Taiwan's loss of Costa Rica may herald domino effect

By Ralph Jennings

TAIPEI (Reuters) - Costa Rica's break in diplomatic ties with Taiwan this week could start a trend in Central America, which has long recognized the self-ruled island but now sees benefits from rival China's huge economy, experts say.

Leaders on the seven-country subcontinent from Panama to Guatemala could reconsider their historic ties with Taiwan, which competes with China for world recognition.

"Any country, if it wants to play a role in international or regional politics, has to switch sides to China," said George Tsai, a professor at the National Chengchi University Institute of International Relations in Taiwan.

Taiwan allies stand to lose economically if they remained cut off from China, scholars say, and point to Beijing's allies in Africa, for example, who have joined its hunt for oil.

Higher offers of direct aid may also motivate Central American nations to choose China over Taiwan, Tsai said.

On Thursday, China and Taiwan announced that Costa Rica, a Taiwan ally since 1944, had switched sides in the latest blow for the island that Beijing claims as its own and which now has only 24 allies left in the world.

Taiwan's Foreign Minister James Huang said China had given Costa Rica an "astronomical" sum to switch and that Taiwan lacked the resources to compete with Beijing leaders.

Later in the day in Beijing, a Foreign Ministry spokeswoman urged other Central American countries to split from Taiwan.

Taiwan sees its partners overseas, mostly small developing nations, as keys to its legitimacy. China regards self-ruled Taiwan as part of its territory rather than as a country with the right to practice diplomacy.

Analysts also said there had been an easing of U.S. pressure on the Central American nations to maintain ties with Cold War ally Taiwan in recent years and this could free them up to switch sides.

A domino effect "is possible, but not confirmed," said Jin Canrong, an international studies professor at China People's University in Beijing.

But diplomatic switches take time, and if China claims more than one country per year it will look like a bully in the world's eyes, said Lo Chih-cheng, chair of the political science department at Soochow University in Taiwan.

"It's not just a problem of Taiwan's," Lo said. "China's activities in other countries are a concern to the world."