Sun, Mar 03, 2019 page6

• The Nicaraguan loan controversy

  • By Juan Fernando Herrera Ramos
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  On Feb. 20, the Taiwanese government confirmed that it had offered a loan of US$100 million to Nicaragua. The objective of the loan is to help the Central American government rebuild itself from riots that have lasted for months and have damaged the country.

  Under normal circumstances, the decision to lend money to one of the countries that maintains official ties with it would not be controversial, but the ongoing political crisis in Nicaragua has created debate.

  The situation in Nicaragua gained worldwide attention when protests against the Nicaraguan government erupted in April last year in response to changes made to the national social security system. They escalated after security forces used excessive force to suppress protesters.

  The government reversed said changes, but other issues plaguing Nicaraguan President Daniel Ortega’s administration, such as accusations of corruption, presidential power grabs and suppression of the media, kept the protests going for months.

  This crisis has already left more than 300 people dead and more than 2,000 people have been injured. More than 80 students have been expelled from National Autonomous University of Nicaragua, while opposition leaders and journalists have fled the country for fear of retribution.

  Ortega has dismissed the protesters’ calls for him to step down after the violent action his administration took in suppressing their freedom of speech.

  Many countries and organizations have condemned the situation and accuse Ortega of dictatorial practices.

  The US has already taken action by imposing sanctions on members of Ortega’s administration, including his wife, Rosario Murillo, who is the vice president of the country and has been accused of corruption and human rights abuses.

  The sanctions ban banks and other entities from doing business or carrying out transactions with the targeted Nicaraguan officers, who also had their assets that fall under the US’ jurisdiction frozen.

  This situation puts Taiwan in an unusual position, as its actions are at odds with the US. Part of the objective of the sanctions imposed on Nicaragua, is to prevent it from accessing multilateral loans.

  Even though there has not yet been a reaction from US President Donald Trump’s administration, it might not take kindly to Taiwan supporting a government that it is trying to economically choke.

  The loan and other shows of support could be seen as a risky bet, considering that Taiwan has a special interest in supporting the US.

  The loan might also have other negative consequences. The majority of Nicaraguans are not happy with the government and, even though the possibility of Ortega leaving the presidency and calling for elections ahead of time seems unlikely, once his term is over, the newly elected leader might not like the support Taiwan showed the present administration.

  Last year, Nicaraguans living in Taiwan gathered to show their support for the protesters in their home country.

  That, combined with all the media coverage that Nicaragua has received over the past year and the accusations that Ortega’s administration has abused the rights of its citizens, makes it hard to understand why Taiwan would show support for Nicaragua.

  However, there is another important aspect that needs to be taken into consideration: China.

  Last year, Taiwan lost three of its diplomatic allies: El Salvador was the last one to switch ties, following Burkina Faso and the Dominican Republic. This has reduced the number of countries that recognize Taiwan as an independent nation to 17.

  There is a big possibility that Taiwan made the decision out of fear of alienating one of its remaining diplomatic allies, because refusing to collaborate with the administration in Nicaragua could cause a rupture in relations.

  It is important to note that even before the protests in Nicaragua started, there were rumors soon after Panama broke relations with Taiwan in 2017 that a switch in ties might come.

  In that year, Forbes published an article explaining why Nicaragua was at the top of the list of the countries that could break ties with Taiwan.

  The article mentioned reasons that Taiwan-Nicaragua relations were in peril, including difficulties in coordinating a visit from President Tsai Ing-wen (蔡英文) in January of that year.

  Another important reason was that in 2013, the Nicaraguan government had flirted with the idea of letting China build an interoceanic canal that would connect the Pacific Ocean to the Caribbean at an estimated cost of US$50 billion.

  However, one could argue that the most powerful reason to suspect that Nicaragua would be willing to switch ties to China was that the same president had previously done so.

  Ortega broke relations with Taiwan and established them with China in 1985 and they were later restored by a right-wing government, which made many people think that after returning to the presidency he could switch to China again.

  These factors might have played an important role in Taipei’s decision to support Ortega, even when his actions in Nicaragua seem to contradict the very values that Taiwan seems to cherish so much: respect for human rights, freedom of speech and democracy.

  Whether providing this loan to Ortega was the best choice for Taiwan or will have negative and lasting consequences for Taiwan-Nicaragua relations is something that people will have to wait to find out, but to take one side or the other, it is necessary to consider what might have been the reasons behind the loan.

  Juan Fernando Herrera Ramos is a Honduran lawyer residing in Taiwan with a master’s in business administration.
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