The recent switch in diplomatic relations by Taiwan to the Peoples Republic of China (PRC) is the latest chapter in a continuing expansion of influence by the PRC in the Caribbean and Central America at the expense of Taiwan.

Only 26 countries in the world still recognize Taiwan and almost half of them are in the Caribbean and Central America. Since the United Nations expelled Taiwan in 1971, successive Taiwan governments have spent millions of dollars in aid to persuade countries in the region to support their struggle with China for international recognition.

The policy has until now largely paid off with seven countries in Central America plus the Dominican Republic (D.R.), Haiti and Paraguay still in Taiwan’s corner. Those in Central America are Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

Those in the Caribbean are Grenada, St. Kitts & Nevis and St. Vincent & the Grenadines. Taiwan is the largest single aid donor to them and Dominica was on that list until it decided to break as well now. Regional observers point out that large amounts of aid can and do make a significant difference in small countries.

Describing Dominica’s move as “acting in its own interest,” Anthony T. Bryan, professor of international relations at the University of Miami, said Taiwan “engaged in the same type of policy of wooing smaller nations with economic support. I don’t see any reason this should not be happening. The present government of Dominica has decided that relationship should come to an end and the Chinese relationship would probably be the most fruitful in the future.”

But its not just about aid. Both Taiwan and the PRC have increased their activities in the region in recent years but the behavior of the PRC has made conservatives in Washington nervous. Taiwan has subsidized a children’s museum supported by Panama President Mireya Moscoso and built a private foundation in Haiti for former President Jean-Bertrand Aristide. There have also been reports of Taiwan supporting some presidential candidates in Central America.

But the PRC has also taken sides in the recent presidential election in El Salvador by assisting the defeated leftist candidate Shafik Handal.

The Bahamas largest recipient

But it is the expanding influence of Hutchison Whampoa, the giangantic shipping conglomerate that is being watched increasingly. Controlling two container ports in Panama as well as other far flung holdings around the world, one of Hutchison Whampoa’s biggest coups was the multi-billion dollar concession granted on Grand Bahama Island by the government of the Bahamas after it switched from Taiwan to the PRC (CB Aug. 30 and Sept. 13, 2001). China watchers insisted that the investment was a pay off for the switch by the Bahamas to the PRD.
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Hutchison Whampoa is headed by the 75-year old legendary tycoon Li Ka-shing of Hong Kong, who has close connections with the political and military leadership in the PRC.

“China’s aim is to displace Taiwan in the region and this comes at a time of China’s aggressive reach across the Pacific and into the Caribbean,” said Dan Fisk, deputy director of foreign policy research at the Heritage Foundation, pointing to “the massive investment of Hutchison Whampoa in the Bahamas, 100 miles off the coast of Florida.”

In October 1999 an intelligence assessment by the U.S Southern Command indicated that Hutchison Whampoa “deserved close scrutiny. It could threaten to shift some business from Panama to the Bahamas, thus giving it additional leverage over the Panamanian government” to drop diplomatic recognition of Taiwan.

Conservative journalist Bill Gertz in his book, “Panama Red,” charges that Hutchison Whampoa I” poses a threat to the Panama Canal and to the security of worldwide shipping.” The company insists it is a commercial enterprise with no ties to the PRC government.

Pointing to the booming economy in the PRC, some observers are wondering how long Taiwan will be able to outbid China which is flush with dollars. They indicate that the assistance to Dominica by the PRC figures out to $1,500 for each of its inhabitants, literally about half of their per capita income and wonder if Dominica’s switch could cause other Taiwan allies in the region to think twice.

[What's Happening in the Caribbean]
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