Honduras’ abandonment of Taiwan raises major geopolitical concerns

Honduras’ decision to break diplomatic ties with Taiwan in favor of China is another sign of growing Chinese influence in Latin America.

For decades the Asian superpower pumped billions of dollars into investment and infrastructure projects across the region. Now, as geopolitical tensions between China and the Biden administration escalate, that spending has paid off.

Honduras’ decision was the second foreign policy coup in a week for China, which last week mediated a deal between Iran and Saudi Arabia to re-establish diplomatic ties.

Now only 13 countries will recognize Taiwan. But some left in Latin America, such as Paraguay and Guatemala, pledged on Wednesday to maintain their support for Taiwan.

Honduras’ Foreign Relations Minister Enrique Reina told The Associated Press on Wednesday that Honduras is “grateful” for its past ties with Taiwan, but its economic ties to China ultimately prompted his government to cut diplomatic ties.

Reena said, “These are political decisions. The world is moving in this direction.” “It is a complicated decision, we understand, but the foreign policy of Honduras must benefit the people. We are confident that this step will benefit the country.”

The Central American nation follows the steps of El Salvador, Nicaragua, Panama and the Dominican Republic in turning their backs on Taiwan.

Honduras’ announcement on Tuesday was a blow to the Biden administration, which has tried unsuccessfully to persuade countries in the region to side with Taiwan. Taiwan, a US ally, has pushed for sovereignty at the same time that Chinese President Xi Jinping has insisted the island remains firmly under its control.

In that sense, Tuesday’s announcement also exemplifies that the US government is “losing its grip” on Latin America, said David Castrillon-Kerrigan, research professor of China-related issues at Colombia’s Externado University.

“For countries, such as Honduras, not recognizing the government in Beijing meant missing out on opportunities,” Castrillon-Kerrigan. The United States “is certainly losing influence on every front, especially on the economic front, but also diplomatically, politically and culturally.”

This has left the island with a dwindling number of allies. Riina told the AP that the Biden administration “must understand and respect” the needs and decisions of Honduras.

But some countries such as Paraguay and Guatemala remained steadfast in their support for Taiwan. Guatemalan officials reiterated the government’s “recognition of Taiwan as an independent nation that shares democratic values”.

Over the past two decades, China has gradually carved out a niche for itself in Latin America by pouring money into the region, investing in major infrastructure, energy and space projects.

According to the United States Institute of Peace, between 2005 and 2020, the Chinese have invested more than $130 billion in Latin America. Trade between China and the region has also increased, which is expected to reach over $700 billion by 2035.

That investment has translated into China’s growing power and growing number of allies.

In Honduras, this has come in the form of the construction of a hydroelectric dam project in central Honduras by the Chinese company Sinohydro with about $300 million in Chinese government funding.

Meanwhile, in many countries, the US government has not stepped in with projects of similar size.

While many see the investment as a positive step for nations that often struggle to pull together funding for development, some, such as June Teufel, professor of political science at the University of Miami, see the rise in Chinese power. worry about the long-term effects of ,

Taufel said China is using that new influence as a “diplomatic weapon”.

In many countries in Africa and Latin America, Chinese investment has been affected by rising debt in developing countries. In many cases, repair infrastructure projects can only be undertaken by Chinese companies, Teufel said, leading to higher bills.

“It’s a bit like a drug dealer saying to a potential customer, the first dose is free,” Teufel said. “It leaves another country out of Taiwan, which is something it has wanted to do for a long time, depriving Taiwan of all its allies.”