The Central American Parliament (PARLACEN) voted on Monday to expel Taiwan from the regional body. The decision is a symptom of the increasing deterioration of democracy in the region. It also evinces the growing influence of the People’s Republic of China and the Chinese Communist Party in Latin America.
In June 2022, Nicaragua’s dictatorship assumed the General Secretariat of the Central American Integration System (SICA), the most important regional body. Ever since, Nicaragua’s Marxist dictator, Daniel Ortega, has had only two agenda items: bringing the Russian and Chinese regimes closer to Central America and anchoring these powers politically and militarily in the region.
In April of this year, Ortega invited Russian Foreign Minister Sergei Lavrov to Nicaragua to formalize Russia’s entry into SICA as an observer. The diplomatic operation failed. In a last moment decision, the Central American leaders determined that it was not convenient to formalize this new membership in the context of Russia’s unprovoked, aggressive war in Ukraine — but only for the moment.
Although Russia was temporarily banned from SICA, Ortega has promoted a dangerous alliance with said superpower, allowing Russia to offer anti-drug police training courses to officers from all over Central America.
But to return to Taiwan, the small Asian island is the largest shareholder of the Central American Bank for Economic Integration (CABEI), the most power financial institution in the region. CABEI President Dante Mossi has said that Taipei’s financial impact dwarfs any trade partner from any other country in Asia, including mainland China.
Of the more than $16 billion in loans granted by CABEI in the last four years, 11 percent came from Taiwan and were essential to maintaining its AA+ sovereign credit rating.
Of the 22 countries that once recognized Taiwan as a sovereign nation, only 12 maintain diplomatic ties at the highest level. In Central America, Belize and Guatemala are the only ones loyal to Taipei, but even this could change very soon.
China has built a reputation for low wages, poor-quality products, authoritarianism and human rights violations, including genocide. But Central American leaders, whose region has largely been left out of the economic miracle brought about by openness and by world trade, are increasingly looking to Beijing and its false promises as an alternative.
Take Nicaragua. After nearly two years of bilateral relations, it has become clear that China buys little from Nicaragua but sells a lot to it — 92 times as much, to be exact. In 2022, exports to China totaled $15.16 million dollars; imports from China were $1.39 billion.
China is also colonizing Costa Rica’s market, selling $3 billion dollars into it while buying just $436 million from it, in the usual style that has long characterized China’s trade dealings with the U.S.
China has big plans for Latin America. In the long term, it will continue to have a negative impact on Central American businesses and companies, as well as the region’s political freedoms. And unlike Taiwan, the regime of China’s leader, Xi Jinping, does not give anything for free. Nicaragua has acquired more debt, — $60 million for a poor social housing project and a fleet of overpriced, low-quality buses.
Senate Foreign Relations Chairman Bob Menendez (D-N.J) and ranking Republican Jim Risch (R-Idaho), along with House Foreign Affairs Chairman Michael McCaul (R-Texas), issued a statement to “strongly condemn” PARLACEN’s decision to expel Taiwan and admit China.
The atrocities of the war in Ukraine have, unfortunately, reduced U.S. focus on Central America. That focus is badly needed right now, as it is having a negative impact in the areas of migration, political turmoil and Chinese interference.
Taiwan still clings tooth and nail to Central America, maintaining a strong presence in CABEI and SICA. China has not yet won, and Taipei is not giving up.
But the increasing presence of China in Central America is bad news. It is urgent that the most powerful nation in the world pay attention to its own backyard.
Arturo McFields Yescas is a former Nicaraguan ambassador to the Organization of American States, an exiled journalist and a former member of the Norwegian Peace Corps.
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