Foreign policy in Costa Rica:
The international community was shocked in 2007 when Costa Rica, recognized as the Switzerland of Central America for its promotion of democracy and pacifism, decided to establish relations a country of opposite values such as human rights suppression and communism, China. In responses, Taiwan cut its ties with Costa Rica. With its unarmed identity, Costa Rica has always looking to broaden international alliances. This time, however, there were many critics both domestically and internationally. President Arias (2006-2010) responded to the public critics, questing if democracies like the United States found no contradiction in establishing relations with China, then why should Costa Rica?
After all, Costa Rica’s move towards engaging China was not unpredictable. Only three months into his first term (1986-1990) in presidency, Arias made a bold decision to move the Costa Rican embassy from Jerusalem to Tel Aviv. According to Arias, the embassy’s location in Jerusalem kept Costa Rica isolated from the Arab world, and it was time to correct a historical mistake. Plus, he believed that having the Costa Rican embassy in Jerusalem limited Costa Rica’s relations with the Arab world.
The switch of diplomatic relations with Taiwan
On June 6, 2007, president Arias has announced the decision of the government to switch its relations from Taiwan to China after 67 years of stable foreign relations. In the 2007 agreement, China is going to give Costa Rica an additional $130 million in direct economic aid, as well as a two-stage bond purchase.  In this agreement, Costa Rica not only has the recognition of China, but also the support from China to knock on the door of Asia-Pacific Economic Cooperation (APEC) and Security Council of the United Nations.
Arias, the former Nobel Prize winner, claimed that the decision was neither for the short-term economic benefits nor the changes of ideology, but rather a rational foreign policy decision of realism. President Arias also stated that the recognition of new relations with china coincided with the principle and purpose in the UN Charter.
Costa Rica has been able to earn a good reputation and image that has allowed it to use its advantages in the international community by providing effective suggestions ranging from its contribution to disarmament to its role as an environmental sanctuary. Since taking office, President Arias has led the country to taking a more active role in the international arena. As a country without an army, Costa Rica has a higher value of security of the international level. The Costa Rican government believes that ties with China will not only boost the economic development domestically, but more specifically provide a powerful force to eliminate underdevelopment in some rural areas. On an international scale, Costa Rican government has envisioned the deeper integration in the world economywith the mutual communication with Beijing. For example, President Arias wants to get the Chinese support for Costa Rica’s bid for a seat on the UN Security Council.
By 2009, China stood second in terms of trade volume with the Costa Rica, and it stood rank 30 in 2000. (see Table 1.) While Costa Rica now admittedly views China as more beneficial than Taiwan, Costa Rica’s bilateral trade with the East Asian giant began a decade before establishment of formal relations. The exports from Costa Rica to China heavily dominated by computer parts, electronic chips, which allowed the country to achieve a small trade surplus in its relationship with the emerging super power in Asia. This was the only the beginning of the China’s economic benefits for Costa Rica, and the profits stood in stark contrast to what Taiwan could provide. China is recognized as a potential global power, and will be the second super power in the United Nations.That is why Costa Rica also values the embassy in Beijing after the one in Washington. With regards to Taiwan, the country is now concerned that the Costa Rican move will cause a chain reaction in the future of its region.
Costa Rican Relations with Taiwan
Arias had said, “I was always critical of the Taiwanese, and I can say now that I always told them: If you want to have friends in the world, you should be more generous.”
In the late 1960s, Taiwan had relations with almost 70 countries. But China joined the United Nations after Taiwan was expelled from it,and the country lost many allies. As of 2014, Central America and the Caribbean region host 12 of the 22 countries globally which retain ties with Taiwan.Therefore, the loss of a Central American partner was a particularly painful blow for Taiwan’s foreign relations development, and led to the immediate resignation of the Foreign Minister, James Huang. The Taiwanese government has routinely contributeddevelopment aid routinely to create the strong association withCosta Rica over 67 years.Nevertheless, the Costa Rican government began publicly cooling its relations with Taiwan in May of 2007 when the country abstained on Taiwan’s accession in the World Health Organization (WHO). The Costa Rican government’s attempt at rethinking its relations with Taiwan began to receive criticism from the media as a betrayal of democratic principles.
One of the reasons for the longevity of Costa Rica and Taiwan’s relationship was the development assistance the small Asian country provided. The country received $341 million in assistance from Taiwan from2000 to 2005,which wasenough to make it Costa Rica’s second largest source of bilateral cooperation. The majority of resources from Taiwan came in the type of loans, and was allocated intopublic infrastructure. For example, it was Taiwan’s assistance that rebuilt an entire wing of public hospitals in San Jose, which was destroyed in an arson fire in 2004.In addition, Taiwan built a long bridge in order to assist the transportation development from rural to urban areas. However, even with Taiwan’s prosperous economy, it still cannot compete with the huge investments of China. This explains President Arias’s claims about Taiwan losing the game of “dollar diplomacy”; Taiwan’s funds could not compete with those of China.
Chinese-Costa Rican relations
On March 2011, there was a celebration of the new state stadium in San Jose. It was constructed on the previous smaller stadium; the new 35,000-person stadium represents the result of national development. The shape of its roof resembles the appearance of coffee bean, the commodity of which Costa Rica is proudest, demonstrated in modern iconic style. In order to reminisce the “Bird’s nest” Olympic stadium in Beijing, the nick name of the stadium is “Nido Tico” or “Costa Rican’s nest.”The stadium was a symbol of recognition of new relations with China in 2007. In addition, the $100 million stadium, China bought $300 million in Costa Rica bonds, assisted renewal of a Caribbean-bound highway, and facilitated the construction of a major oil refinery. Furthermore, Costa Rica ratified a new free trade agreement with China allowing over 90% of its goods tariff-free entry into the Chinese market in 2011.
Chinese diplomats were very eager to proceed with the negotiation. This was a long awaited opportunity for China, as it turns Costa Rica into a regional case that shows other Central American countries in similar positions the benefits they can get from forming relations with China. The evidence showed that the bilateral trade with China, which has provided more broad economic chance with Costa Rica, has been in effect since 2000. In 2008, they began the China-Costa Rica free trade negotiations during the visit of Chinese President Hu Jintao Costa Rica.The China-Costa Rica FTA features a high degree of the open market. Over 90 percent of goods trade between China and Costa Rica will enjoy zero tariff on a stage-by-stage basis.From that point, China was considered as an important trade partner. The trade links, however, had grown rapidly in the past years even without the official diplomatic relations.
The cooperation and exchange of agricultural technology is promising for China is agricultural development within its huge territory. For Costa Rica, it has the advantage of biodiversity and flourishing plants bred through the weather. Therefore, the research institutions of Costa Rica and China have an agreementto promote cooperation in agricultural science in 2013. Under the mutual agreement, both sides will facilitate the exchange programs forresearchers, increase the scholarships for agriculture students, and enhancefrequency of information exchange on agricultural science and technology. Also, the institutions in both countries will also cooperate to work on research on animals, plant genetics,environmental preservation,pest and disease control,agricultural economy and rural development. This is an ideal opportunity for Costa Rica to maximize agricultural and environmental advantages through the financial support from China.
Costa Rican has also learned a lesson from China after the stadium has finished. Local media reports admired the incredible high-tech stadium, which was finished 3 months ahead before the schedule. The efficiency and industriousness of the Chinese workers has surprised the Costa Ricans. Due to the different geographical areas, Costa Rican was not familiar with Chinese culture. By this chance, they saw how China rises to power with its proactive and diligent attitude, but also they felt how the authoritarianism of China affects the policy. For example: there were only Chinese laborers could enter the construction areas.
Costa Rica has been benefited by both Taiwan and China. Taiwan has offered considerable resources for the development of Costa Rica, and helped them to step on their foothold on the ladder of development for over the past six decades. As one of the few nation states lacking an army, it has carefully protected itself by relying on the support from international community, and also they take advantage of the soft power with its dynamic diplomatic relations.
There are also the new perspective of China which were transmitted by the positive work ethic and efficiency of Chinese laborers who constructed the new stadium. It offered a distinctive picture to modify the previous negative perceptions of China in Costa Rica.
In the future, there will be probably more potential international market development besides coffee and electronics (see Table 2.) for Costa Rica though it is not clear those sectors in Costa Rica might have better chance favored by the huge Chinese market, but it hopes to attack foreign direct investment in the region.
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