Honduras’ decision to sever diplomatic ties with Taiwan in favor of establishing diplomatic relations with China was motivated by economic necessity and Taiwan’s refusal to increase financial aid. According to Honduran Foreign Minister Eduardo Reina, Honduras had requested that Taiwan double its annual aid of $50 million and explore “realigning” its $600 million debt to the island nation, but these requests were not met with positive responses. In addition to its energy needs, Honduras has an external and internal debt of $20 billion that it is struggling to service. These economic challenges led to Honduras’ decision to establish diplomatic ties with China.
Economic necessity and Taiwan’s refusal to increase financial aid
Honduras’ President Xiomara Castro announced on Tuesday that she had instructed Reina to “undertake the official opening of relations” with China, which would sever the country’s longstanding diplomatic relationship with Taiwan. Honduras is one of the poorest countries in Central America, with almost 74% of its nearly 10 million population living in poverty. Reina said Honduras had proposed “more important relations given the great needs of the Honduran people,” but Taiwan had refused.
Honduras had asked Taiwan to double its annual aid of $50 million and also explored “realigning” its $600-million debt to the island nation, but did not receive positive responses. Last year, Honduras paid $2.2 billion and must pay another $2.3 billion this year for its external and internal debt, which amounts to $20 billion, according to the top diplomat.
Honduras’ switch to China
Reina said that Honduras’ decision to establish diplomatic relations with China was motivated by the country’s need for mechanisms for greater investment and commerce. According to Reina, “171 countries in the world have relations with continental China” and the economic reality was that Honduras “had to take that decision.” The switch continues a recent trend in the region, with Nicaragua, El Salvador, Panama, the Dominican Republic, and Costa Rica all switching diplomatic recognition to Beijing.
Taiwan’s Foreign Ministry said in a statement that Reina’s latest comments “did not fully reflect the communication between the two sides,” and that Taiwan “will never compete with China for cash diplomacy.” Taiwan considers itself a self-ruling democratic island, while China regards it as a part of its territory to be retaken one day by force, if necessary. Under Beijing’s “One China” principle, no country may maintain official diplomatic relations with both China and Taiwan.
Honduras’ decision to establish diplomatic relations with China is a significant move for the country, which has struggled with high levels of poverty and debt. While Taiwan has been a longtime ally and provided significant financial aid to Honduras, the country’s economic challenges and its need for greater investment and commerce led to the decision to switch diplomatic recognition to Beijing.