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薩爾瓦多-台灣與哥斯大黎加-中國的關係模式之比較研究 2000-2012 - 政大學術集成

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(1)International Master’s Program in International Studies 國際研究英語碩士學位學程碩士班. National Chengchi University 國立政治大學. 立. 政 治 大 碩士論文. Master’s Thesis. ‧ 國. 學. ‧. COMPARATIVE STUDY OF THE RELATIONS BETWEEN EL SALVADOR-TAIWAN (ROC) AND COSTA RICA-CHINA (PRC) 2000-2012 薩爾瓦多-台灣與哥斯大黎加-中國的關係模式之比較研究 2000-2012. er. io. sit. y. Nat. al. n. iv. Student: Gracia n Moran C h Ivonne Bonilla U i e柏伊帆 ngch Advisor: Dr. Roberto P. Chyou Ren-rang 邱稔壤博士. July 2014.

(2) ACKNOWLEDGEMENTS. I would like to express my gratitude to Taiwan ICDF for granting me a Scholarship and giving me the opportunity to come to this beautiful country to study in one of its best universities. I want to thank to my advisor Dr. Roberto P. Chyou Ren-rang for his guidance, advice, support and encourage me always to work hard. Similarly, I want to thank to Fabricio Fonseca and Juan Uriburu for their support and. 治 政 Finally, I want to thank to my family and friends 大 who were always supporting and 立 encouraging me to do my best in my studies. sharing with me their knowledge which helped me to achieve the goals of the thesis.. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. i.

(3) ABSTRACT. Since 1949 that China became People’s Republic of China (PRC) and Taiwan, Republic of China in Taiwan (ROC), PRC claims “Only One China” and ROC claims to be recognized by the United Nations. Thus far Taiwan is officially recognized by 22 countries, one of them is El Salvador which is in Central America. Costa Rica, from the same sub-region, was an important ally of Taiwan until 2007 that shifted diplomatic relations with China. While Taiwan's. 治 政 China’s cooperation is for isolating Taiwan, it has a little大 variety, short term and has much 立 funding than Taiwan’s. On the other hand, since China is acquiring more relevance globally, development cooperation is for gaining more international space, it is diverse and long term;. ‧ 國. 學. many countries prefer to set up official ties with China instead of Taiwan; and this was one of. ‧. the reasons why Costa Rica preferred to shift diplomatic ties.. y. Nat. n. al. er. io. sit. Key words: China, Taiwan, Costa Rica, El Salvador, development cooperation.. Ch. engchi. i n U. v. ii.

(4) TABLE OF CONTENTS. Acknowledgements ……………………………………………………………………………..…i Abstract …………………………………………………………………………………………...ii Glossary of Terms and Acronyms ………………....................…………………………………..1 Chapter 1: Introduction ……..…………………………………………………………………….4 1.1 Brief History about the Republic of China (1985-2013) ……………………………………..4 1.2 Statement of the Research Question ………………………………………………………...11 1.2.1. 學. ‧ 國. 1.2.2. 治 政 大 Objective ...………………………………………………………………………………13 立 Justification ……………………………………………………………………………...13. 1.2.3 Variables ………………………………………………………………………………...13. ‧. 1.3 Literature Review ………………………………………...…………………………………14 1.4 Methodology ……………………………………………………………………………...…17. y. Nat. io. sit. Chapter 2: International Cooperation in El Salvador. Cases of the International Cooperation. n. al. er. Received from United States and Venezuela …….……………………………………………...19. Ch. i n U. v. 2.1 Introduction ………………………………………………………………………………….19. engchi. 2.2 Concept of International Cooperation (IC) ……...…………………………………………..19 2.2.1 North-South Cooperation (NSC) …………………………………...……………………..20 2.2.1.1. Characteristics of the North-South Cooperation …………………………………...22. 2.2.1.2. United States and El Salvador relations: Millennium Challenge Corporation. (MCC)…………………………………………………………………………………………....26 2.2.2 South-South Cooperation (SSC). Case of Venezuela and El Salvador relations ………….29 2.2.2.1 Characteristics of South-South Cooperation …………………………………………….32 2.2.2.2 Venezuela and El Salvador relations: ALBA Petroleos of El Salvador ………………...36 iii.

(5) Chapter 3: El Salvador-Republic of China (Taiwan) Relations ………………………..……….40 3.1 Introduction …………………………………………………………………………………40 3.2 Economic Overview of Both Countries ……………………………………………………..40 3.2.1 Republic of China (Taiwan) …………………………………………………...………….40 3.2.1.1 Commercial Environment ……………………………………………………………….41 3.2.2 Republic of El Salvador …………………………………………………………………...43 3.3 Cooperation and Economic Relations between Taiwan and Central American Countries …44 3.3.1 Bilateral Trade between ROC and Central America ………………………………...……47. 治 政 大El Salvador …………………...53 3.4 Cooperation and Economic Relations between Taiwan and 立 3.4.1 Development Aid from ROC to El Salvador ……………………………………………...56 ‧ 國. 學. 3.4.2 Bilateral Investment and Trade ……………………………………………………………61 El Salvador-Taiwan Free Trade Agreement and its benefits ………………………62. ‧. 3.4.2.1. Chapter 4: Costa Rica – People’s Republic of China Relations………………….……………...65. y. Nat. io. sit. 4.1 Introduction …………………………………………………………………………………65. n. al. er. 4.2 Economic Overview of Both Countries …………………………………………………….65. Ch. i n U. v. 4.2.1 People’s Republic of China ……………………………………………………………….65. engchi. 4.2.2 Republic of Costa Rica ……………………………………………………………………66 4.3 Cooperation and Economic Relations between China and Latin America ………………….68 4.4 Overview of Costa Rica-Taiwan relations until the shift of diplomatic relations …………..76 4.4.1 The Shift of Diplomatic Ties ……………………………………………………………...77 4.5 Cooperation and Economic Relations between China and Costa Rica ……………………..78 4.5.1 Development Aid from PRC to Costa Rica ……………………………………………….79 Chapter 5: Comparative Analysis of the Relations between El Salvador-Taiwan and Costa RicaChina …………………………………………………………………………………………….84 iv.

(6) 5.1 Introduction …………………………………………………………………………………84 5.2 Comparative study …………………………………………………………………………..84 5.3 Challenges and Opportunities ……………………………………………………………….92 Chapter 6: Conclusions and Suggestions………………………………………………………...94 References…….…………………………………………………………………..……………...97 References in English ……………………………………………………………….…………..97 References in Spanish ………………………………………………………………………….104 Appendix I ……………………………………………………………………………………..112. 治 政 大 Appendix II ……………………………………………………………………………….........113 立 Appendix III ……………………………………………………………………………………117 ‧ 國. 學. Appendix IV …………………………………………...………………………………………122. ‧. List of Tables and Figures. y. Nat. io. sit. Table 1.1: Important Diplomatic events occurred in PRC and ROC from 1949 to 2013 ...………7. n. al. er. Table 1.2: PRC and ROC: Diplomatic Relations in Latin America and the Caribbean ..……….11. Ch. i n U. v. Table 2.1: Development aid and Military expenses in northern countries. Distribution of. engchi. government expenditure, 2003 (%) (OECD-DAC member countries) ……………………...….23 Table 2.2: Examples of the regional cooperation initiatives in Africa, Asia and Latin America..33 Table 3.1: Completed projects implemented in El Salvador and in Central America, financed by Taiwan ICDF partially and completely (in US$) ………………………………………………..48 Table 3.2: ROC’s Major Trading Partners and Central American countries, 2012...……………52 Table 3.3: Major Trading Partners of Central American Countries, 2012 ……..………………52 Table 3.4: SICA countries and Trade Balance ROC (Taiwan), 2000-2012 ……………….……54. v.

(7) Table 3.5: Agreements between the governments of ROC and El Salvador ……………………55 Table 3.6 Bilateral Aid received from June 2004 to March 2005 by Asian countries and other main donors………………………………………………………………………………………59 Table 3.7: Comparison of the Development Aid Received……………………………………...59 Table 3.8: Detail of the Development aid received by ROC in 2009-2010………….…….…….60 Table 4.1: Latin America: China’s Rank as a Trading Partner for Selected Countries, 2000 and 2008 ……………………………………………………………………………………………..74. 治 政 大 America …………………………………………………………………………………………75 立 Figure 4.1: Trade between Costa Rica and PRC, 2001-2012………………..……………….….78 Table 4.2: Selected PRC Aid and Investment Projects in 2008 (Announced or Begun) in Latin. ‧ 國. 學. Table 4.3: Costa Rican Bilateral Cooperation 2006-2008 ………………………………………81. ‧. Table 4.3: Types of Bilateral Cooperation received by Costa Rica 2006-2008 ………………...81 Figure 5.1: Net ODA in 2011 from OECD-DAC member countries (as a percentage of GNI)...85. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. vi.

(8) GLOSSARY OF TERMS AND ACRONYMS. ALBA: Bolivarian Alliance for the Peoples of Our America ALBA Petroleos de El Salvador S.E.M de C.V.: Alba Petroleos of El Salvador Corporation by Shares Mixed Economy and Variable Capital ANN: National Assembly of the Republic of Nicaragua APP: Public Private Partnerships APEC: Asia-Pacific Economic Cooperation. 政 治 大. CABEI: Central American Bank for Economic Integration. 立. CAFTA-DR: Dominican Republic-Central America-United States Free Trade Agreement. ‧ 國. 學. CATO: Central America Trade Office CCP: Chinese Communist Party. ‧. CECC: Central American Educative and Cultural Coordination. y. Nat. io. sit. CEDUCAR: Educative Community of Central America and Dominican Replublic. n. al. er. CIA: Central Intelligence Agency. Ch. i n U. v. CONAMYPE: National Commission for Micro and Small Business CSJ: Supreme Court of Justice. engchi. DAC: Development Assistance Committee of the OECD DAPP: Direction of Public Private Partnership ENEPASA: Energy Inter-municipal Association for El Salvador ECFA: Economic Cooperation Framework Agreement ECLAC: Economic Commission for Latin America and the Caribbean China EXIM Bank: Export-Import Bank of China EU: European Union 1.

(9) FDI: Foreign Direct Investment FTA: Free Trade Agreement GDP: Gross Domestic Product GNI: Gross National Income GOES: Government of El Salvador HDI: Human Development Index IC: International Cooperation. 治 政 大 ICDF: International Cooperation and Development Fund 立 IDB: Inter-American Development Bank ICD: International Cooperation for Development. KMT: Kuomintang. MCC: Millennium Challenge Corporation United States of America. Nat. y. ‧. ‧ 國. 學. IMF: International Monetary Fund. er. io. sit. MDGs: Millennium Development Goals. MIDEPLAN: Ministry of National Planning and Economical Politics. n. al. Ch. i n U. v. MOFA: Ministry of Foreign Affairs of Republic of China (Taiwan). engchi. MOFCOM: Ministry of Commerce of People’s Republic of China M&E: Monitoring and Evaluation MT: Metric tone NRA: National Revolutionary Army NGO: Non-governmental Organization NSC: North-South Cooperation OAS: Organization of American States ODA: Official Development Assistance 2.

(10) OOF: Other Official Flows OECD: Organization for Economic Cooperation and Development OOF: Other Official Flows PRC: People’s Republic of China or China PROCOMER: Foreign Trade Promoter in Costa Rica Proesa: Agency for Promotion of Exports and Investments of El Salvador RECOPE: Costa Rican Oil Refinery. 治 政 大 RREE: Ministry of Foreign Affairs of El Salvador 立 SICA: Central American Integration System ROC: Republic of China or Taiwan. ‧ 國. 學. SIECA: Secretariat for Central American Economic Integration. ‧. SICE: Foreign Trade Information System SSC: South-South Cooperation. y. Nat. n. al. er. io. TC: Technical Cooperation. sit. TA: Technical Assistance. Ch. UNDP: United Nations Development Programme. engchi. i n U. v. UNOCHA: United Nations Office for the Coordination of Humanitarian Affairs UN: United Nations USTR: Office of the United States Trade Representative WHO: World Health Organization WTO: World Trade Organization. 3.

(11) Chapter 1: INTRODUCTION. For a better understanding and analysis of this topic, it is important to know first the context through an overview of the history of the relations between China and Taiwan, and their relations with Latin America. Therefore, this chapter introduces the research question and hypothesis, objective, methodology and literature review.. 1.1 Brief History about the Republic of China (1985-2013). 治 政 On January 1 1912, the foundation of the Republic 大of China (ROC) put an end to 立 approximately 2,050 years of imperial rule in China, and more than 250 years of the Manchu st. ‧ 國. 學. Qing Dynasty. Meanwhile, Taiwan had been ceded to Japanese control in 1895 after military. ‧. defeat. The foundation of the ROC was led by Sun Yat-Sen, an activist who became famous among Chinese diaspora and students abroad. His political philosophy was based on the Three. y. Nat. io. sit. Principles of the People: “Nationalism, Democracy, and People’s livelihood” (Fairbank, 1996).. n. al. er. The starting point of the movement for the foundation of the ROC began with the. Ch. i n U. v. revolution of Wuchang, in Hubei Province, on 10th October 1911. This revolutionary. engchi. insurrection was known as the Wuchang Uprising. After this uprising, it emerged the Republic of China on January 1st 1912, and later in the same year Sun Yat-Sen was elected as the first Provisional President. In August 1912, one of Sun Yat-Sen’s associates named Song Jiaoren, founded the Kuomintang (Nationalist Party), which was composed by an amalgamation of small political groups, including Sun Yat-Sen’s revolutionary group, Tongmenghui (Fairbank, 1996). In 1913, Yuan Shikai, a high military official from the Qing Dynasty, pushed Sun Yat-Sen to resign and withdraw from the political spotlight. Sun Yat-Sen returned to politics in the south of China by 1921. On May 4th 1919, 3,000 students from Beijing University congregated in 4.

(12) Tiananmen Square to protest against the Treaty of Versailles, signed at the end of World War I. They argued that this treaty did nothing to stop Japanese hostility in China or the system of inequality or unequal treaties. This movement was called “May 4th Movement”. In 1921, the Chinese Communist Party (CCP) was founded by Chen Duxiu, one of the student leaders from the “May 4th Movement” (Fairbank, 1996). In the early 1920s, in order to achieve the end of Japanese aggression, the two ideologically different parties, CCP and the Kuomintang (KMT) united forces and became the. 治 政 大 warlords. The movement was launched the Northern Expedition to defeat the remaining Japanese 立 a success. Chiang Kai-Shek, a staunch anti-Communist military commander, succeeded Sun YatFirst United Front which integrated the National Revolutionary Army (NRA). In 1926, the NRA. ‧ 國. 學. Sen in 1925 as head of the KMT (Fairbank, 1996).. ‧. By April 1927, Chiang Kai Shek's forces attacked the city of Shanghai where there were communist workers clandestinely organized by the CCP. Thousands of communists were. y. Nat. er. io. sit. massacred, eliminating the majority of the original communist party founders. Thereby Chiang Kai-Shek declared himself head of the new national government in 1928. His government was a. n. al. Ch. i n U. v. military dictatorship with only a small popular power base. In 1934, Chiang Kai-Shek organized. engchi. his last persecution against the Red Army. He bordered their base in Jiangxi province with 500,000 troops, concrete and barbed wire. In front of such vastly superior numbers of soldiers and armament, Mao Zedong organized the retreat known later as the “Long March”: the yearlong 9,500 km trek across some of China's mountains caused the death of around 60,000 people, mainly due to starvation, cold weather and warfare (Fairbank, 1996). Mao Zedong became the head of the party by 1935, when the Communists reached their new base at Yan’an, in northern Shanxi province. While Chiang Kai-Shek's troops were chasing after the Red Army, Japanese forces invaded Manchuria and once they expelled the Chinese 5.

(13) troops (1932), they set up a puppet state named 'Manchukuo' and installed Puyi, the last emperor of the Qing Dynasty, as a figurehead (Lozano, 2004). The Japanese invasion in China was extremely sanguinary. The most brutal incident was the Nanjing Massacre in 1937, in which, according to some versions, more than 20,000 women were raped and around 300,000 civilians were killed. However, despite these atrocities, Japanese people made huge inroads into China, as they had done before in Taiwan; like the development of industry and agriculture in Manchukuo, the establishment of an educational system, and the construction of a wide system of railroads. 治 政 大 in China and relinquished With the end of World War II in 1945, Japanese surrendered 立 the control of Taiwan to the Chinese Nationalists. On February 28 , 1947, there was an antiand roads (Viklund, 2005).. th. ‧ 國. 學. government uprising in Taiwan known as “228 Incident,” which was violently suppressed by the. ‧. KMT-led ROC government and which resulted in the massacre of approximately 18,000 to 28,000, or more civilians (Tsuilien, 2011). The incident marked the beginning of the. y. Nat. er. io. sit. Kuomintang's White Terror period in Taiwan, in which thousands or more inhabitants vanished, died, or were imprisoned. This incident marked the start of the post-war movement for Taiwan. al. n independence (Tsuilien, 2011).. Ch. engchi. i n U. v. Despite the fact that the CCP was technologically less equipped than their opponents, they achieved success in the battles against the corrupt KMT. In 1948, Red Army forces began their final assault against the KMT. In 1949, just before the liberation of Shanghai by the Communists, Chiang Kai-Shek, along with many of the KMT top leaders, withdrew to Taiwan. Meanwhile, on October 1st, 1949, in the platform of Tiananmen Gate, Beijing, Mao Zedong announced the foundation of the People's Republic of China (PRC) (Fairbank, 1996). After this announcement, there were other relevant events which circumscribed the evolution of both PRC and ROC in the political and economic arena, marked by their diplomatic 6.

(14) competition and progressively approach to Latin America. In the following table there is a chronology of the most important diplomatic events occurred since 1949 to 2013.. Table 1.1: Important Diplomatic events occurred in PRC and ROC from 1949 to 2013 People’s Republic of China (PRC) Paramount Leader. 1949. Event. President. Event. Founding of People's Republic of China. Li Tsung-jen (李宗仁). White Terror. 政 治 大 Founding of the Mexican Society of 立 Friendship with China.. 學. ‧ 國. ‧. 1958. Second Taiwan Strait crisis.. Nat. al. Chiang Kaishek (蔣中正). n. 1960. io. Mao Zedong (毛澤東). Setting up of diplomatic relations with Cuba and the Sino-Latin America and Caribbean Friendship Association (CHILAC).. Ch. y. 1954. First Taiwan Strait Crisis/ U.S. Taiwan Mutual Defense Pact.. sit. 1953. er. Date. Republic of China (Taiwan). engchi. i n U. v. 1971. China joint the UN. Taiwan walked out from the UN.. 1972. Diplomatic relations with Japan were reestablished.. Rupture of Diplomatic relations with Japan. 1979. U.S. switched diplomatic recognition to Beijing.. Deng Xiaoping (鄧小平) 1981. Already had diplomatic relations with 15 Latin. Chiang Chingkuo (蔣經國). U.S. ended military alliance. Already had diplomatic relations with 11 Latin 7.

(15) American and Caribbean Countries. Establishment of Relations with Nicaragua until the rupture in 1990. Rupture of diplomatic relations with Nicaragua until the reestablishment in 1990.. 1989. 立. 1992. 政 治 大. ‧ 國. 學. ‧. (江澤民). y. sit. Setting up diplomatic relations with Saint Lucia. al. n. 1997. Third Taiwan Strait Crisis/ Establishment of the International Cooperation and Development Fund (Taiwan ICDF). Fusion with IECDF. (李登輝). io. Jiang Zemin. 1992 Consensus/ Joint to Central American Bank for Economic Integration.. Lee Teng-hui. Nat. 1996. Establishment of the International Economic Cooperation Development Fund (IECDF) with a total of NTD30 billion / Setting up of diplomatic relations with Belize. er. 1985. American Countries including Cuba.. Ch. engchi. i n U. v. 1999. Joint as an Observer of the Central American Parliament.. 2000. Joint as an Observer of the Central American Integration System Accession to World Trade Organization. 2001. (陳水扁) Accession to World Trade Organization.. 2002 2005. Chen Shui-bian. Hu Jintao Pan-Blue visits to mainland 8.

(16) China. (胡錦濤). Establishment of official relations with Costa Rica. 2007. 2008. 立. Diplomatic truce with PRC with the objective to protect the diplomatic relations that both countries have with others./ Cross-strait charter flights expanded to weekends./ Lien Chen & Hu Jintao at APEC1 Peru.. 政 治 大 Ma Ying-jeou. Agreement to allow crossstrait flights to become regularly scheduled instead of chartered.. (馬英九). ‧ 國. 學. 2009. y. sit. n. al. Rupture of diplomatic relations with The Gambia. er. io. (習近平). Sign of ECFA with China. Nat. Xi Jinping. ‧. Sign of the Economic Cooperation Framework Agreement (ECFA).. 2010. 2013. Rupture of the relations with Costa Rica/ Retake diplomatic relations with Saint Lucia. i n U. v. Source: Author’s compilation from Mario Rodríguez (2008): “La batalla diplomática de Beijing y Taipei en América Latina y el Caribe”; Maria Calello (2013): “Taiwan, China and Central American Allies: A Discourse Analysis of the Costa Rican Diplomatic Shift News Coverage”; Walter Chen (2009) “History of Taiwan”; John K. Fairbank (1996) , “China: A New History”.. Ch. engchi. After the government of the ROC was relocated in Taiwan in December 1949 (Tsang, 1993), Taipei used anticommunism as a vehicle to boost its international relations, which allowed it to establish ties with more than 50 countries – including Costa Rica (1940s) and El Salvador - in the 1950s, and to obtain a seat as a permanent member in the Security Council of the UN (Perez, 2004). 1. Asia-Pacific Economic Cooperation.. 9.

(17) In the 1960s, the island established diplomatic relations with over 20 countries (Perez, 2004) and its remarkable economic growth allowed the ROC to send agricultural, fisheries and technical missions to developing nations, including its Latin American allies. Meanwhile, Cuba was the first Latin American country to establish diplomatic relations with the People’s Republic of China in 1960, just after the Cuban Revolution had ended and Fidel Castro announced the establishment of a socialist regime. In the 1970s, the fact that Taiwan walked out from the UN (1971) triggered the rupture of diplomatic ties with Chile, Peru, Mexico, Ecuador, Argentina and. 治 政 大 countries are currently large markets in Latin America. 立 On the other hand, having joined the UN contributed to accelerate the development of. Jamaica in 1971 and 1972, and with Venezuela and Brazil in 1974 (Perez, 2004). Most of these. ‧ 國. 學. PRC-Latin America relations. Chile was the first country from South America to establish. ‧. official ties with the PRC in 1970. Later, ten Latin American and Caribbean countries set up diplomatic relations with China2. In the 1980s, the ROC launched a diplomatic offensive, aimed. y. Nat. io. sit. to halting the progressive influence of Beijing among the small newly independent countries.. n. al. er. Thus, the ROC managed to establish relations with six countries from the Caribbean sub-region3.. Ch. i n U. v. However, other Latin American countries (most of them being important markets in the sub-. engchi. region) cut ties with Taiwan and establish official diplomatic relations with mainland China4. In 1992, after the end of the Cold War, it was a new era for both relations: Taiwan-Latin America and China-Latin America. In the case of Taiwan, it had accumulated capital, technology and manufacturing power, and sought greater international recognition in exchange for economic. 2. Peru (1971), Mexico, Argentina, Guyana and Jamaica (1972), Trinidad and Tobago, Venezuela and Brazil (1974), Suriname (1976 ), Barbados (1977) (Perez, 2004) 3 St. Vincent and the Grenadines (1981), Dominica (1983), St. Kitts and Nevis (1983), St. Lucia (1984), Bahamas (1989) and Granada (1989) (Perez, 2004). 4 Colombia (1980); Bolivia (1985); Nicaragua (1985), this country reestablished diplomatic ties with Taiwan in 1990, and Uruguay (1988) (Perez, 2004).. 10.

(18) aid. Taiwan expanded its cooperation programs with its allies and agreed a strategic alliance with them during the First Meeting of Heads of State and Government of the Central American Isthmus, held in 1997 in El Salvador (Perez, 2004). In the table 1.2 is the list of Latin American countries that currently recognize China and Taiwan.. Table 1.2: PRC and ROC: Diplomatic Relations in Latin America and the Caribbean Latin America Caribbean North America Central America. and Countries Recognizing PRC. Countries Recognizing ROC. Mexico Costa Rica. Belize, El Salvador, Guatemala, 治 Nicaragua, Panama 政 大 Honduras, and Barbuda, Bahamas, Dominican Republic, Haiti, St.. Antigua Barbados, Cuba, Dominica, Kitts and Nevis, St. Lucia, St. Grenada, Jamaica, Trinidad and Vincent and the Grenadines Tobago Argentina, Bolivia, Brazil, Chile, Paraguay South America Colombia, Ecuador, Guyana, Peru, Uruguay, Suriname, Venezuela Source: Congressional Research Service (2008), “China’s Foreign Policy and ‘Soft Power’ in South America, Asia, and Africa”. Caribbean. 立. ‧. ‧ 國. 學. sit. y. Nat. io. al. er. In 2007 and 2013, Costa Rica and the Gambia respectively, severed their ties with Taiwan. In case of Costa Rica, it established diplomatic relations with China; however, it is still unclear. n. iv n C whether the Gambia will officially establish relations with the PRC, and what would h ediplomatic ngchi U that mean for the “diplomatic truce” between China and Taiwan, agreed in 2008.. 1.2 Statement of the Research Question Since the founding of the PRC in 1949, until Beijing's acceptance of the tacit "diplomatic truce" launched by Ma Ying-jeou during his inaugural speech on May 20th 2008, China and Taiwan have been involved in a fierce competition for international diplomatic recognition. Due to the ROC and PRC decision, regarding a One China Principle, it has not been feasible to. 11.

(19) maintain a policy of dual recognition; hence any state could not simultaneously have official relations with both. Starting from the 1980s, Latin America and the Caribbean have the world's largest concentration of states recognizing the ROC, accounting 12 out of the 22 countries that have diplomatic relations with Taiwan nowadays. Furthermore, these countries have supported most of the requests for the admission of Taiwan in the United Nations (UN) and the World Health Organization (WHO), and have allowed Taipei to use the Central American Isthmus as a bridge to the United States (Rodriguez, 2013).. 治 政 大ex-ally), and given the recurrent specifically to Central America through Costa Rica (Taiwanese 立 rivalry despite the "diplomatic truce" between China and Taiwan since 2008, as well as the last This is an important topic given the current approach of China to Latin America,. ‧ 國. 學. rupture of diplomatic relations with the Gambia. Moreover, there is no data about comparative. ‧. analysis of the relations between both groups of countries; thus, this study will have a contribution not only for the academic world, but also for the East Asia and Central America. er. io. sit. y. Nat. relations arena.. For El Salvador, ties with Taiwan, especially in terms of cooperation, are relevant for the. n. al. Ch. i n U. v. development cooperation received from the Asian country during decades. For Taiwan, this. engchi. country is an important ally, since it has been a loyal supporter of Taiwan’s intentions to join the UN and the WHO. For Costa Rica, ties with China, especially in terms of trade, represent an important shift of diplomatic relations, mainly due to the PRC’s newly position as the world's second largest economy, and Costa Rica’s participation in the Asia-Pacific Economic Cooperation (APEC) as an observer. For China, the partnership with a Central American country and ex-ally of Taiwan is relevant, since both the PRC and the ROC have always had a diplomatic competition, in which China has been trying to squeeze Taiwan’s international space. Additionally, since the Central American countries have closer ties with United States; Costa 12.

(20) Rica can perform link for China to improve and eventually transform the nature of its relations with the hegemonic country. Within this context, the research question to be answered is the following: What are the differences between the cooperation the ROC carries out with El Salvador, and the cooperation the PRC implements in Costa Rica? The hypothesis to be proved is that: Taiwan’s cooperation tends to be North-South, while China’s cooperation tends to be South-South.. 治 政 The goal of this research consists in determining what kind 大 of cooperation does Taiwan (ROC) 立 carry with El Salvador, and what type of cooperation does China (PRC) implement in Costa Rica,. 1.2.1 Objective. ‧ 國. 學. in order to make a comparison between both cooperation relations.. ‧. 1.2.2 Justification. y. Nat. er. io. sit. The motivation of the research is to evaluate how China (PRC) is increasingly approaching the Central America region, originally an ally region of Taiwan (ROC), within the context of. n. al. Ch. i n U. v. diplomatic competition between China and Taiwan; and to study the benefits that the region,. engchi. especially El Salvador and Costa Rica, are obtaining with their respective partnerships.. 1.2.3 Variables The most important variables to be considered in this research are: the economic boom that China and Taiwan have had in recent years, the relationship between them before and after the "diplomatic truce" (2008) and the increase of their relations since 2010 by the signature of ECFA. They are all determinants in their relations with Costa Rica and El Salvador respectively.. 13.

(21) Independent Variable: Cross Strait relations (China and Taiwan) and their economic performance in the global arena. Dependent Variable: Their relations with Costa Rica and El Salvador respectively. 1.3 Literature Review In general, some approaches to this topic have been found in several documents; however, there is no information available about a comparison between El Salvador-ROC and Costa Rica-. 治 政 also for the East Asia and Central America relations arena. 大 立 According to Ambar Arias, Karin Palma & William Aquino (2008) in their thesis “Análisis PRC relations, which makes it an innovative contribution, not only for the academic world, but. ‧ 國. 學. de la Cooperación e Inversión de la República de China (Taiwán) y su Impacto en la República. ‧. de El Salvador, 1997-2007”, Taiwan's interest in its Central and Caribbean allies responds to their proximity to the United States, the world's largest market, and it can serve as a platform to. y. Nat. er. io. sit. enter the US market. Also, the ROC has as a primary interest to secure diplomatic and political support from the Salvadoran government, regarding the international community, additionally to. n. al. Ch. i n U. v. ensure the supply of raw materials and natural resources. The content of their thesis is similar to. engchi. one part of the subject to be analyzed in this paper: the relations between Taiwan and El Salvador. Joel Atkinson argues in “Aid in Taiwan’s foreign policy: putting Ma Ying-jeou’s aid reforms in historical Perspective” (2014), that the ROC’s foreign aid can be viewed as a result of three challenging and persistent pressures: preserving the number of diplomatic ties, enhancing its global reputation, and encompassing aid expenditure. The tacit “diplomatic truce” promoted by Ma Ying-jeou with China has diminished meaningfully the pressure between these three constrains on Taipei’s foreign aid policy. 14.

(22) On the other hand, for the Círculo de Copán; Centro Internacional para el Desarrollo Humano (CIDH); Instituto Centroamericano de Políticas para el Desarrollo (2009) in their report “Relaciones Centroamérica y El Caribe con Potencias Extranjeras: Costa Rica – China”, they concluded that the interest of the PRC in Central America, is a political interest for taking space from Taiwan in the diplomatic battle, with the promises of trade and development aid to decrease the presence of Taiwan in that region. The “Policy Paper on Latin America and the Caribbean” (2008), stated that “As the largest. 治 政 大cooperation with all countries on win-win strategy of opening-up. It is ready to carry out friendly 立 the basis of the Five Principles of Peaceful Coexistence and build a harmonious world of durable developing country in the world, China is committed to the path of peaceful development and the. ‧ 國. 學. peace and common prosperity”. However, based on the “One China” principle, which is the. ‧. political foundation on which China develops relations with Latin American and Caribbean countries and regional organizations, Chinese government has the willingness to establish. y. Nat. er. io. sit. relations with the countries in the region which abstain to have relations with Taiwan, in consonance with the One China Principle.. n. al. Ch. i n U. v. Yopo, Mladen (2011) in “América Latina en la Mira Estratégica de la República Popular. engchi. China”; argues that PRC aims to reduce Washington's influence globally, especially in Latin America, through their relationship with the countries in the region. In Latin America, this desire is significantly remarkable in countries like Cuba, Venezuela, and in a lesser extent in Bolivia, Brazil, Ecuador and Nicaragua. However, this situation has not diminished the role of the US as the main reference of Latin America and has not ended totally a "restrictive" presence of China. Nevertheless, there is a US concern for the strengthening of China, in accordance with the U.S. Congressional Research Service (2008), “China’s Foreign Policy and ‘‘Soft Power’’ In South America, Asia, and Africa”; In this report, the authors point out that it seems that China 15.

(23) wants to convey soft power by demonstrating its own system as an alternative model for economic growth, one based on authoritarian governance and elite rule without the restrictions and demands that political liberalization has. Additionally, it seems that a part of China’s soft power is intended to reduce Taiwan’s international space. Furthermore, Mendelson, J. & Moreira, S. (2009) in their paper “Taiwan-China Balancing Act in Latin America” explains that Taiwanese authorities were concerned about a possible domino effect prompted by Costa Rica’s decision to establish diplomatic ties with the PRC. Taipei is aware that the more China’s role in the global economy grows, the more pressure there. 治 政 大 is on its allies to split ties with the ROC. 立 On the other hand, as stated by the Department of Economic and Social Affairs (2010) in ‧ 國. 學. their international development cooperation report “Development Cooperation for the MDGs:. ‧. Maximizing Results”, a key advantage of South-South Cooperation, as seen from a recipient countries’ perspective, is that it carries little, if any, economic or governance requirements or. y. Nat. er. io. sit. policy conditionalities, and is not aligned to policy arrangements with multilateral organizations. Hence, bilateral Southern contributors highlight that development aid should not interfere in their. n. al. Ch. i n U. v. internal affairs. Southern multilateral organizations also do not usually impose any. engchi. macroeconomic conditionalities - making faster the mobilization of aid - , and disbursements are only interrupted if a beneficiary falls into debts. Also, the same document argues that the largest Southern aid providers are China, Saudi Arabia and Venezuela (each one provides over US$2 billion a year), followed by Arab Agencies (over US$1 billion) and India (over US$ 750 million). In 2008, top 3 providers (Saudi Arabia, China and Venezuela) together accounted for 75% of total Southern development cooperation, compared with 60% in 2006 (UN, 2010).. 16.

(24) Regarding the North-South Cooperation, Chien, Yang & Wu argue in their study about “Taiwan’s Foreign Aid and Technical Assistance in the Marshall Islands” that scholars coincide that northern countries focus their foreign assistance in three major sectors: their former colonies; strategic geo-politically/geo-economically weak sectors; or areas where they are able to advocate human rights, democracy, and proper governance corresponding to their own political systems and principles. Finally, in accordance with the information collected, the interest of China in Central America is basically to squeeze Taiwan’s international space (Círculo de Copán, Centro. 治 政 大 Internacional para el Desarrollo Humano, Instituto Centroamericano de Políticas para el 立 Desarrollo, 2009; Committee on Foreign Relations United States Senate, 2008); and Taiwan’s ‧ 國. 學. interest is to secure diplomatic and political support, and because of their proximity to the USA. ‧. (Arias, A., Palma, K. & Aquino, W., 2008). Additionally, Taiwan is concerned about the rising of China’s role in the global economy, due to the pressure it can put on Taiwan’s allies to cut. y. Nat. n. er. io. al. 1.4 Methodology. sit. their ties (Mendelson, J. & Moreira, S., 2009).. Ch. engchi. i n U. v. The research method used is comparative study based on document analysis of data obtained from books, e-papers and e-journals. Part of these sources is found in journalistic notes, which provides complementary information and data.. Having addressed briefly the historical and current context of the relations between China and Taiwan with Latin America; it is necessary to study the concepts to be used for the. 17.

(25) comparative analysis proposed, which is the International Cooperation, specifically the terms of North-South Cooperation and South-South Cooperation.. 立. 政 治 大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 18.

(26) Chapter 2: INTERNATIONAL COOPERATION IN EL SALVADOR. CASES OF INTERNATIONAL COOPERATION RECEIVED FROM THE UNITED STATES AND VENEZUELA. 2.1 Introduction This chapter deals with the theoretical framework to be used for the analysis of this topic. Here, the author provides the concept and origin of International Cooperation (IC), North-South. 治 政 大be applied in the international concept and application of the latter two terms, they will 立 cooperation received by El Salvador from the United States, which is an example of NSC; and. Cooperation (NSC) and South-South Cooperation (SSC). For a better understanding of the. ‧ 國. 學. the one received from Venezuela, which is a type of SSC.. ‧. 2.2 Concept of International Cooperation (IC). y. Nat. er. io. sit. According to the Organization for Economic Cooperation and Development (OECD), IC is a joint action to support economic and social development through the transfer of technologies,. n. al. Ch. i n U. v. knowledge, experiences or resources from countries with equal or greater level of development,. engchi. multilateral agencies, NGOs and civil society. It is also known as development cooperation and it is a global concept which includes different forms of aid flowing to less developed countries. IC embraces issues like governance, foreign aid, gender equality, healthcare, poverty reduction, education, economics, infrastructure, environment, human rights and disaster prevention, among others. Additionally it pursues to carry out long-run solutions for problems, by assisting developing countries to solve their difficulties (Lee, 2013). To talk about the evolution of IC or International Cooperation for Development (ICD) is practically the same to talk about the evolution of North-South cooperation. In the past 6 decades, 19.

(27) the ICD has become an indicator of the zeal of developed countries to attend the needs of developing nations with respect to the reduction of poverty, technical assistance, economic reform, institutional strengthening and democratic governance (Antonini & Hirst, 2009). The next two sections are focused on the concepts of NSC and SSC with their respectively case of study.. 2.2.1 North-South Cooperation (NSC) In the policy document “Approaches to North-South, South-South and North-South-South. 治 政 大NSC involves a description of the Collaboration” (Rosseel et al., 2009), the authors point out that 立 geographical division where the North represents the richer countries of the United States, ‧ 國. 學. Canada, European countries, Japan, Australia and New Zealand (even though the latter two. ‧. countries are geographically in the south, they are considered as “northern countries” because they are considered as developed countries), and the South represents the poorer majority of. y. Nat. er. io. sit. countries in Africa, Asia and Latin America. North-South Cooperation is thus the development cooperation between the North (the developed countries) and the South (the developing. al. n. countries).. Ch. engchi. i n U. v. The origin of this kind of cooperation was recognized after the Second World War when the Marshall Plan was launched to assist European countries in their reconstruction. The success of the implementation of this program boosted the idea of development cooperation. In the period of the 1940s and 1960s development cooperation was almost exclusively between two countries: one in the North and one in the South. In the next stage of approximately 20 years (1960s-1980s) the multilateral development cooperation notably increased (Rosseel et al, 2009). Four major multilateral institutions were responsible for providing development assistance during this period: the Fund for Special Operations of the Inter-American Development Bank 20.

(28) (IDB); the Cooperation Fund of the European Economic Community (EEC), International Development Association (IDA); and the United Nations Development Programme (UNDP). Similarly, in Mónica Hirst and Blanca Antonini’s (2009) paper: “Past and Present of North-South Cooperation for Development”, when studying the antecedents of NSC, they point out that the entry of new nations into the United Nations (1950s-1960s), as a result of the decolonization process in that time, set a precedent in terms of the debates of the overall organization, like the beginning of a multilateral agenda and its redefinition due to the. 治 政 大 in fact, contributed to forestall neo-colonialist pattern of interaction starting at that time, which, 立 the formation of self-sufficient nations.. development issue. Therefore, it emerge the issue of North-South cooperation agenda which set a. ‧ 國. 學. On the other hand, Rosseel, De Corte, Blommaert and Verniers (2009) did a SWOT. ‧. analysis of the NSC in which they argue that there’s an unequal power balance in favor to the north opinions and sometimes both goals (from the north and the south) do not coincide between. y. Nat. er. io. sit. each other. It also can create dependence on the financial support of the north, a lack of continuous monitoring in long-term, among others weaknesses and threats; however, in the NSC,. n. al. Ch. i n U. v. either northern or southern countries may have the opportunity to make new equal partnerships.. engchi. In fact, one of the points highlighted by the literature on the donation culture of the north is its commitment to the political and institutional contexts and the interests of their respective governments. This may be a type of soft power. North-South cooperation can respond to three kinds of motivations: a) economic ones, related to investment and trade; b) political ones, linked to positions on foreign policy or positions adopted in multilateral domains; c) strategic ones, which function as an element used to trade up for military support and/or are explained by the location of recipient countries in different areas of influence (Rosseel et al., 2009).. 21.

(29) 2.2.1.1 Characteristics of the North-South Cooperation Chien, Yang & Wu argue in their study about “Taiwan’s Foreign Aid and Technical Assistance in the Marshall Islands” that scholars coincide that northern countries focus their foreign assistance in three major sectors: their former colonies; strategic geo-politically / geoeconomically weak sectors; or areas where they are able to advocate human rights, democracy, and proper governance corresponding to their own political systems and principles. International assistance is the most effective tool to fight against poverty. However,. 治 政 大(GNI) on aid, lesser than in 1990 collectively are spending 0.25% of their gross national income 立 but since 1997 trnded to increase (UNDP, 2005).. nowadays that tool is inefficiently targeted, misallocated, needs to be corrected. North countries. ‧ 國. 學. The country members of the G-85 have the lowest shares of aid in GNI among the 23. ‧. countries on the Organization for Economic Cooperation and Development’s Development Assistance Committee (OECD-DAC). According to the 2005 UNDP Human Development. y. Nat. er. io. sit. Report, the more the prosperity has growth in the developed countries, the more the international aid has decreased since 1990, when wealth increased in rich countries, and aid did not grow: per. n. al. Ch. i n U. v. capita income has growth by US$6,070, while per capita aid has reduced by US$1. Moreover,. engchi. for every US$1 that rich countries spend on development assistance, they allotted another US$10 to military budgets (table 2.1). Just considering the upsurge in military spending since 2000, according to the UNDP, if they focused that money only in providing aid, this would be enough to achieve the long-term UN aim of spending 0.7% of GNI on aid. Similarly, the existing expenditure on HIV/AIDS, an illness that has caused the death of over 3 million people a year, represents the 3 days value of the total military expenditures (UNDP, 2005).. 5. Canada, France, Germany, Italy, Japan, Russia, United Kingdom and United States.. 22.

(30) Table 2.1: Development aid and Military expenses in northern countries. Distribution of government expenditure, 2003 (%) (OECD-DAC member countries) Military outlay 10.7 4.3 5.7 6.3 5.7 5.4 10.7 7.3 26.5 4.6 9.8 5.7 4.8 6.5 6.3 8.9 10.0 6.7 6.4 8.5 13.3 25.0. 政 治 大. sit. Nat. y. ‧. ‧ 國. 立. ODA6 1.4 1.1 2.7 1.2 3.1 1.6 1.7 1.4 1.4 2.1 0.9 1.2 3.9 3.2 1.2 4.1 1.0 1.3 2.8 3.5 1.6 1.0. 學. Country Australia Austria Belgium Canada Denmark Finland France Germany Greece Ireland Italy Japan Luxembourg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland United Kingdom United States. n. al. er. io. Source: UNDP, “Human Development Report 2005, International Cooperation at a Crossroads, Aid, Trade and Security in an Unequal World”, UNDP, New York, USA, 2005. Ch. engchi. i n U. v. In NSC persists one of the worst practices and abuses of poverty-focused development assistance: the tied aid7. This means that the development assistance to be provided is under the condition of the procurement of supplies and services by the donor country, instead of permitting aid recipients to recur to the open market. Currently, many donors have been lessening tied aid,. 6. Official Development Assistance: it includes both bilateral and multilateral aid through grants, low-interest loans, or in-kind assistance (OECD definition). 7 “Tied aid credits are officially supported Loans, credits or Associated Financing packages where procurement of the goods or services involved is limited to the donor country or to a group of countries which does not include substantially all developing countries (or Central and Eastern European Countries/New Independent States in transition)”. Source: OECD Glossary of statistical terms, http://stats.oecd.org/glossary/detail.asp?ID=3089. 23.

(31) but the practice continues extensively. According to the UNDP, the estimation of costs of tied aid for low-income countries is between US$5–$7 billion. Moreover, there is a remaining unevenness in the duties. It is mandatory for recipient countries to set targets for attaining the MDGs 8 , according to the budget targets monitored quarterly by the International Monetary Fund (IMF), to fulfill all the requirements set by donors and to deal with donor practices that increase transaction costs and lessen the value of aid. Benefactors offer wide-ranging, non-tying pledges on aid quantity (most of which are. 治 政 大 countries or benefactors can the report, unlike the southern countries or aid recipients, northern 立 break pledges with impunity (UNDP, 2005). subsequently ignored) and even unclear commitments to improve the aid quality. According to. ‧ 國. 學 ‧. Trade and human development. Trade has the capacity to be an excellent means for human development. Under the. y. Nat. er. io. sit. accurate conditions international trade could stimulus to achieve the MDGs. The difficulty is that the human development possibility intrinsic in trade is weakened by a mixture of unfair rules and. n. al. Ch. i n U. v. structural disparities between and within nations. Yet structural disparities remain, and in some. engchi. cases they have worsened. Fairer trade regulations would facilitate market access. The world’s highest trade barriers are raised against poor countries: the trade barriers met by southern countries exporting to northern ones are 3 to 4 times higher than those met by developed countries when they trade with each other, especially in agriculture, because of northern countries’ subsidies (UNDP, 2005).. 8. Millennium Objectives Goals: Eliminate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; enhance maternal health, combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability and strengthen global partnerships for development, http://www.un.org/millenniumgoals/bkgd.shtml. 24.

(32) Nonetheless, in the last round of world trade negotiations, developed countries promised to reduce agricultural subsidies, since then, they have increased them. Currently, they spend more than US$1 billion a year on aid for agriculture in southern countries, and less than US$1 billion a day subsidizing agricultural overproduction at home (UNDP, 2005). However, NSC is the most traditional way of transferring development aid to developing countries. The goals and conditionalities of the Northern countries, sometimes contrast greatly from the goals and circumstances of Southern countries. These clashes cannot always be solved and it can endanger. 治 政 concerns of the North prevail sometimes over the concerns of大 the South (Rosseel et al., 2009). 立 Furthermore, according to studies made by the OECD there is an effort of developed. the success of the project or program to be implemented in the developing country, thus the. ‧ 國. 學. countries to increase their aid in terms of ODA to developing countries. In 2013 the development. ‧. cooperation increased by 6.1% in real terms, thus attaining the greatest level ever reported, notwithstanding of constant pressure on funds in OECD members since the global economic. y. Nat. er. io. sit. crisis. Donors disbursed a sum of US$ 134.8 billion in net ODA, marking a recover after two years of dropping volumes, due to several governments increased their outlay on foreign. al. n. assistance.. Ch. engchi. i n U. v. Additionally, OECD reports that the US continued to be the biggest donor by volume with net ODA of US$ 31.5 billion, a growth of 1.3% in real terms from 2012. US ODA as a portion of GNI was 0.19% (1 percentage lower than 2011, according to the Figure 5.1 in chapter 5). Most of the rise was due to humanitarian assistance and support for combating HIV/AIDS. By contrast, US net bilateral aid to developing countries dropped by 11.7% in real terms to US$ 8.4 billion, mainly due to reduced payouts to Afghanistan. Furthermore, OECD has estimated a slight growth of the aid by 2.4% in real terms in 2014, due to continuous growths by a few DAC donors and multilateral agencies, and is projected to remain constant beyond 2014. 25.

(33) An example of NSC is the United States-El Salvador relations, where it is clear the US is the Northern country, and El Salvador is the Southern one. The issue to be addressed is specifically the Millennium Challenge Corporation (MCC) and its condionalities for El Salvador to obtain a 2nd compact.. 2.2.1.2 United States and El Salvador relations: Millennium Challenge Corporation (MCC) Since November 2006, the Millennium Challenge Corporation (MCC)9 or FOMILENIO – “Fondo del Milenio”, as it is called in El Salvador – has been stimulating economic growth in El. 治 政 Salvador's Northern Zone - the primary conflict zone during 大 the civil war - through restoration of 立 roads, credit, technical assistance and investments in human capital, which includes improved ‧ 國. 學. water and sanitation services, vocational education, and a better energy supply. It was the first. ‧. US$ 461 million compact which was used to invest in rural business development, education, agricultural production, public services, and transportation infrastructure (MCC, 2014).. y. Nat. io. sit. The largest of the compact’s components was the transportation project which intended to. n. al. er. physically connect El Salvador’s Northern Zone with the rest of the country, and to permit new. Ch. i n U. v. economic opportunities for rural households, lower transportation costs, and decrease travel. engchi. times to markets. In September 2007, the compact entered into force initiating the five-year timeline for project implementation, concluding program implementation in July 2012, with the building of a bridge as a part of the Northern Transnational Highway (MCC, 2014). On December 15th, 2011, the MCC informed Salvadoran President Mauricio Funes that the Institution’s Board had agreed to select El Salvador as qualified to create a proposal for a second. 9. “MCC is a U.S. government agency that works with developing countries. MCC assistance is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and help eliminate extreme poverty”. Source: U.S. Embassy in El Salvador, http://sansalvador.usembassy.gov/news/2011/12/16.html. 26.

(34) compact grant (U.S. Embassy in El Salvador, 2011), which was expected to be signed in September 2012, when the first compact that was running in the north of the country was over (El Diario de Hoy, 2011). However, being elected for a second compact is not automatic, there are some requirements to be accomplished, because MCC takes into account not only a country’s policy performance as measured by MCC's indicators, but also the effectiveness of implementation on its first compact (U.S. Embassy in El Salvador, 2014). The Fomilenio II includes an investment of at least US$ 365.2 million, where 277 million are a non-refundable donation, and 88.2 million correspond to El Salvador’s government. 治 政 大investment climate, human capital counterpart. Moreover, this compact will have 3 components: 立 and logistics infrastructure, and some of the investments will focus on the coastal strip of El ‧ 國. 學. Salvador and the expanding of the country’s International Airport (Communications Secretariat. ‧. of GOES10, 2013).. The component of the investment climate includes the administrative simplification, the. y. Nat. er. io. sit. implementation of new laws and leverage investments that attract capital to the country. For this component there are now 22 private investment projects, amounting to US$ 293 million. n. al. Ch. i n U. v. (Communications Secretariat of GOES, 2013). Meanwhile, human capital seeks to improve the. engchi. quality of education and training of human resources to suits their abilities to the market demands. With the logistics infrastructure, it seeks to reduce logistics and transportation costs through the construction and improvement of two road sections: one between the International Airport and Zacatecoluca11, and the other going to the border pass with Honduras (Amatillo, department of La Union) (Communications Secretariat of GOES, 2013).. 10 11. GOES: Government of El Salvador Municipality of the department of La Paz (South of El Salvador). 27.

(35) Even though the signature of the Fomilenio II was foreseen to be around the last semester 2012 - thus far it have not occurred yet (2014) - most of the reasons respond to Salvadoran internal problems12 and the nonfulfillment of the conditions required by the U.S. government for disbursing the compact. Regarding these conditions, the main one to outplay the Fomilenio II is the approval of the amendments to the Special Law of Public Private Partnerships (APP) 13 adopted in May 2013, in order to improve the conditions for investment and national development. According to representatives of MCC in El Salvador, the deputies must approve. 治 政 大 hasta junio 2014” (in English: According to the note “Firma de Fomilenio II se postergará 立 “The Signature of the Fomilenio II will be postponed until June 2014”) published in a the suggested changes before June 2014.. ‧ 國. 學. Salvadoran electronic newspaper, the suggestions of the U.S. government, led by Barack Obama,. ‧. are 33 proposed amendments to the law14. The most notable are: to increase the tax ceiling in relation to GDP, between 1 and 3% which means that the country will increase the capacity limit. y. Nat. er. io. sit. to assume future and contingent commitments with the investors. Another condition is that the Legislative Assembly must approve all the concessions made in public-private projects.. al. n. 12. Ch. i n U. v. One internal problem was an outstanding conflict between the Chamber of Administrative Litigation and the Constitutional Chamber of the Supreme Court of Justice (CSJ) related with demands on the process of electing judges in 2009; and the other one was the presidential election process in 2014 (Central America Data.com, 2013).. engchi. 13. In accordance to the note: “Aprobada: la Ley de Asocios Público Privados ya es un hecho” (in English: “Approved: the Public Private Partnerships Law is a fact”), published in the Salvadoran digital newspaper “ContaPunto” in May 2013, according to Salvadoran government, through the APPs may facilitate to private investors to invest in the public sector, thus the country may obtain the necessary resources for infrastructure investment and improvements services. Salvadoran government has already two projects that seek to establish Partnership: the expanding of El Salvador International Airport and the construction of a park of wind power generation. The Special Law of APP includes the creation of two entities, one that will manage the Partnerships (DAPP), and the other one will regulate them (Agency for Supervision of APP). The DAPP will be the responsible to know about the projects coming from both public institutions and private sector. Aftermath, the APP will be subject to a process of deadlines, thus having the approval of various public institutions, including the Ministry of Finance. Web site: http://www.contrapunto.com.sv/coyuntura/aprobada-la-ley-de-asocios-publico-privados-ya-es-un-hecho 14. By the time this chapter is being elaborating, the Legislative Assembly of El Salvador approved the 33 reforms of the Especial Law of APP suggested by the US government on 25th April 2014, http://elmundo.com.sv/aprobadareforma-que-sube-techo-fiscal-a-app. 28.

(36) The third condition is that the Article 11 of the law should require the creation of the Direction of Public Private Partnership (DAPP) as an autonomous entity with legal personality, own assets and administrative autonomy under the Ministry of Economy. The reform replaced the DAPP by the Agency for Promotion of Exports and Investments of El Salvador (Proesa), which is the only one that exists today by executive decree. For MCC, Proesa would be the institution responsible for managing this kind of projects. One of the remaining conditions are the reforms to the Law Against Money Laundering and Assets, and the observation of the rules of the CAFTA –DR agreement, 15 related to the. 治 政 大 with the agricultural packages. purchase and selling of hybrid maize seeds to be distributed 立 According to John Barrett, economic counselor at the U.S. embassy in El Salvador, the process ‧ 國. 學. of the last purchase does not meet with the requirements established in the CAFTA-DR. Also he. ‧. said "The seed matter is important, because it is an example where the GOES has to give confidence in terms of respect of their obligations in the FTAs" (La Prensa Grafica, 2014).. er. io. sit. y. Nat. 2.2.2 South-South Cooperation (SSC). Case of Venezuela and El Salvador relations.. n. al. Ch. i n U. v. In the policy document: “Approaches to North-South, South-South and North-South-South. engchi. Collaboration” (2009), its authors point out that SSC is a broad concept that covers a wide range of collaborations among developing countries. It refers more specifically to cooperative activities between newly industrialized Southern countries and other less developed nations of the South. Such activities are mainly situated in the areas of politics, economy and technology. The aim of SSC is to promote self-sufficiency among Southern nations and to strengthen economic ties among states whose market power match more equally, especially when compared with asymmetric North-South relationships. 15. Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). 29.

(37) The origin of the SSC dates back to the Bandung Conference in 1955 in Indonesia. During this conference, it was discussed the need of SSC to ensure a more effective participation in the global scenario, and it was viewed as a complement to the extensive economic relationships between the developed and developing countries. In the 1970s, the UN created a Special Unit for SSC (SU/SSC), which promoted South-South trade and investment. In 1989 the Group for South-South Consultation and Coordination (G-15) was created in order to promote SSC. Due to the reduction of aid from Northern countries in the period 1980s-1990s, it emerged the need of. 治 政 大development, literacy, eliminating up with the aim of prioritizing transfer of technology and skill 立 trade barriers and direct investments. mutual cooperation rather than dependence on Northern states. In 2000, the Group of 77 was set. ‧ 國. 學. According to the authors, due to the increasing awareness of Southern countries which. ‧. share common characteristics and goals, and that can cooperate together to achieve their goals, since the late 1990’s aid from one developing country to another seems to grow faster than aid. y. Nat. io. sit. from developed to developing countries. Tom Wheeler (2004) in his article about “South-South. n. al. er. Cooperation” refers to the South-South cooperation as a relationship between developing. Ch. i n U. v. countries, a manifestation of multilateral diplomacy where developing countries feel the need to. engchi. exercise greater influence and to set the global agenda. Similarly Bruno Ayllón Pino (2009) in his paper: “Cooperación Sur-Sur: Innovación y Transformación en la Cooperación Internacional”, argues the relevance of this cooperation as complementary and necessary aid, in order to decrease the dependency developing countries have on the developed ones. In accordance to the report of the Department of Economic and Social Affairs of the UN (2010) “Development Cooperation for the MDGs: Maximizing Results”, which focus on some of the recent trends, SSC has lately grown rapidly, from US$8.6 billion (6.9% of global development cooperation) in 2006, to US$15.3 billion (9.5% of development cooperation) in 30.

(38) 2008, thus representing a growth of US$6.7 billion (78%) in two years. The participation of SSC in global development cooperation has doubled in ten years, mainly due to large increases by China, Saudi Arabia and a doubling of Venezuela’s cooperation through its Petrocaribe oil loans arrangements. Nevertheless, almost all Southern providers increased flows, except the United Arab Emirates (UAE) (UN, 2010). The largest Southern providers are China, Saudi Arabia and Venezuela (each one provides over US$2 billion a year), followed by Arab Agencies (over US$1 billion) and India (over. 治 政 accounted 75% of total Southern development cooperation,大 compared with 60% in 2006 (UN, 立 2010). On the other hand, Rosseel et al. (2009) did a SWOT analysis of the SSC and they state. US$ 750 million). In 2008, top 3 providers (Saudi Arabia, China and Venezuela) together. ‧ 國. 學. that this kind of cooperation may boost economic, cultural, environmental and social. ‧. development, and they pinpoint that the SSC will continue increasing. However, there is an ineffective coordination, lack of resources and some political problems that developing countries. y. Nat. n. al. er. io. respectively.. sit. can drag out this process, among others strength, opportunities, weaknesses and threats. Ch. engchi. i n U. v. 2.2.2.1 Characteristics of South-South Cooperation Types of cooperation. In general, over 90% of SSC financed by governments and South-South multilateral organizations is “country programmed”, and around 75% of SSC goes in the form of project finance. Most of the largest providers (China, Arab governments and multilateral institutions, India, and Thailand) focus on this type of support due to their concentration on large infrastructure projects (UN, 2010).. 31.

數據

Table 1.1: Important Diplomatic events occurred in PRC and ROC from 1949 to 2013   People’s Republic of China (PRC)  Republic of China (Taiwan)
Table  2.1:  Development  aid  and  Military  expenses  in  northern  countries.                    Distribution of government expenditure, 2003 (%) (OECD-DAC member countries)
Table 3.3:  Major Trading Partners of Central American Countries, 2012 (US$)
Table 3.5: Agreements between the governments of ROC and El Salvador
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