Money diplomacy must have limits

Anti-Chinese unrest in the Solomon Islands is a rare instance of the downside of the dollar diplomacy that the mainland and Taiwan are practising among small South Pacific nations. The ruined lives and destruction caused during the riots last week must serve as a warning to the rivals that there are limits to their efforts to win favour.

Security forces from Australia, New Zealand and Fiji have arrived to maintain order and prevent a repeat of the ethnic unrest that engulfed the country in 2003.

Hong Kong people were among the nearly 300 ethnic Chinese residents who opted for repatriation to China after losing tens of millions of dollars of possessions. They were targeted after rumours that a vote among politicians to choose a new prime minister had been influenced by money from Taipei. Rioters accused Taiwan of paying off legislators to choose Snyder Rini as prime minister - just as his predecessor, Sir Allan Kemakeza, was accused of having accepted millions of dollars in kickbacks in return for diplomatically recognising Taiwan rather than Beijing.

How true such allegations are may never be known. Although a Taiwanese Foreign Ministry spokesman on Wednesday dismissed the latest claim as 'totally groundless', there is no dispute that the Solomon Islands is one of just 26 countries that give diplomatic recognition to Taiwan. That makes the nation of just 552,000 people a prime battleground between the island and the mainland.

For the rivals, it is partly a matter of pride, but mostly one of influence. Each of the world's 191 countries, no matter how small, has a vote at the United Nations and, through alliances, that can translate to significant economic or political gain.

With six countries recognising Taiwan in the South Pacific, and all small and poor - Nauru, Palau, the Solomon Islands, Tuvalu, Kiribati and the Marshall Islands - the region has become important for the mainland to exert its power and Taiwan has countered accordingly.

Some of the nations have shifted alliances several times and become adept at auctioning themselves off to the highest bidder. In 2000, the Solomon Islands put a US$150 million price tag on Taiwan's continued diplomatic recognition.

As wrong as such practices may seem, they have been beneficial to cash-strapped governments. Infrastructure projects involving airports, government buildings and sports complexes are concrete proof, while less obvious, but equally important, is the money put into agriculture, health care and irrigation. Mainland and Taiwanese companies, given tax breaks and other incentives to get started, provide much-needed employment and income for islanders and produce goods that would normally have to be imported.

Wen Jiabao proved that the region matters to Beijing earlier this month when he became the first Chinese premier to visit the South Pacific. In Fiji, at the first China-Pacific Islands Countries Economic Development and Co-operation Forum, he pledged a wide-ranging package of economic aid, including US$375 million in preferential loans to the eight nations in the region that support a one-China policy.

There is nothing unorthodox about such methods; the US and European nations have for centuries used trade and diplomacy as incentives to further their various causes. Where the line must not be crossed, though, is when the democratic freedoms of nations are involved.

Accusations that the mainland and Taiwan are interfering in the political processes in South Pacific islands are to be taken seriously and properly investigated. An Australian parliamentary report released last month said the rivalry was causing corruption and political unrest in the South Pacific.

Diplomatic recognition is an important issue to the mainland and its cross-Strait rival, but the lesson of the Solomon Islands must serve as proof that the rivalry can go only so far.