 31 Figure 3.7. Investment distribution 2010-2012........................................................................ 32 Figure 3.8. Lending distribution 2010-2012 ............................................................................ 33 Figure 3.9. Education and training expenses(US$) 2001 to 2015 ........................................... 34 Figure 4.1. Value of fruit market in Millions USD.................................................................. 38 Figure 4.2. Map of Taiwan ICDF guava project locations in Costa Rica ................................ 40 Figure 4.3. Costa Rica's exports of guava ................................................................................ 42 Figure 4.4. Map of Taiwan ICDF guava project locations in Honduras.................................. 46 Figure 4.5. Honduras production of guava 2004-2015 ............................................................ 48 Figure 4.6. Honduras' exports of guava ................................................................................... 49 Figure 4.7. El Salvador’s imports of guava ............................................................................. 53. LIST OF TABLES. 學. ‧ 國. 立. 政治大. ‧. y. sit. n. al. er. io. Nat. Table 4.1 Producers and quantity of plants of Thailand Guava in Costa Rica ........................ 41 Table 4.2.Production of guava in El Salvador 2015-2016 ....................................................... 52. Ch. engchi. iii. i n U. v.

(6) . LIST OF ABBREVIATIONS ADOC ASOCANJELITO ASOFRUL CABEI CATO CENTA CITC CNAF COMRURAL. ‧ 國. 立. Environmental Protection Administration Hong Kong Nicaragua Canal Development group Information and Communication Technology Institute of Agricultural Development [Instituto de Desarollo Agrario] Inter-American Development Bank International Economic Cooperation and Development Fund National Institute of Learning [Instituto Nacional de Aprendizaje] Rural Development Institute [Instituto de Desarollo Rural] National Instituto of Cooperative Promotion [Instituto Nacional de Fomento Cooperativo] Institute for Agricultural Transformation [Instituto Salvadoreño de Transformacion Agraria] Information Technology Center of International Commerce [Centro de Commercio Internacional] Kuomintang Ministry of Agriculture and Livestock [Ministerio de Agricultura y Ganaderia] Millennium Development Goals Multilateral Investment Fund Ministry of Economic Affairs Ministry of Finance Ministry of Foreign Affairs Manzana is a measuremt commonly used in Central America and is equivalent to 1.72 acres. Non-Governmental Organizations Official Development Assistance. n. al. er. io. sit. y. ‧. Nat. EPA HKND Group ICT IDA IDB IECDF INA INDER. 政治大. 學. COOPEPROGUATA DAC DPP. APEC Digital Opportunity Center Association of Producers from Canjel, Nicoya [Asociación de Productores de Canjel de Nicoya] Association of Fruit Producers from Lepanto [Asociación de Fruticultores de Lepanto] Central America Bank for Economic Integration Central America Trade Office Center of Agricultural Technology and Forestry Technology [Centro de Tecnologia Agropecuaria y Forestal] Committee of International Technical Cooperation National Committee of Family Agriculture [Comité Nacional de Agricultura Familiar] Rural Competitiveness [Competitividad Rural] Cooperative of Taiwanese Guava Producers [Cooperativa de Productores de Guayaba Taiwanesa] Development Assistance Committee Democratic Progressive Party. INFOCOOP ISTA IT ITC KMT MAG MDGs MIF MOEA MOF MOFA Mz NGOs ODA. Ch. engchi. iv. i n U. v.

(7) Organization for Economic Cooperation and Development Central American Fisheries and Aquaculture Organization [Organización del Sector Pesquero y Acuícola del Istmo Centroamericano] People’s Republic of China Promoter of Foreign Commerce Costa Rica [Promotora de Comercio Exterior de Costa Rica]. OECD OSPESCA PRC PROCOMER. Republic of China-Taiwan. ROC ROC-CAEDF. Republic of China-Central America Economic Development Fund Central American System of Custom Classification [Sistema Arancelario Centroamericano] Department of Agriculture and Livestock Honduras [Secretaria de Agricultura y Ganaderia]. SAC SAG. Sino-Africa Technical Cooperation Committee. SATCC SDGs. 立. Small and medium enterprise. ‧. Taiwan International Cooperation and Development Fund Technical and Vocational Education and Training United Nations United States of America World Health Organization. n. al. er. io. sit. y. Nat. SME Taiwan ICDF TVET UN US WHO. 學. ‧ 國. SICA SIECA. 政治大. Sustainable Development Goals Central America Integration System [Sistema de Integracion Centroamericana] Central America Economic Integration System [Sistema de Integracion Economica Centroamericana]. Ch. engchi. v. i n U. v.

(8) . CHAPTER 1 INTRODUCTION “Taiwan is financially rich but diplomatically poor” (Chan, 1997, p.37). In 2017, Taiwan was recognized by just 20 countries, 11 of which are located in Latin America and the Caribbean and 5 in Central America (that accounts for 25% of nations). Hence, the importance of the Central American region to Taiwan. They are crucial to Taiwan’s claim of national sovereignty based on international recognition. Many scholars claim that Taiwan’s foreign aid objective is political due to Taiwan’s search of international recognition (He, 2005; Tubilewicz& Guilloux, 2011). Foreign aid is a tool for maintaining and enhancing relations with small and impoverished Central American. 政治大 Taiwan’s foreign aid is well known in the scholarly community for being “dollar 立 diplomacy”. The continuous fight over diplomatic allies with the Chinese government nations (He, 2005).. ‧ 國. 學. forced Taiwan to use monetary incentives; a strategy that was mainly used in African nations and later, when most of those nations had switched recognition in Latin. ‧. America. In spite of that, in Central America, Taiwan’s aid is seen as very favorable and is well received. This raises the question can Taiwan’s aid be judged solely on the. Nat. sit. y. basis of ‘dollar diplomacy’ and be seen as ineffective or has it benefitted Central. er. al. n. America?. io. America societies? In other words, has Taiwan’s foreign aid been effective in Central. Ch. i n U. v. This research will try to answer this question by studying Hispanic scholarly. engchi. articles, analyzing Taiwan’s aid, strategies and projects in the region, and through the use of a case study and holding interviews. It will determine if Taiwan’s foreign aid has helped development in Central America from the recipients’ perspective. The purpose of this research is to review Taiwan’s foreign aid from diverse viewpoints: that of the international community, Taiwan ICDF and aid recipients. Although Taiwan has made use of controversial foreign aid tools, to judge it only on the basis of ‘dollar diplomacy’ would be narrow-minded. Taiwan has also used foreign aid to promote education, provided hands-on training to local farmers, provided access to financial credits to micro-, small- and medium-sized enterprises in Central America and much more.. 1.

(9) . 1.1 Research Background Taiwan’s Aid History Taiwan’s first foreign aid project was in 1959, for Vietnam and consisted of technical assistance for agricultural development (MOFA, 2009). The project proved to be successful, Taiwan decided to start aid programs specifically in Africa with Operation Vanguard in 1961. The programs provided agricultural technical assistance and they soon became a success. The programs were renamed Sino-Africa Technical Cooperation Committee(SATCC) and continued providing development assistance in Africa(Taiwan ICDF, 2012). SATCC was the first Taiwanese institution to manage development projects. This institution became obsolete as Taiwan lost most of its. 政治大. African allies and its UN seat. As a result, Taiwan was forced to rethink its foreign aid. 立. strategy and also its institutions.. ‧ 國. 學. Taiwan had to shift its foreign aid policies from Africa to Latin America. The main reasons for Taiwan’s decision were: 1) to please the United States and hopefully not lose its diplomatic recognition. 2) Almost half of Taiwan’s allies were located in. ‧. Latin America and Caribbean and 3) most of these nations were underdeveloped which. y. Nat. allowed Taiwan to take advantage of its previous successful cooperation programs in. io. sit. Africa and continue to provide agricultural technical assistance to countries in the. n. al. er. Caribbean and Central America (Cheng, 1993). In 1972 Taiwan created its second. i n U. v. institution to manage foreign assistance, this time with the name of the Committee of. Ch. engchi. International Technical Cooperation(CITC). SATCC was renamed CITC. This new entity provided allies with technical assistance in production so that they could become self-sufficient (Taiwan ICDF, 2004). Despite, Taiwan’s interest in the region, the amount of economic aid provided to Latin America was not as big as the one given to Africa in the 1960s (Cheng, 1993). In 1979, foreign aid became more important to Taiwan as it had lost the recognition of its most important ally: the US. Taiwan had to rethink and be more creative in the usage of foreign aid to avoid isolation. In 1988 under President Lee’s pragmatic diplomacy, Taiwan created the International Economic Cooperation and Development Fund(IECDF) under the Ministry of Economic Affairs(MOEA) (Taiwan ICDF, 2012). The IECDF’s goal was to assist economic development to its allies and friendly countries. This entity provided direct and indirect investment. At the same time. 2.

(10) many other foreign aid projects were also being carried out by Ministry of Foreign Affairs (MOFA). IECDF didn’t centralize all of the development assistance projects. MOFA was still in charge of the CITC who provided technical assistance, humanitarian aid, loans and grants (Cheng, 1993). Other agencies such as the Ministry of Finance(MOF), the Council of Agriculture and the Export-Import Bank of Taiwan would also provide foreign aid. MOFA supervised and authorized all of the foreign aid projects and decided the purpose of the aid, diplomatic or economic. Despite that IECDF was under the MOEA and that CITC was a semiautonomous institution, MOFA was a leading member of both IECDF and CITC. The superior role of MOFA in the decision making process of grant or loans to allies, caused conflict between MOEA and also MOF. Taiwan ICDF was created in. 政治大. 1996. This new entity under the administration of MOFA consolidated the activities of. 立. CITC and IECDF.. ‧ 國. According. to. the. Organization. for. 學. Definition of Taiwan’s Foreign Aid. Economic. Cooperation. and. ‧. Development(OECD) , Official Development Assistance(ODA) foreign aid is defined as a monetary transaction from Development Assistance Committee (DAC) to. Nat. sit. y. developing nations and multilateral institutions with “the promotion of economic. er. io. development and welfare of developing countries as its main objective and is concessional in character and conveys a grant element of at least 25%.”(OECD, n.d.).. n. al. Ch. i n U. v. Morgenthau (1962) is more explicit in his definition that foreign aid is a common title. engchi. given to different kinds of aid that have one thing in common, the transfer of money, goods or services from few rich nations to many poor nations and they can be classified as: humanitarian, subsistence, military, bribery, prestige and aid for economic development. All except humanitarian can be considered political aid and in some cases, even humanitarian foreign aid is political when the money is transferred from one government to another. The real objective of foreign aid has been masked with the development claim; instead, donors’ objectives are based on their self-interest. Younas (2008) determined that “economic and political self-interests of donor countries dominate their stated objectives for reducing poverty and promoting development through aid in developing countries” (p.672). Hence, aid is only a political tool from rich nation to poor nations, which favors donor nations instead of recipients. However, in the contemporary world 3.

(11) these definitions and objectives fall too short to explain foreign aid from non-DAC countries. In the last few decades, the world has seen the inclusion of new players in the foreign aid arena such as: China, India, Brazil and South Africa. According to Quadir (2013), these new actors have changed the conventional and traditional practices of foreign assistance. They have challenged the meaning of foreign assistance. Yet, not all are “new” donors, in terms of years providing aid, as some have assisted since the 1950’s. The main difference is that they do not follow traditional donors’ standards. They are part of the south-south cooperation, a term that’s been used since the beginning of the 1980’s (Lopez Cabana, 2014), and is development assistance given from one developing nation to another.. 政治大. Members of the south-south cooperation share several characteristics. First of. 立. all, a preference for “‘horizontal cooperation’ based on the principals of equality,. ‧ 國. 學. partnership and mutual interest” (Quadir, 2013, p.324). Meanwhile, traditional donors have a more hierarchical foreign assistance that reinforces the inequality from the donor. ‧. to the recipient. Second, the south-south cooperation has not put much effort on creating institutions that monitors and manages their foreign aid. For this reason, there is a lack. sit. y. Nat. of statistical information or research on the effectiveness of their aid programs. Third and last, south-south cooperation objectives are quite similar to traditional donors.. io. n. al. er. “Like DAC countries, most southern donors use their overseas development assistance. i n U. v. programs to promote their own trade, investment and commercial interest” (Quadir, 2013, p.333).. Ch. engchi. A relative newer term in development assistance is triangular cooperation. According to Guido (2010), this is an important and emergent type of development assistance. Triangular cooperation is technical cooperation that is provided from a traditional donor to a beneficiary country in the south via an emerging donor in the south. The cooperation provided is based on a successful case of assistance between a traditional donor and emerging donor. Later the emerging donor can transfer the experience to a developing nation. However, this new type of cooperation doesn’t apply to Taiwan. Although Taiwan is not a DAC member nor a south-south cooperation member and can’t make use of triangular cooperation, Taiwan’s aid characteristics are more similar to that of the south-south cooperation than a traditional donor. According to 4.

(12) Wang (1990), Taiwan’s technical cooperation “represents an attempt by one developing country to enhance the economic progress of other developing countries” (p.162). Taiwan’s aid, in contrast to developed nations, “exported no political ideology, conducted no subversive activities, promoted no revolution to overthrow the government of the host country, and presented no political threat to any of the host country as a condition for technical cooperation or other forms of assistance” (Wang, 1990, p.174). However, it can be argued that the Taiwanese government considers foreign aid as a North to South aid. Since 2012 the Taiwanese Executive Yuan publicly declares Taiwan’s Official Development Assistance as per OECD standards on Taiwan Statistical Databook. Taiwan’s aid started from only being bilateral agricultural cooperation in. 政治大. 1960’s. By the 1980’s Taiwan included in its foreign aid: bilateral and multilateral. 立. grants and loans (Cheng, 1993). By the 1990’s aid had expanded to: technical. ‧ 國. 學. cooperation, grants and loans and humanitarian relief (Chan, 1997; Cheng, 1993). In addition to promotion of investment, especially in Latin America (Wang, 1990). This. ‧. statement was also confirmed by Lee (1993) who claimed that investment goes along. er. io. 1.2 Methodology. sit. Nat. were also considered part of Taiwan’s aid (Lee, 1993).. y. with Taiwan’s aid in Latin America. By the 1990’s donations to multilateral institutions. al. n. v i n This research was a C qualitative U in three parts. The first part h e n gresearch i divided h c was an analysis of secondary and tertiary data. The objectives were: first, to review. academic articles on Taiwan’s aid to Central America in English and Spanish. Second, gather information on Taiwan’s foreign aid and understand Taiwan ICDF aid strategies and activities in the Central American region. Articles were gathered from academic journals and books written on Taiwan’s foreign aid. In addition, reports from Taiwan ICDF, MOFA and Taiwan’s Statistical databook. The second part of this research was a case study of a project carried out in Central America by Taiwan ICDF. The project selected was a technical cooperation project due to the importance of this element of Taiwan’s foreign aid in Central America- Taiwan relations. The case selected was a horticultural project, the Taiwanese guava. This is a relatively new variety of guava in Central America that involved a. 5.

(13) transfer of technology and knowledge from Taiwan’s technicians to locals. The scope of the case study included Costa Rica, were guava was first introduced, followed by Honduras and El Salvador. The case study is a detailed description of Taiwan ICDF projects and the results on the country’s guava production and on aid beneficiaries until now. The research used reports from the Ministry of Agriculture and Livestock [Ministerio de Agricultura y Ganaderia] (MAG) of each country, newspaper reports, statistics on exports and imports of guava, statistics on production of guava and any other report from local institutions regarding the Taiwanese guava. In addition, three interviews were carried out, one per country. The objective of the case study was to determine the long- term results of guava in Central America. The third and last part of this research was in-depth semi-structured form. 政治大. interviews. The total sample size was 8 interviewees. Interviews were carried out with. 立. two Taiwan ICDF employees, the ambassador of Guatemala in Taiwan, the minister-. ‧ 國. 學. counselor of El Salvador’s embassy in Taiwan, the director of Latin American studies of Tamkang University and three guava farmers. The interviews were carried out with. ‧. the objective of further understanding Taiwan ICDF activities, objectives and results in Central America. Interviews provided this research first-hand information on Taiwan’s. sit. y. Nat. aid strategies to Central America, successful cases of development assistance and projects in which the institution didn’t achieve the desired results, as well as. io. n. al. er. understanding Taiwan ICDF final goal in Central America. All of these interviews. i n U. v. provided different viewpoints of Taiwan ICDF activities in Central America.. Ch. engchi. The scope of the research focused in English and Spanish written articles. Analysis on Taiwan’s foreign aid expenditure, Taiwan ICDF strategies in Central American (including Costa Rica from 1998 to 2007) from 1998 to 2015. This paper has chosen Taiwan ICDF due to the importance of its development cooperation to the Central American region. The timeframe was selected based on availability of information; the annual reports currently available are from 1998 until 2015. The guava case study includes the countries of Costa Rica, Honduras and El Salvador. The following research is divided in 6 chapters. The first chapter introduces the research importance, provides a research background and explains the methodology. The second chapter reviews scholarly articles from the international community and the Hispanic community. The third chapter is an overview of Taiwan’s foreign aid and Taiwan ICDF strategies. The fourth chapter is a case study on guava projects in three 6.

(14) countries: Costa Rica, Honduras and El Salvador. The fifth chapter is an analysis on Taiwan’s aid in Central America which includes findings, discussions and evaluation of the research. The last chapter is the conclusion of this research.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 7. i n U. v.

(15) . CHAPTER 2 LITERATURE REVIEW Almost 70 years have passed since development assistance was promoted by the United States to assist war-torn nations and developing regions. After WWII, Europe was left completely destroyed and US feared expansion of Soviet Union’s communist ideology in the region. In order to contain the Soviet Union and at the same time expand US free market ideology, the US enacted the Marshall plan in 1948. (US Department of State, n.d). This plan provided Europe with an investment of US$13billion and the goal was to “stabilize Europe, not as a permanent program for Europe recovery but as an emergency tool of assistance” (USAID, 2002). Later, the Marshall plan was followed. 政治大 contrary to the Marshall plan that assisted war-torn nations in Europe, the major 立 beneficiaries of Point Four program were developing nations. The objective of the Point by the enactment of the Four Point Program by president Truman in 1949. On the. ‧ 國. 學. Four program was “aiding the development of economically underdeveloped areas by making available technical resources and, on a cooperative basis fostering capital. ‧. investment in them.” (United States Committee on Foreign Affairs,1949, p.1). After both of these plans, aid to developing regions became an integral part of other countries. Nat. sit. y. foreign aid policies.. er. io. The Marshall plan has been regarded as a successful program. However, the results expected for foreign aid in developing nations to yield growth, to date, are still. n. al. Ch. i n U. v. inconclusive. Some scholars claimed that aid leads to growth and poverty reduction. engchi. under certain conditions such as good institutions (Collier & Dollar, 2001). Others argue that results are undetermined (Rajan & Subramanian, 2008), another group protested that aid as it has been currently given by aid agencies has not helped at all (Easterly, 2003), instead it slows down or hinders it (Moyo, 2009). Due to the controversy of this topic, the continuous evaluation of foreign aid through different perspective is important for society. Continuous research will provide a better understanding and may determine what are the best ways in which foreign aid can be given by donor nations and under what terms recipients should receive it. This research literature review is divided into two main sections: International scholars’ perspective and the Spanish- speaking scholars’ perspective.. 8.

(16) . 2.1 International Scholars’ Perspective Taiwan’s aid objectives “Taiwan’s foreign aid has and will always be a diplomatic tool” (Chan, 1997, p.37). Taiwan’s foreign aid objective is also confirmed on Taiwan’s first white paper (2009) in which the Ministry of Foreign affairs claimed “Diplomacy’s primary objective is to seek to maximize a nation’s interest, and ensure its survival and development. Providing aid to foreign countries forms an important part of this…” (Preface). No matter what public statement is made, the objective of Taiwan aid is clear: to maintain and increase is diplomatic allies’ pool (Tubilewicz& Guilloux, 2011). Taiwan’s focus on increasing international recognition in order to obtain national. 政治大. sovereignty is a legacy of the era of President Lee- Teng Hui (He, 2005). Some. 立. strategies used during his era were to have a broad diplomatic representation, to. ‧ 國. 學. increase international agreements, frequent high-level official visits and whenever possible establish diplomatic relations (He, 2005). His policies have persisted the successive presidency of Democratic Progressive Party (DPP) Chen Shui-Bian and. ‧. Kuomintang (KMT) Ma Ying-Jeou.. y. Nat. Taiwan foreign aid includes: technical cooperation, lending and investment,. io. sit. humanitarian aid, education and training (Taiwan ICDF, 2015) and donations to. n. al. er. multilateral institutions (Cheng, 1993). Some authors claimed that bribes were also an. i n U. v. element of Taiwan’s aid. According to Tubilewicz & Guilloux (2011), projects under. Ch. engchi. Taiwan’s “confidential budget” constituted 15% to 25% of Taiwan’s total foreign aid. The information on the confidential budget projects are not disclosed on the name of national security (Chen, 1993) but Tubilewiz& Guilloux (2011) concluded is used as a form of bribery to secure diplomatic recognition. For this reason, Taiwan’s aid is commonly referred as ’dollar diplomacy’. According Chen & Erikson (2007), “dollar diplomacy” or “checkbook diplomacy” is giving cash payment to the politicians to their personal account. Instead, Van Vranken (2007) has a more specific definition is “a policy whereby Taiwan bribed small countries to remain loyal diplomatic allies” (p.15). Consequently, Taiwan has been involved in many corruptions scandals from the Mayan ruins of Tikal in Guatemala down to the Panama Canal. Officially, the government declared that international cooperation and. 9.

(17) development includes: “technical assistance and capacity building, investments, loans, guarantees, financial donations, gifts in kind, dispatch of personnel, development strategy consultation and other feasible methods” (MOFA, 2010). The Taiwanese government explicitly stated, “a classified budget may be arranged for projects that involve national secrets.” (MOFA, 2010). Taiwan’s Foreign Policy 1990’s to 2010’s Decade of 1990 Articles on Taiwan’s foreign aid during the 1990’s discussed Taiwan’s success in gaining diplomatic space. From having lost 46 allies in the 1970’s (Van Vranken, 2007), the 1990’s brought an increase international recognition from only 22 nations in. 政治大 to Lee (1993), the end of martial law allowed President Lee to use more creative 立. 1988 to 29 in 1992, as a result of its economic aid programs (Chen, 1993). According diplomatic strategies such as the ‘pragmatic diplomacy’.. ‧ 國. 學. As Van Vranken (2007) explained, this new foreign policy marked a great shift from Taiwan previous policy of no tolerance to a more to open and flexible approach. ‧. of acceptance of dual recognition. According to the previous author, pragmatic. y. Nat. diplomacy included the reinforcement of diplomatic relations, establishing substantive. sit. relations with countries that do not recognize Taiwan and the readmission of Taiwan to. er. io. international organizations. Lee (1993) deemed this policy as successful since it was. al. v i n C heconomic achievement part of the success to Taiwan’s e n g c h i U claiming that “Taiwan's ability to increase its aid capacity will no doubt ensure that aid can remain a useful, if limited, n. able to achieve its main objective of winning more allies. Yet, Chan (1997) attributed. diplomatic tool and a potentially important economic tool.” (p.56) Wang’s (1990) findings are very similar to previous authors. He claimed that before 1979, Taiwan was successful in obtaining allies in Latin America because of the cold war and the great anticommunist feeling in the region. After 1979, it was necessary to use diplomatic tools such as: technical cooperation, trade and, at the moment Wang’s paper was written, Taiwan had promised investment in the region. Wang (1990) concluded, “The Republic of China-Taiwan (ROC) ‘s economic cooperation with Latin America…is more fruitful [than China].” (p.173). In spite of the optimistic feelings that foreign aid had brought to Taiwan in the 1990’s, those feelings were not share by all in Taiwan. Opinions on foreign aid by. 10.

(18) government officials was polarized. Some wanted to use aid as a political tool to promote international recognition; others wanted to use it as an economic tool to promote humanitarian, trade and investment objectives (Chan, 1997). The opposition party - DPP-, kept pressuring the government to stop wasting the money on ‘dollar diplomacy’ (Lee, 1993), and the civil society was also protesting that “the political returns obtained from these countries fall far short of Taiwan's aid investments in them” (Chan ,1997, p.56). Chen (1993) was convinced on the advantages of foreign aid but claimed that ‘dollar diplomacy’ was one of the problems of Taiwan’s foreign aid and that is necessary for the government to become more transparent. 2000 to 2008. 治政大Taiwan lost the recognition of 8 war between Taiwan and China. During this period, 立 allies, from 29 in 2000 to 21 in 2008 (Tubilewicz & Guilloux, 2011), out of which 3 In 2000’s, China increased presence in Latin America intensified the diplomatic. ‧ 國. 學. were Latin American (including the Caribbean) nations.. He (2005) claimed that some of the strategies used to fight this diplomatic war. ‧. were: semiofficial or unofficial recognition, increased presence in regional organizations, United Nations (UN) vote, foreign aid, trade and direct investment.. Nat. sit. y. Research done by Chen & Erikson (2007) obtained very similar results, but in addition,. er. io. it included frequent visits to the region, signing free trade agreements with its allies and increased presence of non-governmental charity institutions in the region. (Cheng,. al. n. 2016). Ch. engchi. i n U. v. Some scholars claimed that using trade as strategy to keep its Central American diplomatic allies was no longer sustainable for Taiwan. Since exports from Latin America to China had increased at a pace of 60% per year and more than six-folded by 2006 (Chen & Erikson, 2007). However, research by Avendaño & Dayton-Johnson (2015) determined that Central American nations are not benefitting from the increase in trade from Latin America to China. Exports from Central America to China are miniscule, only Costa Rica and Panama increased their exports, with only 5% of their total exports going to China. In an attempt to increase trade Taiwan insisted on establishing a free trade agreement with Central America nations and Paraguay (Chen & Erikson, 2007). In the case of China, using trade as a strategy was also not so successful as Central American nations saw China as a menace due to its large number of cheap 11.

(19) labor. China could endanger Central America’s emergent manufacturing sector (Chen & Erikson, 2007). Some authors claimed that establishing relations with China on basis of trade would not benefit Central America. Avendaño & Dayton-Johnson (2015) determined that since the Central American region produced similar products as China, therefore “there is little in China’s rise likely to benefit Central American countries at present” (p.33). From an investment perspective, He (2005) stated that Taiwan has been a major investor in Central America for many years and still is attempting to get more investment in the region. This fact is contradicted by Chen & Erikson (2007) that claimed no matter Taiwan’s government desire for investment in Central America, the results had not been what was expected. Cheng (2016) also concurred that Taiwan’s. 政治大. investment in the Central region is quite small. Most of Taiwan’s investment in Latin. 立. America is in British territories in the Caribbean. From this we can conclude, Taiwan’s. ‧ 國. America.. 學. investment strategies to maintain diplomatic allies has been unsuccessful in Central. ‧. Both China and Taiwan have increased the presence in regional organizations in Latin America (He, 2005). Despite China’s effort to isolate the island, Taiwan has. sit. y. Nat. been successful in having presence through international organizations in Central America. Some examples of these are: the Central America Integration System. io. n. al. er. [Sistema de Integracion Centroamericana] (SICA), Central America Bank for. i n U. v. Economic Integration (CABEI) and the Inter-American Development Bank (IDB). Ch. engchi. (Chen et.al, 2007; He, 2005). On top of that, it holds an observer status in the Central American Parliament and the Forum of the Presidents of the Legislative Powers of Central America (Cheng, 2016). Taiwan’s non-governmental organizations have also been expanding globally increasing its international space (Chen, et. al, 2007). China’s UN vote also plays against Taiwan’s international recognition. China rarely used its veto vote but has used it in certain occasions to punish Taiwan’s friends whenever they push to obtain Taiwan’s recognition in the UN (He, 2015). China has been able to steal some of Taiwan’s friends by using the UN vote card. Another strategy that has been used by both China and Taiwan has been the establishment of commercial offices in many of the countries in which both did not have any sort of diplomatic recognition (He,2005). This opens a road for communication between that nation and China or Taiwan, which could lead to a switch in diplomatic recognition. 12.

(20) Scholars claimed that Taiwan has made use of its ‘dollar diplomacy’ strategy in exchange for diplomatic recognition. “Taiwan has practiced ‘checkbook diplomacy’ in Central America and the Caribbean-with uneven results- but a large number of countries find the lure of China’s market more attractive than supporting Taiwan” (He, 2005, p.88). Chen & Erikson (2005) agreed with He (2005) that for Taiwan “the good old fashioned cash, in the form of development aid, is still indispensable to the maintenance of those ties” (p.78). During the 2000’s, the small scale of commercial activities between the Central America region and Taiwan and the increasing pressure of the rising dragon gave Taiwan no other option but to continue using ‘dollar diplomacy’. (Chen & Erikson, 2007). The election of the DPP which was expected to bring an end to ‘dollar. 政治大. diplomacy’ never happened. According to Van Vranken (2007), the Chen’s. 立. administration claimed that “it has put an end to the KMT’s long standing practice of. ‧ 國. 學. ‘dollar diplomacy’” (p. 15) was proven to be false, “there is evidence that Taipei still engages in some forms of ‘dollar diplomacy’ to retain diplomatic allies” (p.15). On the. ‧. contrary, Tubilewicz & Guilloux (2011) argued that President Chen’s decision to diminish foreign aid expenditure was the reason for losing 7 diplomatic allies. The. sit. y. Nat. author claimed, “the evidence suggests that the Chen administration resisted blackmail, particularly from aid recipients where Taiwan was already among the largest aid. io. n. al. er. donors” (p.335). Huang (2016) differs in opinion from Tubilewicz & Guilloux (2011). i n U. v. in the fact that during Chen’s presidency “the two sides of the Taiwan strait still. Ch. engchi. implemented ‘Chequebook diplomacy’” (p.469) yet agreed with Tubilewicz & Guilloux (2011) in the fact that the ‘classified budget’ shrank. President Ma’s term DPP realized that it was unsustainable to compete with China’s foreign aid since China could and would offer much higher amounts of foreign aid. For this reason, President Ma negotiated a ‘diplomatic truce’ with China. This truce would suspend aid competition to gain allies (Tubilewicz & Guilloux, 2011). Huang (2016) argues the diplomatic truce is responsible for ending the ‘chequebook’ practice. He concluded, “Taiwan, under the leadership of President Ma, has fairly recovered bilateral relations that were damaged before by ill-practice diplomacy” (p.476). Stallings (2017) also agreed with Huang that ‘dollar diplomacy’ has finally ended. “This so-called competitive checkbook diplomacy between the People’s Republic of China (PRC) and 13.

(21) Taiwan was limited after a 2008 “truce” was declared between the two, although some aid continues to flow from each side, albeit in more discreet way” (p.73). On the other hand, Cheng (2016) believed that under President Ma the fierce contest between China and Taiwan weakened but not ended. A good example of how the truce worked in Central America can be seen in El Salvador. In 2009, for the first time in El Salvador’s history, the left-wing party won the presidential elections. The new president wished to switch recognition to Beijing due to its similar ideology. According to Alexander (2014) on March 2010 the viceChairman of Mainland Affairs Council of Taiwan said that “El Salvador had tried to recognize the PRC at some point after the election of President Funes in 2009, but that Beijing had turned them down stating that they, ‘did not want to hurt the cross-strait. 政治大. reconciliation’ (Chang, cited in DPA, 2010)” (p.119).. 立. “Foreign aid is not, and cannot be, divorced from foreign policy goals” (Taffet,. ‧ 國. 學. 2007, p. 2). Taiwan’s foreign aid clearly and undeniable is linked to foreign policy. However, it should not be assumed that only because Taiwan’s foreign policies might. ‧. have included certain non-transparent elements in the past, all of Taiwan’s foreign aid is non-transparent. Taiwan ICDF is an institution that is annually audited by accounting. sit. y. Nat. firms and financial reports are public. According to Taiwan ICDF secretary deputy, Taiwan ICDF manages around 12% to 15% of Taiwan’s annual foreign aid budget.. io. n. al. er. Most scholars have focused on discussing the political aspect of Taiwan’s foreign. i n U. v. policy but little has been written on how effective is Taiwan’s aid is on recipient. Ch. engchi. countries. Should Taiwan aid be judged solely based on ‘dollar diplomacy’ as inefficient? Alternatively, has it actually benefitted the Central America societies? Taiwan’s Aid Results in Central America While not many studies look at Taiwan’s aid results from the perspective of the recipients. Alexander (2014) on his book China and Taiwan in Central America: Engaging Foreign Publics in Diplomacy provided an in-depth research on Taiwan’s public diplomacy in the Central America region. Alexander (2014) claimed that Taiwan is not performing well with the civil society of its partner allies. Taiwan is too focused on pleasing government officials that it has forgotten the importance of the civil society. In addition, Taiwan’s objectives are too narrow in comparison to China. “Taiwan’s objectives in El Salvador mainly revolve around the continuation of its formal diplomatic relationship with the government. Whereas China’s objectives in El 14.

(22) Salvador appear to be both political and economic” (p.154). The author believed that Taiwan’s challenge comes from improving its public diplomacy and having more objectives with the region. Alexander’s research on Taiwan’s foreign aid although insightful, focused solely on public diplomacy. It does not provide the viewpoint of aid beneficiaries or Central American’s scholars regarding Taiwan’s aid effectiveness in the region. In order to so, this paper would like to answer the following question: What are the different perspectives from Central America (scholars, recipients and public officials) regarding the effectiveness of Taiwan’s aid?. 2.2 Spanish- speaking Scholars’ Perspective. 政治大 rivalry for recognition in the Central American region. However, this paper is not 立. Spanish-speaking scholars focus mostly on evaluating China’s and Taiwan’s. interested on discussing this issue, instead it tried to determine the scholar’s viewpoint. ‧ 國. 學. on Taiwan’s aid and effectiveness in Central America. In order to do so, it was first necessary to determine the reasons why Central America still recognizes Taiwan. Those. ‧. reasons provided the key elements on why Taiwan has been successful in Central. y. Nat. American nations. China will be mentioned on the following analysis, as Taiwan’s. n. al. er. io. Reasons for Taiwan’s Recognition in Central America. sit. elements of success demonstrate China’s weaknesses and vice versa.. i n U. v. Aguilera Peralta (2006) defined 4 reasons on Central America’s recognition of. Ch. engchi. Taiwan, which are: cold war brotherhood, bilateral and multilateral cooperation, diplomatic relations and commercial activities. Rodriguez (2013) argued seven key variables which Costa Rica and Nicaragua based their decision to switch recognition or continue recognizing Taiwan. Those variables are: United States of America(US) role in Central America politics, personal diplomacy, semiofficial recognition of Beijing or Taipei, development cooperation, commerce and foreign investment opportunities and membership to international organizations. After reviewing both authors variables, I determined four variables are consistent with both scholars, those are: history of Taiwan’s foreign aid to Central America, development cooperation, commerce and investment opportunities and participation in the regional integration process. Each variable is explained below.. 15.

(23) History of Taiwan’s Foreign aid to Central America The Central American region established diplomatic relations with Taiwan during the cold war. Following US foreign policy towards Taiwan was the initial reason for recognition of Taiwan by Central American countries. (Rodriguez, 2013). Taiwan’s foreign aid during the 1960’s had focus mainly in Africa. It wasn’t until Taiwan lost its UN seat that it decided to change its priority to Latin America. This was done for several reasons, one was hoping not to lose US recognition, as US considered Latin America to be part of its national interest. The attempt was in vain as in 1979 the US switched recognition to Beijing. Most of the countries in Latin America also switched recognition with the exception of Central America.. 治政大point that, during the cold war, alive the relationship(Aguilera Peralta, 2006).To the 立 Taiwan government provided military training to the authoritarian regimes in Central Common anti-communist ideology between Taiwan and Central American keep. ‧ 國. 學. America. (Aguilera Peralta, 2006; Alexander, 2014). “Military diplomacy” in Central America is something that the Taiwanese government prefers to keep out of public. ‧. information and it’s been successful in doing so because of the small amount of articles and information available (Alexander, 2014). This foreign policy allowed Taiwan to. Nat. sit. y. establish personal links with the political elites of the Central American nations. The. er. io. historical link between Taiwan and right-wing political parties in Central American nations is the reason why president Ortega, in Nicaragua, broke diplomatic relations. n. al. Ch. i n U. v. with Taiwan in 1985. On the following elections, when the right-wing party won,. engchi. Nicaragua switched again recognition to Taiwan. Ideology and US policies might have been a reason in the past but what are the current reasons for Central America to continue recognizing Taiwan? Personal and Visit Diplomacy Rodriguez (2013) defined “personal diplomacy” as creating personal relations between Taiwanese functionaries and important members of ally countries by conceding favors and giving gifts. Personal diplomacy is complemented with “official visit diplomacy” which can be understood as “generous invitations from relevant individuals to know from first-hand Taiwan.” (Rodriguez, 2013, p. 519). It is because of this visit diplomacy and personal diplomacy that Taiwan has been able to create a pool of politicians that are in favor of keeping Taiwan’s recognition. Government. 16.

(24) officials received a special treatment that they wouldn’t have received elsewhere (Aguilera Peralta, 2006). Aguilera Peralta (2006) described “Taiwan’s embassies are very efficient in public relations and they have developed a broad program of visits to the island, held for many decades.” Articles written in 1990 in Taiwan mentioned constant visit of government officials to Taiwan in “observation tours”. Aguilera, (2006) concluded that as result many Central American political elites have visited Taiwan and they’ve received a warm welcoming. “Visit diplomacy” has developed positive attitudes regarding Taiwan’s recognition and foreign aid. Development Cooperation. 治政大 went as far as calling it “the continued to recognize Taiwan. Aguilera Peralta (2006) 立 main element [of Taiwan’s cooperation] is bilateral and multilateral cooperation”. Development cooperation is a crucial reason why Central America nations. ‧ 國. 學. (p.173). Taiwan’s foreign aid assisted Central American nations in infrastructure, development and emergency assistance.. ‧. Rodriguez (2013) explained his theory on why most of less developed Central America countries recognize Taiwan with the exception of Costa Rica. He claimed that. Nat. sit. y. more developed countries will favor the recognition of Beijing but less developed. er. io. countries will favor Taiwan due to its development cooperation programs and technical assistance. In contrast to Aguilera Peralta (2006), Rodriguez (2013) didn’t believe that. n. al. Ch. i n U. v. is necessarily that Central American nations prefer Taiwan per se. He claimed “it is not. engchi. that these countries necessarily prefer the cooperation of Taiwan or China. China’s aid is of bigger quantity while the Taiwanese focuses on Central America, has more experience on the region and can be carried out without any type of limitation from the United States” (p.522). Rodriguez (2013) believed that it was due to development cooperation in the region that Ortega didn’t change recognition to China when he was re-elected again in 2007. Commerce and Investment Activities Commerce and investment activities is a debatable reason, Aguilera Peralta (2006) believed trade deficiency between Central America and Taiwan is Taiwan’s “Achilles heel”. Nonetheless, Taiwan has always found ways to counteract this problem. For example, establishing Republic of China-Central America Economic. 17.

(25) Development Fund(ROC-CAEDF) in 1998 and the Central America Trade Office (CATO) in Taipei. Other authors agreed that a reason for switching recognition is because the Chinese market provides more opportunities of increasing national production. Rodriguez (2013) argued that Costa Rica switched from Taipei to Beijing because China opened up a giant market of opportunities. When Costa Rica switched recognition, it was the only nation in Central America that was already exporting to China. Contrary to Costa Rica, other Central American nations exports to China were minuscule (Pintor Pirzkall, 2016). Please take a look at the figure 2.1 from Pintor Prizkall (2016), by 2011 exports from Nicaragua, El Salvador, Guatemala and Panama to China were inconsequential. Costa Rica and Honduras were the only Central. 政治大. American nations exporting to China. Exports. 立. Imports. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. i n U. v. Rest of Asia. engchi. Figure 2.1 Latin America and the Caribbean trade with China and Asia-Pacific, 2011 Source: Data as a percentage of total imports and Exports from each country, Pintor Prizkall (2016, p.5).. Participation in the Regional Integration Process According to Aguilera Peralta (2006), another important reason is Taiwan’s presence in the Central American integration process. Taiwan is an external observer for the SICA since 2002. It was the donor for the new SICA building in San Salvador (Esposito, 2016). On the financial side of the integration process, Taiwan is also a member of the CABEI. By 2014, Taiwan was the biggest source of finance from all of the extra regional members, it had provided a total US$500 million (Esposito, 2016).. 18.

(26) Furthermore, since 1999 biannual meetings are held between Central America and Dominical Republic top government officials and the Taiwanese government. The location of the meeting alternates every time between participant nations (Aguilera Peralta, 2006). These meetings help confirm the cooperation and friendship bonds between Taiwan and Central American and Dominican allies (Esposito, 2016). Taiwan’s Aid Categories Aguilera Peralta (2006) stated Taiwan’s aid can be divided into: refundable, non-refundable and technical cooperation. Refundable aid included: long term loans with a low interest rate. Non-refundable aid was used for specific requirements of the government or infrastructure projects and for humanitarian assistance. Aguilar (2014). 治政 the Central Region and it has seen an increased in大 Central America since Costa Rica 立 switched recognition to Beijing. While, technical cooperation included development. argued that Taiwan used its non-refundable assistance to counteract China’s effect in. ‧ 國. 學. projects ranging from agricultural to development of small and medium enterprise, information technology, improving infrastructure and sending overseas volunteers. As. ‧. part of their technical cooperation, Taiwan sends experts overseas to assist development projects. One last aspect of Taiwan’s aid was a non-transparent element. This “non-. Nat. sit. y. transparent feature of the cooperation is the distribution of funds to political campaigns. er. io. or for the use of the funds based on the president or head of states discretion.” (Aguilera Peralta, 2006, p. 175). . al. n. China’s Appeal. Ch. engchi. i n U. v. One of the disadvantages of recognizing Taiwan, is that it doesn’t allow for China’s recognition (Aguilera Peralta, 2006). China is attractive because of the bigger quantity of foreign aid (Rodriguez, 2013), investment and bigger market opportunities (Soto Acosta & Morales Camacho, 2015). Costa Rican author Morales Camacho & Soto Acosta, 2015 claimed that Central American nations (with the exception of Costa Rica) haven’t been able to see China’s importance as a commercial and political partner due “big amount of money they receive from Taiwan (in dubious process and under strict secrecy)” (Ruiz, as in Soto Acosta,2015, p.79). Morales Camacho & Soto Acosta (2015) stated that China is interested in investing in Latin American nations. Mostly in the telecommunications and logistic construction sector with phone companies such as Huawei and ZTE. 19.

(27) corporation. In infrastructure and logistic construction is interested in the Nicaraguan Canal, whose rights of planning, designing, constructing and then managing rights have been given to the Hong Kong Nicaragua Canal Development (HKND) group. Morales Camacho & Soto Acosta (2015) believed that Costa Rica is a key country for the penetration of China in the Central America region. Pintor Pirzkall (2016) disagreed with Morales Camacho & Soto Acosta (2015). Pintor Prizkarll (2016) claimed China’s “investment and cooperation are focalized only in specific countries, there’s no global strategy for the whole continent” (p.5). China is interested in Mexico’s resources and those of South American countries. Central America doesn’t have the resources that China needs. China uses its cooperation projects “not for altruism but the contrary, they are a strategy to expand its commercial. 政治大. relations and specific interest in exploiting the vast natural resources of the region, that. 立. are indispensable for its own economic development” (Pintor Pirzkall, 2016, 9).. ‧ 國. 學. Following this idea, Aguilera Peralta (2006) claimed that the Central American market and exporting capabilities are too small for the demands of giant Chinese market. For. ‧. Central America “to change recognition to China it would allow the development of commercial relations with the Asian giant. However, it’s not clear how much it would. sit. y. Nat. benefit the economies in the region, it’s believed that exporting side could find market niches in China, especially for coffee and sugar” (Aguilera Peralta, 2006, p.179). The. io. al. n. Taiwan.. er. same Niche markets that in the last few years have also seen an increased in trade with. Ch. engchi. i n U. v. There is some risk for Taiwan as China penetrates more Central America. Esposito (2016) claimed that after the Nicaraguan canal is built, Nicaragua would lose part of sovereignty and China might be able to enter the region. “Taiwan’s relations with nations that belong to SICA will slowly become weaker as the political and economic consolidation of China in Latin America” (p.92). Taiwan’s aid results In spite of the international community focus on Taiwan’s foreign policy and use of controversial tools, most Central American nations considered Taiwan’s assistance as favorable. Aguilera Peralta (2006) with his vast experience as Guatemalan Vice Minister of Foreign Affairs claimed that “Taiwan’s aid even if it doesn’t have the magnitude of big donor, the conditions which is carried out is very favorable” (p.173). He believed that Taiwan’s success depended on the development cooperation, creation 20.

(28) of personal relations with politicians and the civil society, as well as, aiding the Central American integration process. In the author’s opinion, the biggest challenge Taiwan faced is its commercial activities as they have not reached the expected results. Taiwan’s aid has also been effective in keeping China out of region. According Aguilar (2014) “is possible to consider that Taiwan’s influence diminishes China’s influence, even though Central American nations see no problem with keeping diplomatic relations with Taiwan and carrying out commercial activities with China” (p.266). On the other hand, Rodriguez (2013) concluded Central American nations decision of recognizing Taiwan or China is based mostly on the development of the nation. More developed economies will take advantage of China’s economic and diplomatic opportunities. While, least developed nations will favor Taiwan’s. 政治大. development cooperation. From these perspectives, we can conclude that most of. 立. Spanish-speaking scholars claim that Taiwan’s development cooperation has been. ‧. ‧ 國. 學. io. sit. y. Nat. n. al. er. effective. . Ch. engchi. 21. i n U. v.

(29) . CHAPTER 3 REVIEWING TAIWAN’S AID This section provides an overview of Taiwan’s total foreign aid, Taiwan ICDF strategies, categories of aid, expenditures per category and aid distribution. Followed by the last section Taiwan ICDF strategies in Central America from 1998 until 2015.. 3.1 Taiwan’s ODA Since 2012, Taiwan’s ODA is available on Taiwan’s Statistical Data Book. Before that year, Taiwan’s Statistical Data Book did not include ODA and it was not declared or mentioned on most of Taiwan ICDF reports. Data for Taiwan’s ODA before. 政治大 1959.The data currently available is only a general number, no details on the amount 立 given per region is available. 1989 is not available at all, nonetheless Taiwan started providing foreign aid since. ‧ 國. 學. From Figure 3.1, we can see that from 2002 to 2008 there was an increase of foreign aid expenditure from US$285 million to US$430million. Nonetheless, from. ‧. 2008 Taiwan’s ODA has seen a decline. During president Ma ODA went down almost. sit. Nat. or less stable oscillating around US$270 million per year.. y. a 40% to US$278 million in 2015. From 2013-2015 ODA seemed to have been more. er. io. Taiwan’s annual ODA is small in comparison to big donors (Aguilera, 2006).. al. Taiwan aid is much less than South Korea’s foreign aid which in 2015 had an ODA of. n. v i n US$1.91billion (OECD data). If compared with DAC countries, the amount given of Ch U i e h n c g Taiwan aid is comparable to Luxemburg and if it was part of DAC countries it would be one of the smallest donors of aid when measured as US million.. 22.

(30) 500 450 400 350 300 250 200 150 100 50 0 2000. 2002. 2004. 2006. 2008. 2010. 2012. 2014. 2016. ODA(US$million) Figure 3.1. Taiwan's ODA 2008-2015. 立. 政治大. Source: Taiwan’s Statistical Book Data and Taiwan ICDF 2002 report.. ‧ 國. 學. Taiwan’s classification of aid as per Taiwan ICDF annual reports differs from that used by the OECD. However, on this section we will explain Taiwan’s distribution. ‧. of aid according to OECD. On figure 3.2, we can see that the sector that received the. y. Nat. most aid was social infrastructure and services. Social Infrastructure and services from. n. al. This sector includes education,. er. io. 2015 it received more than 55% of total aid.. sit. 2009-2015 on average received 44% of its total aid. Although some years as 2013 and. i n U. v. government and civil society, health and medical, water supply and sanitation and other social infrastructures.. Ch. engchi. The second sector was economic infrastructure and services which in the past 7 years received on average 19% of total aid. This sector includes fields such as: transportation and storage, communications, energy generation and supply and other. Followed by others that received on average 17% of Taiwan’s total aid. The industries or projects included in others are unknown to this researcher. On the fourth position is production that received on average 17% of Taiwan’s ODA. The subfields that are included in this sector are: agricultural, forestry and fishery, industry, mining and construction, trade policy and regulation and tourism. Agriculture was Taiwan’s main aid objective from the start of its aid program but throughout the years it diversified into other sectors, such as: building social. 23.

(31) infrastructure and services. However, it continues to be an important aspects of Taiwan’s technical cooperation. 120.0% 100.0% 80.0% 60.0% 40.0% 20.0%. 30.3%. 18.5% 2.4%. 3.2% 16.2%. 21.1%. 23.7%. 20.3% 4.2% 15.8%. 16.9%. 19.3%. 20.4%. 30.4%. 38.5%. 40.4%. 37.1%. 2009. 2010. 2011. 2012. 19.8%. 5.2% 16.4%. 11.7% 1.4% 14.8%. 5.4% 2.0% 14.7%. 15.2%. 32.1%. 56.9%. 45.9%. 16.3% 2.5% 14.6% 10.9%. 55.6%. 0.0%. Social Infrastucture and Services Production Sector others. 立. 2013. 2014. 2015. Economic Infrastructure and services. 政治大. Sustainable Development. Figure 3.2. Taiwan's ODA distribution per sector 2009 to 2015. 3.2 Overview of Taiwan ICDF Strategies. ‧. ‧ 國. 學. Source: Taiwan’s Statistical Book Data. y. Nat. Taiwan ICDF was created in 1996. This new entity under the administration of. sit. MOFA consolidated the activities of CITC and IECDF. Taiwan ICDF initial fund was. er. io. of NT$11.6 billion, the balance of IECDF. All the data included on this section was. al. n. v i n C hof funding: 1) its own Taiwan ICDF had two sources e n g c h i U capital resources, which uses for obtained from Taiwan ICDF annual reports from 1998 to 2015. Since its creation. technical assistance, investment and lending and education and training program and. 2) resources allocated by MOFA which uses to manage MOFA’s overseas technical missions (ICDF, 1999). According to the Taiwan ICDF 2000 annual report, Taiwan ICDF is “the Republic of China’s primary body of overseeing foreign assistance” (p.13). The mission of this institution is to strengthen and enhance the foreign relations of Taiwan with its allies and friendly nations through providing assistance in economic and social development. In 1998 Taiwan ICDF general strategy was fairly broad “alleviating poverty in developing nations.” (Taiwan ICDF, 1998, p.13). However, as time passed by the strategies have become more specific and organized. In 2014, the strategy greatly shifted to “Taiwan ICDF has formulated two core strategies for carrying out its aid. 24.

(32) work: 1) Respond to international development trends, drawing on Taiwan’s comparative advantages; and 2) integrate public and private sector resources, and strengthen cooperative partnerships” (Taiwan ICDF, 2014, p. 11). Strategies 1998-2003 Starting in 1998, Taiwan ICDF’s general strategy was to diminish poverty. The methodology used was a mixture of technical assistance and lending and investment projects. Focusing on the industries of agriculture and fisheries. Starting from 1999 annual reports, trade and investment are included as part of foreign aid. After El Salvador’s earthquake in 2001, humanitarian aid was included in Taiwan ICDF’s annual reports as part of Taiwan’s foreign aid. Taiwan ICDF considered this type of aid. 治政大 and for humanitarian causes projects but because it is important to development 立 (Taiwan ICDF, 2001). In 2003, Taiwan’s strategy continued to be diminishing poverty. to be one important aspect Taiwan’s aid, not because of the amount given to those. ‧ 國. 學. through development assistance and while promoting “people’s diplomacy”. “People diplomacy” “unites the power of public and private sectors” (Taiwan ICDF, 2003, Taiwanese enterprise to invest in Taiwan’s allies’.. Nat. sit. y. Strategies 2004-2009. ‧. p.10). It was this year that funds were created jointly between Taiwan ICDF and private. er. io. In the year 2004, Taiwan ICDF put more focus on “people’s democracy” whose. al. v i n C hand non-government resources of the government e n g c h i U sector in undertaking foreign assistance” (Taiwan ICDF, 2004, p.15). That same year, Taiwan started to include the n. goal was “to mobilize the public to participate in international affairs and to combine. Information Technology (IT) sector as part of its foreign aid industries, to “reduce the international digital divide” (Taiwan ICDF, 2004.p.15). Taiwan’s IT competitive advantage, provided Taiwan with opportunities to increase its interaction in the international arena. An advancement was made in 2006, when Taiwan carried out the APEC Digital Opportunity Center (ADOC) project which assisted APEC member nations in creating opportunities in the Information and communications technologies and establishing information economies. As well as an attempt to obtain membership in the World Health Organization(WHO) Taiwan started to have more projects on medical and public health, and also included those industries as part of Taiwan’s target industry. On the other hand, it continued with the projects on small and medium. 25.

(33) enterprise (SME) development, the agricultural sector, education and human resources. From this period on, Taiwan aid expanded not only in target sectors but also by encouraging the public to participate in foreign aid activities. In 2007, Taiwan started incorporating the international community development assistance goals as their own. From then on, Taiwan ICDF strategies followed international trends and at the same time made use of Taiwan’s competitive advantage. As the international community began to include environmental protection and the promotion of renewable energy as their goals. Taiwan also included this new sector as an operational priority. By 2009 there was no more mentioning of ‘people’s diplomacy’ and Taiwan ICDF strategy shifted from only reducing poverty to including many other sectors. Its. 政治大. strategy in 2009 was “reducing poverty, maintaining food security, responding to. 立. climate change, supporting environmentally friendly and sustainable development; and. ‧ 國. 學. promoting balanced development throughout the global community” (Taiwan ICDF, 2009, p.10). Taiwan ICDF technical cooperation shifted from only providing assistance. ‧. in production to help them transition to export-oriented agribusiness. This institution also followed international organization’s trend to put more emphasis aid for trade.. sit. y. Nat. Strategies 2010-2015. er. io. The year 2010 marked the establishment of guidelines for Taiwan’s foreign aid. Starting from May, 2009 when the first MOFA white paper was published, whose. n. al. Ch. i n U. v. objective was “establishing a legal, transparent and professional system of foreign. engchi. aid…it lays out Taiwan’s core foreign aid policy” (Taiwan ICDF, 2012, p.5). Followed on June 15, 2010, with signing by president Ma Ying-Jeou, and Taiwan ICDF of the International Cooperation and Development Act, this documents defined “the content, objectives, and operating principles underpinning Taiwan’s international cooperation and development affairs” (Taiwan ICDF, 2012, p.5). In 2010, Taiwan ICDF strategy continued to be to follow the international community objectives, which in this case were the Millennium Development Goals(MDGs) and to strengthen the cooperation with international organizations. Some of the international organization that Taiwan had been working with so far included: CABEI, European Bank for Reconstruction and Development and the Inter-American Development Bank(IDB) and its Multilateral Investment Fund(MIF). From here on, Taiwan replaced short term projects with only long-term projects that range from 4 to 26.

(34) 6 years. However, this fact is contradicted by Dr. Kung who stated that before 2011 Taiwan ICDF projects in Latin America were carried out for a long term without a real definite objective. Technicians would stay a long time in a country (For more details please refer to appendix L). In 2010, Taiwan started to work on what they called the “new era of diplomacy through technology” (Taiwan ICDF, 2010, chapter 1) Taiwan started providing access to satellite images to partner countries to monitor environment conditions, land use, natural disasters etc. In 2011, Taiwan ICDF included as part of its strategy to be more project oriented by integrating various types of aid for the same projects such as: providing financial aid with technical assistance and education or vocational training. Priority was given to 3 sectors: agriculture, Information and Communication. 政治大. Technology(ICT) complimented with vocational training.. 立. Transparency became an important topic during 2010 and 2011. In 2011,. ‧ 國. 學. Taiwan ICDF annual reports stated “We are also making more and more information public, to generate more sources of resources and cooperation” (Taiwan ICDF, 2011,. ‧. p.9).. In 2012, Taiwan ICDF in addition to the traditional bilateral and multilateral. sit. y. Nat. assistance it incorporated triangular cooperation which includes the private sector and non-profit organizations. This strategy is an attempt to diversify and increase Taiwan’s. io. n. al. er. international aid programs in the international community. As the MDG were. i n U. v. approaching its deadline, Taiwan adopted the new vision of becoming the best partner. Ch. engchi. for sustainable development by 2022. To accomplish this, it provided assistance in 5 operative priorities: agriculture, public health, education, ICT and environmental protection. Taiwan, following the international organizations objectives, adopted the Sustainable Development Goals (SDGs) in 2014. The 3 key areas of SDGs are: diminishing inequality, guaranteeing prosperity for women, youth and minorities and to protect the environment. Taiwan has followed SDGs goals, but only on the areas that they have competitive advantage (those are the operative priorities mentioned in the paragraph above). An important revision was made on Taiwan ICDF education sector, in which Taiwan ICDF stated that education has changed from being elite-centered capacity to universal education, “human resource training programs focused on “capacity building for elite” that targeted government officials, professionals or 27.