The Scrooge effect: Taiwan's economic diplomacy toward Central Europe, 1988-2005

Abstract

This article examines Taipei's evolving diplomatic goals toward post-communist Central Europe, defined as encompassing Czechoslovakia (the Czech Republic and Slovakia), Hungary, and Poland. It argues that Taiwan pursued economic diplomacy toward Central Europe, aiming at either identifying new diplomatic allies or, if this primary objective proved impossible to achieve, establishing semiofficial "substantive" relations with the Central European nations. It was intended that Taiwanese economic diplomacy in the post-communist region should take the form of trade and aid (i.e., grants, soft loans, investments, technical assistance, and humanitarian aid). In practice, however, it consisted chiefly of promises of economic assistance and occasional soft loans, dispensed in exchange for particular political concessions. Such a quid pro quo policy succeeded in generating "substantive" relations with the region, which engendered neither the political nor economic cost of alienating China. It failed, however, to entice Central European nations into a diplomatic partnership or sustain their support for Taipei's efforts to expand its international space, as such moves would have explicitly recognized Taiwan sovereignty and provoked diplomatic and economic retribution from China. Given a multitude of unrealized grand economic projects and the relative insignificance of approved economic aid, the Central Europeans were well aware that Taiwan was unlikely to compensate them for any economic losses they incurred through their support-implicit or explicit, bilateral or multilateral-of Taiwanese sovereignty claims. Taiwanese economic diplomacy in post-communist Central Europe, therefore, demonstrated the limitations of a foreign policy strategy based on negligible economic assistance in advancing Taipei's diplomatic objectives.