On 10 December Nicaragua’s government led by President Daniel Ortega announced that it had established diplomatic relations with mainland China and severed ties with Taiwan.
Analysis:
Nicaragua has become the fifth country in the sub-region, historically a bastion of international support for Taiwan, to sever ties with Taipei in favour of Beijing in recent years. This is a major coup for Beijing in its quest to secure unanimous support towards recognising the People’s Republic of China (PRC). The move is not a huge surprise given the Ortega government is seeking much-needed foreign assistance amid growing isolation on the international stage following the 7 November election which produced a re-election victory for Ortega but was widely slammed as a sham – this isolation was evidenced in Nicaragua’s recent decision to leave the Organisation of American States (OAS). It comes amid ever-deteriorating ties with the US, its most important trade ally, which is threatening further sanctions including Nicaragua’s possible suspension from the US-Central America Free Trade Agreement (Cafta).
- The decision was announced following a meeting in Tianjin, a city near Beijing, between China’s deputy foreign minister Ma Zhaoxu and Ortega’s son, Laureano Ortega, a presidential adviser on investment. According to a joint communiqué, the Nicaraguan government recognises the existence of just one China (that of the PRC) and that “Taiwan is an inalienable part of China’s territory”.
- Taiwan's foreign ministry issued a statement expressing “extreme regret” in response to Nicaragua’s “unilateral” decision. According to the most recent (June 2021) report on foreign cooperation by Nicaragua’s central bank, Taiwan was one of Nicaragua’s main bilateral donors in 2020, providing US$28.0m of the total US$245.67m in bilateral assistance last year.
- Nicaragua’s decision follows similar decisions by El Salvador and the Dominican Republic in 2018, Panama in 2017, and Costa Rica in 2007. It leaves just 14 countries in the world as allies of Taiwan, including Guatemala, Honduras, Belize, Haiti, St Kitts & Nevis, St Vincent & the Grenadines, and St Lucia in Central America and the Caribbean.
- Nicaragua had previously cut ties with Taiwan in 1985 before re-establishing relations in 1990 under then President Violeta Chamorro (1990-1997). Speculation had earlier emerged regarding a possible switch in Nicaragua after the Ortega government awarded Chinese firm HKND the US$50bn concession in 2013 to build and operate Nicaragua’s inter-oceanic ‘Gran Canal’ project to link the country’s Caribbean and Pacific coasts – a project which has yet to show any sign of materialising.
- In a statement yesterday in response to Nicaragua’s breaking of relations with Taiwan, US State Department press spokesperson Ned Price said the decision “cannot reflect the will of the people” due to the “sham election”. Indicative of the continuing deterioration in ties with the US, yesterday the US State Department also announced new sanctions on Néstor Moncada Lau, a national security advisor to the Nicaraguan government “for engaging in significant corruption”, linking him to “an import and customs fraud scheme” to enrich government members.
Looking Ahead: Nicaragua’s announcement will draw particular alarm in the US at a time when president-elect Xiomara Castro in neighbouring Honduras has similarly floated severing ties with Taiwan in favour of mainland China in order to address Honduras’s debt, although since winning the 28 November general election her advisors have cast doubt over this pledge.