VZCZCXRO5573
OO RUEHCN RUEHGH
DE RUEHIN #3704 3040730
ZNY CCCCC ZZH
O 310730Z OCT 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2827
INFO RUEHBJ/AMEMBASSY BEIJING 5848
RUEHMU/AMEMBASSY MANAGUA 0134
RUEHME/AMEMBASSY MEXICO 0048
RUEHUL/AMEMBASSY SEOUL 8199
RUEHKO/AMEMBASSY TOKYO 8161
RUEHCN/AMCONSUL CHENGDU 1485
RUEHGZ/AMCONSUL GUANGZHOU 9667
RUEHHK/AMCONSUL HONG KONG 7068
RUEHGH/AMCONSUL SHANGHAI 0488
RUEHSH/AMCONSUL SHENYANG 5453
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

C O N F I D E N T I A L TAIPEI 003704 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/15/2031 
TAGS: PREL TW NU
SUBJECT: TAIWAN ONGOING CONCERNS OVER NICARAGUAN ELECTIONS 
 
Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d) 
 
¶1.  (C)  National Security Council Deputy Secretary General 
Joanne Chang (Jaw-ling) told AIT on October 25 that Taiwan 
continues to monitor closely the runup to the November 5 
presidential election in Nicaragua.  She expressed concern 
that multiple candidates opposing Sandanista's Daniel Ortega 
seem likely to split the conservative vote and give the 
election to Ortega, resulting in a diplomatic switch from 
Taipei to Beijing.  Chang said Taiwan has taken note of 
recent U.S. statements calling on the Nicaraguan people to 
consider the future of a robust U.S.-Nicaraguan relationship 
when they take to the polls on November 5.  Chang demurred on 
questions about the extent and level of possible support 
Taiwan may be providing to the candidates running against 
Ortega. 
 
¶2.  (C)  Consul General of Nicaragua Armando Miranda told AIT 
on October 26 that Taiwan officials have reassured him that 
Taipei will not pull out of Nicaragua if Ortega wins the 
presidential election and subsequently derecognizes Taiwan. 
According to Miranda, Taiwan plans to convert its embassy 
into an economic trade office and wait until the next 
presidential election because economic investments in 
Nicaragua are too large to walk away from.  Miranda explained 
that Taiwan has given Nicaragua millions of U.S. dollars in 
loans to lay the infrastructure and investment for industrial 
parks that house 17 large Taiwan manufacturers, primarily in 
textiles.  The Taiwan business strategy, added Miranda, has 
been to use Nicaragua and other countries who are signatories 
to the Central America Free Trade Agreement as a springboard 
to the US market. 
 
¶3.  (C)  Pessimistic on the effects an Ortega victory would 
have on Nicaragua, Miranda nevertheless predicted that 
derecognition by Managua would be unlikely to have a domino 
effect on Taiwan's other allies in the region.  Taipei has 
devoted extensive economic and political resources to hold 
onto most of its Central American partners and the loss of 
Nicaragua, resulting from the coming to power of a leftist 
government, would probably be a "special case." 
 
¶4.  (C)  Over the past few years the PRC, acknowledged 
Miranda, has been making very strong overtures to Central 
American countries, especially those having formal relations 
with Taiwan.  Bejiing has focused talks almost exclusively on 
promoting economic development programs and investment 
opportunities for Chinese companies in Central America. 
Mexico has been playing the role of broker between its 
southern neighbors and the PRC.  Miranda said that in 
response Taiwan diplomats have quietly approached their 
allies to express Taipei's apprehension and to emphasize that 
once Beijing secures their recognition, it will not follow-up 
on promises of increased aid and investment. 
 
Comment 
------- 
 
¶5.  (C) A victory for Ortega and a switch in diplomatic 
recognition to the PRC would be another blow to Taiwan 
diplomacy following the loss of Chad earlier this August. 
Taiwan may still enjoy enough economic clout with diplomatic 
allies in Central America to prevent further defections in 
the region and keep Beijing at bay for now.  The loss of 
Nicaragua, however, would bring down the number official 
diplomatic partners to 23, a level precariously close to the 
historical low of 21 reached in the early 1970s.  It could 
also trigger decisions by other governments currently being 
wooed by Beijing.  One target of particular concern, 
according to FM Huang, is Costa Rica.  This could lead a 
beleaguered Taipei to further meddle in Central American 
politics in its ongoing diplomatic contest with Beijing. 
YOUNG