The announcement by the government of President Juan Carlos Varela of the severing of diplomatic ties between Panama and Taiwan was of monumental importance both to this region and Belize in particular. In an address to the nation, President Varela announced the breaking of immediate diplomatic ties and that the severing of ties was the correct path for his nation and that of China.

The possibility of mending this relationship is almost non-existent since China, regardless of not having formal diplomatic relationship with Panama before this announcement, however shared close financial ties with Latin America’s financial powerhouse. The fact that China is also the second largest customer to the Panama Canal and the largest supplier of merchandise to the city of Colon’s Free Zone was, I am sure, a huge deciding factor. Taiwan as expected came out with a swift and hard diplomatic statement condemning the move and announced that it would immediately cease all bilateral projects, pull its diplomatic staff and technical advisors, essentially closing its embassy. This is a monumental blow for Taiwan.

Taiwan and mainland China have long since been at odds ever since China split during the 1949 civil war which saw the government of China’s one time leader, Generalissimo Chiang Kai-Shek, being driven to the island by Communist forces loyal to Mao Zedong. The island and mainland never reconciled, with China still claiming it as a part of the country and Taiwan trying to assert recognition in the international community.

What started out as a military conflict in 1949 has now become a diplomatic one with both governments practicing “cheque book diplomacy” to woo for the most part poor, Third World nations to their side. The United States for the most part has always chosen to maintain a more or less neutral approach in the conflict and has not recognized Taiwan’s sovereignty as a state, but yet maintains a strong relationship with the island and is by far its largest arms supplier. Democratic Taiwan remains to the US as a strong counterbalance in the region and literally at the doorsteps of Communist China, a fact the Chinese absolutely hate. The US, however, maintains diplomatic, financial and huge trade relations with China.

The prompting of Panama to break its relationship with Taiwan is an easy one. With the perceived waning of US global influence, China is seeking to assert itself as a global player and, if not a real superpower, to fill the void left by the Soviet Union which has not been completely filled by Russia. While over the previous years there has been a closer relationship at the state level between Taipei and Beijing, incoming Taiwanese President Tsai Ing-Wen, who assumed office in May 2016, has been a harsh skeptic of closer ties with Beijing and has not endorsed the idea of Taiwan and China forming part of a larger single Chinese nation.

Mainland, on the other hand, since President’s Ing-Wen election has increased its drive to isolate Taiwan in the international community and Panama is the first casualty of that war. Expect more to possibly come.

With only 20 countries now formally recognizing Taiwan’s right to statehood which include; Kiribati, Nauru, Solomon Islands, Republic of the Marshall Islands, Republic of Palau, Tuvalu, Burkina Faso, Kingdom of Swaziland, Holy See, El Salvador, Haiti, Nicaragua, St Kitts & Nevis, St Vincent & the Grenadines, Dominican Republic, Guatemala, Honduras, Paraguay, St Lucia and Belize, we can expect the global diplomatic “chessmanship” to intensify. Panama was a very big jewel in the crown of Taiwan. Panama is no doubt a huge gain for China.

What was a quest to legitimize both state’s causes has become a gain for the nations they seek to garner support from. Ideologically the Taiwan-China issue is of little consequence to states who are being courted for support. This is pretty much a case of cash diplomacy. So far China seem to be gaining the upper hand, but this places those nations like Belize who are the few in support of Taiwan in a far better standing since now their support counts even more. Rather than being just one of a long list of nations that support China, they have now become that cherished list that Taiwan needs. Both states will continue this diplomatic musical chairs around the globe for their own selfish agenda. The enticement packages will include low interest loans, debt forgiveness, budget support, foreign investment, bilateral cooperation projects and technical advisors.

The true fact is that in this global game the support states seldom gain, since nothing comes for free and ultimately both Taiwan and China will want their pound of flesh. Taiwan and China are two states with limited natural resources and they are looking to diversify the huge amount of cash reserves that they have by any means. China wants added global influence and the isolation of Taiwan, while the latter seeks recognition and ultimately statehood.

The 20 nations that support them have pretty much the same thing in common, rich with natural resources but are poorly managed and always in need of raw cash. With both China and Taiwan being known to exercise limited checks and balances with the monies that they freely give out, expect the cash cow to be milked even more and the donor countries to say less. China, which has a record of poor compliance rating with human rights, corruption and prosecution of political dissidents, is poised to give Taiwan a real run for its money.

It’s all about the people!!!!