300 million for diplomatic switch

Politics Taiwan Politics
1

The surprise here is not that they admit to the payoff, but rather, the mess the secrecy created -and with good reason. In the international articles, there is no mention that the money that Taiwan had previously donated was spent otherwise (starting with about two million USD that were supposed to be for building housing for the poor, but instead were diverted by local officials to repay favors given during the presidential campaign, among other things…), and that money was handled by the same people now “taking care” of PRC’s “assistance”. Not a good omen.

Oh, that, and the funny note by the President Arias insisting Taiwan’s secret service found out about the deal -when he himself said the ROC was stingy (meaning if they had paid up 300 mill, maybe it would be business as usual).

Enjoy:

[quote]As part of an incentive package to persuade Costa Rica to shift its diplomatic recognition from Taiwan to China last year, China used the muscle of its enormous foreign exchange reserves, agreeing to buy $300 million of Costa Rican bonds, documents released in Costa Rica this week revealed.

The deal shows that China is using its $1.8 trillion in foreign exchange reserves, the world’s largest such cache of foreign currency, to further its political goals, despite promises that it would not do so.

As China’s economic might has risen in recent years, so has concern about its international reach, particularly in the United States. China is thought to be the largest foreign holder of United States government-backed debt, and bankers estimate that $1 trillion of China’s total foreign exchange reserves are in American securities.

The terms of the agreement were meant to be kept secret, according to La Nación, a Costa Rican newspaper, but the government was forced by the constitutional court to publish the memorandum of understanding signed by both countries, as well as other documents. The court considered the information to be in the public’s interest.

The memorandum, posted on the Web site of Costa Rica’s Foreign Ministry, is dated June 1, 2007, the month that China and Costa Rica established diplomatic relations, and it is co-signed by Yang Jiechi, China’s foreign minister.

The memorandum states that in return for Costa Rica’s shutting its embassy in Taiwan and expelling Taiwanese diplomats, China agreed to buy $300 million in bonds.

It also agreed to give $130 million in aid to Costa Rica, as well as other incentives, including 20 scholarships each year for Costa Ricans to study in China.

The documents show that the Chinese State Administration of Foreign Exchange, the secretive organization that is the steward of China’s foreign exchange reserves, agreed to buy $150 million in state bonds, with a term of 12 years and carrying an interest rate of 2 percent per year, in January of this year and a further $150 million in January 2009.

La Nación reported that the Costa Rican finance minister, Guillermo Zúñiga, had warned this week that the decision to make the details of the agreement public could jeopardize the purchase of the second set of bonds by China. It quoted the Chinese ambassador to Costa Rica, Wang Xiaoyu, as saying that China was now assessing the impact on relations between the countries.
[/quote]

http://www.nytimes.com/2008/09/13/world/asia/13costa.html?ref=americas

If you read Spanish: http://www.nacion.com/ln_ee/2008/septiembre/13/pais1699840.html

“There are no lies here. The only lie was when they asked me whether we would break off and I said no… Taipei’s intelligence caught me in the lie”.

EDIT:

Forgot to add an interesting quote from today’s Taipei Times:

[quote]Taiwan’s Ministry of Foreign Affairs (MOFA) spokesman Henry Chen (陳銘政) said yesterday : “The truth of why Costa Rica broke up with us has finally been revealed.”

“It just goes to show that if we had continued to engage in a hostile diplomatic race with Beijing, Taiwan would unquestionably have been crushed,” he said.

Chen said for the year 2008 to 2009, MOFA’s budget has been roughly earmarked at US$1 billion (NT$30 billion).

“There is no way that we would be able to allocate one-third of our annual budget on cementing ties with just one country,” he said.

“This goes to show that a modus vivendi is necessary so we can avoid playing this money game [with Beijing],” he said.
[/quote]

2

Yup its the dirty game of dollar diplomacy. Neither the ROC nor PRC hold the moral high road in this game.

Now if we can tie that into CSB corruption scandal that would be the icing on the cake.

3

The original justification for CSB’s slush funds was dollar diplomacy wasn’t it. Presumably the PRC has the same sort of dollar diplomacy funds.

Mind you one reason the PRC has an advantage in this game is that anyone who reveals information about slush funds will be shipped off to a camp somewhere for violating state secrets, unlike in the good old ROC where the incentive is to nark out your co conspirators in return for immunity before they do the same to you once your party loses power.

And now that Ma has declared a truce the people controlling the PRC’s slush funds can spend them themselves rather than shipping them off to the third world, secure in the knowledge that if anyone tells they are screwed.

Isn’t Communism wonderful :wink:

4

Got fuck-all to do with “truce.” Ma is just adopting the stance (quite rightly) that these stupid little pissant Central American banana republics are not worth courting. And not before time.

5

Yeah, but what happens to all the money the PRC had budgeted for bribing 'em? I’d say someone high up in the PRC gets to keep it.

6

Here too. Who do YOU want your tax dollars going to? Some swarthy fellow with big shiny epaulettes, dark glasses and no compunction about murdering or disappearing his adversaries or some slimy local toerag politician who might at least let a little bit of the cash trickle down to improve a local road or something? I know what I’d prefer.

7

Exactly. Well said.

This is, I think, the main difference. While Central American politicians take the money -millions US dollars- and high-tail it to Europe to live la vida loca, ROC’s politicos invest the money into making… more money. That is why we in Central America cannot get rid of those parasite-politicians: they have to come back and back again to take from the public treasury -all the way from jail, from Europe, from teaching in the US- because as business people -inherited from their royal blood families- they fail and must keep on stealing again. Enough is never enough when there is no skill in keeping the money. Now, if they only learned to “spread the wealth” like ROC’s best…
that, I’ve been told time and time again, was Chen’s biggest fault.

I want to know what they will do with the money from PRC. If they try to swindle the CCP, God have mercy on their souls, as it will be the only thing the Communists will not burn to the ground to get their money back. Now, that I would really like to see. :smiling_imp: They willl not resist the temptation. C’me on, just one bite now, just one little bite…

EDIT:
And by the way, the people are getting sick of the double play. Just yesterday Honduras’ president was booed for giving praise to the ALBA…

8

Some of the tax dollars do go to worthwhile diplomatic activities. The Overseas volunteers, medical missions, and Overseas Alternative Service have done some pretty amazing things to help the sick, needy and hungry (not to mention women and families). The free scholarships for overseas students have also helped out a lot of poor students (not just the rich ones). Although, on a few occasions, Taiwan’s government definitely has not taken the high road with these students. Stripping a HIV student of her scholarship and sending her back on a South African Airways flight to die medicineless in a poor African country ain’t too compassionate in my eyes. Getting a foreigner to write the notification letter was even worse. :unamused:

9

That’s just part of the game. Notice only Taiwan’s diplomatic allies get such aid, and non-allies get squat. It only makes sense, you have to pay off your allies one way or another to maintain said offical relationship. As soon as any of them cease to reciprocate with that recognition, they’re cut off.

Not that there’s anything wrong with it, that’s why it’s called dollar diplomacy.

10

Actually, not only “diplomatic” allies benefit from these missions. As long as they are allowed, these technical and medical missions give a helping hand (some have been in these foreign countries for 40, 30, 20 years, even after diplomatic relations are cut off). The problem is that they must do it “silently”, without making waves, or face the wrath of the guys from the other side…

As a matter of fact, allied governments may impede more of the good work, since the corrupt officials cannot bear common people actually benefiting, and because of the political alliance they actually have a barganing chip to restraint these good efforts. Furthermore, as I’ve told you before, these remarkably helpful actions are often clouded because of the bad press from illegal operations by Taiwanese businesses, or mismanagement of donations given directly to these allied governments. Not much Taiwan can do, in those cases.

Chewy, truth be told, yes, that case of the African student is dreadful, and even though the officials may claim it is the law, it is still an appalling action. However, these officials have also been more than lenient, even in cases escalating into the criminal -scams, theft, even alleged rape- and protected the undeserving students from the righteous consequences of their actions -though most were expelled as well. In the case you mention, I believe the larger role was played by their ignorant fear of AIDS, not aimed especifically at the foreign student per se -though it was convenient to put her on a plane- but rather remember how they treat their own people, even children, afflicted with this most painful and so misunderstood disease. Having the resources and being compasionate are two different things.

That is why the people who participate in the foreign missions are so uncommon. They risk life and limb, family members, family ties, reject and career limbo, for strangers. Most of the ones I’ve met are simply awesome.

I am sorry to hear what you went through. I would still be having nightmares over this if I were you.

11

[quote=“KingZog”]
The original justification for CSB’s slush funds was dollar diplomacy wasn’t it. Presumably the PRC has the same sort of dollar diplomacy funds.

Mind you one reason the PRC has an advantage in this game is that anyone who reveals information about slush funds will be shipped off to a camp somewhere for violating state secrets…[/quote]

Actually, no. China does have more money and more ability to spend it(and more political clout), but it doesn’t need to hide money like Taiwan does in order to play dollar diplomacy. Whatever money the Chinese goverment spends is to protect the territorial integrity of the country. The Chinese people won’t have a problem with that, so no harm to reveal such “slush fund”, if it even exists at all.

12

Actually, the PRC government had claimed it would not use its foreign money reserve for political clout… And yes, they can do whatever they want with their money, but there are too many needs inside the country -starting with a comprehensive health system, one that does not facilitate buying off blood that makes mass AIDS contagion, or product quality assurance that stops local consumption and international export of tainted goods… Me thinks.

In a country were even the air pollution index is a state secret, are we talking about the benefit of the party cadres or the chinese people in general here? Not only Chinese people are happy to see the country grow and prosper; but don’t let the power get to their heads and trip over beacuse they are looking at the stars and not at the ground. If people do not want to be part of the “territorial integrity”, it is because of fear: fear of corruption, of injustice, of losing one’s life’s work to authoritarians. That is true in China, Taiwan, anywhere. Dollar diplomacy was wrong because it fed corruption. If the PRC does not see that, and plays the same game, are they showing hubris thinking they will not meet the same sticky end or are they being silly and ignoring the lessons from Taiwan?

13

That’s just diplomatic speak. Of course on the record leaders have to say nice things like that, but people all know better. Of course foreign aids are used for political purposes. This is not really something to get defensive about. Other countries do it too. I’m not naive enough to think that you’re only suppose to give out money soley for altruism and not supposed to expect something in return.

As for whether those money could have been better spent. Who knows? Here’s the thing, the dollar diplomacy money are budgeted so it’s not like the Chinese government is taking money away from elsewhere. And the money goes to achieve a goal that both the government and the people want, soverignty and territorial integrity. It would like asking if China should have hosted the Olympics or have a space program because those money could be better spent on education or health care.

14

Money from the Olympics and the space program will come back. Those are investments.

Diplomatic funds given to corrupt offficials are bad investments. They will not come back, and as Taiwan has apinfully learned, do not guarantee loyalty.

15

[quote=“Icon”]Money from the Olympics and the space program will come back. Those are investments.

Diplomatic funds given to corrupt offficials are bad investments. They will not come back, and as Taiwan has apinfully learned, do not guarantee loyalty.[/quote]

Hate to say it, but you are wrong…

Money for the Olympics was thrown out because China kept foreigners away. Space Program, it is good to have someone else doing investment in those areas…

Now… diplomatic funds given corrupt officials are always good investments - just be smart on how you give them… give them money in form of contracts that lay exclusivity for Chinese companies, and then you have good investment - give the money without any control and they you are just throwing it away.

Remember, Honeywell and companies like that are big in some countries because the funds that were churned into those countries paved the way for incredible contracts: “like we lend you money to buy our things, then you pay us back with big interest…”

16

My only point here is that check diplomacy is like two lovers competing for the favors of a wh***. Since the b**** in question will follow whoever pays more, what is the point of paying through the nose? A gentleman’s agreement -or better still, find a cheaper one, or one that doe snot charge- is a better coice, or rather, a better investment, as it would be even more reliable. This is a case where the more you pay, the more you lose, and no guarantee they will give you back and favor -CR just sent a 500 million plus Chinese business deal down the drain.

17

That’s just diplomatic speak. Of course on the record leaders have to say nice things like that, but people all know better. [/quote]
Or at least, in the case of the fuckers in Beijing, the people know better. Even you now, it would seem.
Its not diplomatic speak, either. It’s bald-faced lies. Another of the notable character traits of those slimy douchebags. Still, its good to see that even the commie toadies so readily admit to their masters’ sliminess. :laughing:

18

Reading about the recent melt down in Wall Street. Seems like people are hoping for the PRC to invest some of their trillions in the US banking system.

I wonder what the PRC will expect of the US in return…US distancing themselves from the ROC.

700 billion for Taiwan…interesting. Makes 300 million look like a bargain.

19

Oh what a tangled web…

chinapost.com.tw/taiwan/nati … -I-jen.htm