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Taiwan needs an Indo-Pacific policy involving the Pacific Islands

Taiwan needs an Indo-Pacific policy involving the Pacific Islands

Source:Taipei Economic and Cultural Center in Chennai

Taiwan needs to explicitly place its New Southbound Policy within the broader context of its Indo-Pacific policy. By extension, Taiwan needs to review, reevaluate and revamp its strategy for engagement with the Pacific Island countries.

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Taiwan needs an Indo-Pacific policy involving the Pacific Islands

By Marcin Jerzewski
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Five years since the initial announcement of the New Southbound Policy—President Tsai Ing-wen’s (蔡英文) flagship foreign policy initiative aimed at enhancing Taiwan’s regional cooperation—the nation has seen considerable dividends, particularly in trade and education. At the same time, the policy’s quinquennial should serve as an opportunity to reflect upon and critically evaluate impact, effectiveness, efficiency, and the scope of the initiative. 

Recognizing Taiwan as an important stakeholder in the emerging dynamics of the Indo-Pacific region, the nation ought to explicitly place its New Southbound Policy within the broader context of its Indo-Pacific policy. By extension, Taiwan needs to review, reevaluate and revamp its strategy for engagement with the Pacific Island countries, which have been inexplicably excluded from Tsai’s New Southbound Policy. After all, there is no Indo-Pacific without the Pacific Islands.

(Source: Taipei Economic and Cultural Center in Chennai)

Out of fifteen remaining diplomatic allies of Taiwan, four—the Marshall Islands, Nauru, Palau, and Tuvalu—are Pacific Island countries. While the cross-strait rivalry has been transposed onto the Pacific Island countries—Kiribati and Solomon Islands switched diplomatic recognition from Taiwan to China in 2019—Taiwan remains an active player in the region. As explained by Michael Nguyen and Jonathan Pyrke of the Lowy Institute, per capita, Taiwan spends more than twice as much as China on Pacific aid.

Even though Taiwan has been unable to eclipse the sheer monetary value of Chinese aid, the nation successfully distinguishes itself from Beijing by adopting a distinct approach to developmental cooperation. The Chinese approach to international engagement is state-centered and dissimilar from the society-centered perspective preferred across the strait. 

By pursuing a society-centred approach with a strong soft power touch, while simultaneously underscoring the importance of human development, Taiwan has succeeded to effectively fill in the niche largely ignored by China and bolster its soft power projection capabilities. As claimed by Foreign Minister Joseph Wu (吳釗燮) during his remarks at the World Affairs Council in Los Angeles, Taiwan’s value-based and human-centric “warm power” trumps authoritarian “sharp power”

In the Pacific Islands, Taiwan’s technical missions focusing on capacity building in agriculture, aquaculture, and horticulture have served as a particularly perspicuous manifestation of Taiwan’s people-centric approach to developmental cooperation. Instead of prioritizing grandiose hard infrastructure projects, Taiwan contributes to the establishment of a strong soft infrastructure foundation for tackling issues such as food security, improving nutrition, and promoting sustainable agriculture.

Nevertheless, Taiwan’s presence in the Pacific Island countries largely flies under the radar. In a recent interview with Maxwell Wappel of Taiwan NextGen Foundation, Papua New Guinean Trade Representative to Taiwan Tommy Kambu Kunji averred that “cooperation has been a very productive and successful one in many ways, but one that has not received the exposure, publicity and applause it deserves due to undue foreign political influences.”

Regrettably, Taiwan has failed to effectively capitalize on its developmental experience to establish a strong competitive identity. While the society-centered approach to engagement with the Pacific Islands has parallels with the people-centric New Southbound Policy, Taiwan has fallen short in articulating how its often remote, grant-based initiatives in the Pacific region collegiate with the overall objectives of Taiwan’s involvement in the Indo-Pacific. 

Additionally, the current footprint of Taiwan across the Pacific Islands is defined predominantly by developmental cooperation and people-to-people ties. While these areas of cooperation are certainly important and conducive to boosting Taiwan’s soft power, its trade and economic relations with the Pacific nations remain negligible. 

As remote island economies, Pacific Island countries share many challenges—they are characterized by low levels of economic diversification, isolation from large markets, and pronounced vulnerability to external shocks. Yet, these issues should not fully obscure potential opportunities from economic engagement with the region. According to the predictions of the Asian Development Bank, growth for the Pacific is expected to improve to 3.8% in 2022. Taiwan should thus explore options spurring more vigorous economic cooperation and expanding supply chain links with the Pacific Islands through enhancing regional connectivity.

(Source: Taipei Economic and Cultural Center in Chennai)

In a conversation with the author, H.E. Dilmei L. Olkeriil, Ambassador of the Republic of Palau to Taiwan, remarked that, “none of the countries included under the New Southbound Policy are Taiwan’s diplomatic allies; while Palau has consistently supported Taiwan in the UN and other international structures, it is still excluded from the flagship policy.”

Ambassador Olkeriil’s statement exposes not only normative ramifications of Pacific Islands’ exclusion from the New Southbound Policy—inviting questions as to why diplomatic allies are not targeted under this flagship mechanism—but also its more pragmatic dimension. This is because the New Southbound Policy—with its four key links: soft power, supply chains, linking regional markets, and people-to-people ties—could be an appropriate tool for addressing the two key issues hampering progress in augmenting relations between Taiwan and the Pacific—limited competitive identity and lagging economic cooperation.

The New Southbound Policy does not exist in a vacuum—as a matter of fact, the initiative can be viewed within the broader context of policies aimed at enhancing regional connectivity across the Indo-Pacific. John Chen-Chung Deng (鄧振中), Minister Without Portfolio and Office of Trade Negotiations head, asserted that, “with the US putting forth its Indo-Pacific Strategy and South Korea announcing its New Southern Policy, Taiwan is heading in the right direction with its New Southbound Policy.” 

India’s Act East Policy, South Korea’s New Southern Policy, and the US Free and Open Indo-Pacific initiative all demonstrate that the strategies, goals, and areas of interests of key players in the region overlap to a large extent. Consequently, understanding the role of Pacific Island countries in these policies may inform the roadmap for broadening and deepening Taiwan’s cooperation with these island nations. 

Interestingly, while Seoul states that the countries which are prioritized as the first tier of “NSP target countries” are those in Southeast Asia and India, it demonstrates a considerable degree of flexibility in demarcating the geographical scope of cooperation under the policy. Since the announcement of South Korea’s NSP, the Blue House has also taken the initiative to deepen its ties with Pacific Island countries, frequently by engaging other regional stakeholders in multilateral frameworks.

The cooperation between Seoul and Wellington serves as a case in point. During his visit to Seoul in October 2019, the then Foreign Minister of New Zealand Winston Peters asserted that, “The principles and objectives of Korea’s New Southern Policy align with New Zealand’s Pacific Reset.” On the same occasion, Minister Peters and his Korean counterpart Kang Kyung-wha declared that the two countries would jointly design and implement capacity-building projects in the Pacific Islands.

Additionally, Washington also appears to regard Pacific Island countries as an extension of Korea’s NSP. The launch of the inaugural US-ROK Indo-Pacific Strategy-New Southern Policy Dialogue in August 2020 has brought about the decision to strengthen Pacific Islands cooperation. Additionally, joint statements by the Seoul and Washington governments have explicitly mentioned South Korea-US cooperation in the areas of women’s empowerment, climate crisis mitigation, public health, and disaster response and preparedness in the Pacific Island countries. 

This balanced South Korean model might be particularly attractive for Taiwan. It might be helpful to visualize it as consisting of two circles—the inner circle, which includes core target countries in ASEAN and India, and the expanding circle, which incorporates countries targeted through multilateral initiatives pursued in synchrony with the New Southern Policy. Pacific Island Countries are included in the expanding circle—positioning South Korea’s NSP as an anticipatory geography of the broader Indo-Pacific region. 

Another feature of the South Korean model is the multilateral approach to cooperation with the region—as evidenced by joint initiatives with New Zealand and the US. Taiwan has already gained experience in linking its own NSP with regional strategies of its partners, including Australia, Japan, and the US. In particular, the Global Cooperation and Training Framework has effectively enabled Taiwan to contribute to collective problem solving and share its expertise with countries in the Indo-Pacific, including NSP target nations. As Australia, Japan, and the US are also important stakeholders across the Pacific Islands, greater synchronization of Taiwan’s outreach to the island countries and the NSP would allow Taiwan to capitalize on its experience to date in pursuing multilateral engagements in the Indo-Pacific.

Taiwan is already engaged in multilateral cooperation with the region, yet the recent crisis of Pacific regionalism accentuates the importance of revising Taiwan’s strategy for engagement with the region. Perhaps most importantly, Taiwan has signed a cooperation agreement with the Secretariat of the Pacific Islands Forum (PIF)—the Pacific’s most influential regional body—in 2019. Yet, in 2021, five countries of the Micronesian subgrouping—including Taiwan’s allies Marshall Islands, Nauru, and Palau—announced their departure from the organization following a bitter leadership dispute. As the withdrawal process is expected to take at least a year, calls to the Micronesian nations to reconsider their decision remain steadfast. Nevertheless, this prospect of a massive walkout has instigated instability in an already vulnerable region.

Despite the internecine altercations Taiwan maintains that PIF remains a useful format for engaging with the Pacific Islands. In the words of Taiwan’s Deputy Foreign Minister Tien Chung-kwang (田中光), “As a development partner of the PIF, Taiwan stands for the unity and harmony of the region.” Nevertheless, excessive reliance on PIF may prove to be myopic, especially given the prominent role of Taiwan’s allies in the withdrawal process. Consequently, now might be the most optimal time for the Taiwanese government to institute linkages between its engagement with the Pacific Islands and the established New Southbound Policy framework.

(Source: Taipei Economic and Cultural Center in Chennai)

Recognizing the broader context of geopolitical anxiety in the region, it would be credulous to argue that Taiwan’s efforts to expand ties with the Pacific Island countries could remain uncontested. On the one hand, the internecine discord within the PIF, as well as geostrategic competition between China and the US and its allies and partners (particularly Australia, Japan, and New Zealand) constitute an important challenge to stability in the region. On the other hand, limited infrastructural development and underdeveloped industrial base may be seen as deterrents to including the Pacific Islands in existing economic cooperation schemes.

Yet, the New Southbound Policy has largely proven to be a resilient tool in contexts characterized by similar challenges, even if on a different scale. Taiwanese stakeholders effectively implement flagship projects under the aegis of the New Southbound Policy in contexts where China also seeks to expand its footprint through the Belt and Road Initiative. Additionally, the economic pillar of the policy takes into account projects that could address some pivotal challenges to economic development in the Pacific Islands, including infrastructure construction cooperation and systems integration.

Ambassador Olkeriil asserted that, “The government of Taiwan should subsidize regular cargo ships to enhance trade with the Pacific Islands.” Interestingly, this suggestion echoes policy ideas put forward by Taiwanese analysts. Recognizing high transportation costs as a major obstacle to strengthening supply chains across the Pacific Islands, Yeh Chang-Chen (葉長城), Research Fellow at Taiwan WTO & RTA Center, Chung Hua Institution for Economic Research, advocated for expanding developmental cooperation programs aimed at strengthening logistics and connectivity infrastructure among Taiwan’s Pacific ally nations. 

Taiwan is now well equipped to consolidate its existing relations with its diplomatic allies. Moreover, a comprehensive strategy of engagement with the Pacific Islands could be further bolstered through its clear synchronization with the New Southbound Policy—a flagship instrument for deepening people-to-people and economic ties. As Ambassador Olkeriil aptly commented, “If Taiwan can continue to do business with China, why can’t they come to the Pacific Islands?”


About the author:

Marcin Jerzewski (葉皓勤)

Marcin Jerzewski is a Research Fellow at Taiwan NextGen Foundation, where he leads the New Southbound Policy research program. Marcin earned his Bachelor of Arts (Honors) in Political Science and Chinese Studies at the University of Richmond, and was an MOE Taiwan Scholar in the International Master’s Program in International Studies, National Chengchi University. 


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