At over 460,000 square kilometers, PNG is the second-largest country in Australasia. Formerly governed by Australia under UN mandate, it became independent in 1975. A member of the Commonwealth, PNG has a population of four million-plus with a per capita income of around US$1000.

Taiwan already had quite good relations with PNG before the communique. In 1995, PNG became only the second country to establish a new kind of semi-official relationship with Taiwan. Earlier, in 1989, the two sides had signed a trade agreement, and the following year Taiwan opened a trade office in the PNG capital of Port Moresby. Taiwan has also sent an agricultural aid mission as well as emergency assistance in several cases of earthquakes or volcanic eruptions.

At the press conference announcing the establishment of relations, then PNG Foreign Minister Yaki said that through formal relations, he hoped that Taiwan's experience of economic development and technological progress could be of help to PNG's own development. He hoped too that in the future Taiwan would increase investment in PNG, and participate in infrastructure projects. In addition, confronting rumors that diplomatic relations were purchased with cash, he said that not a dime had been received by PNG for this establishment of ties.

The future was looking bright for bilateral relations. But when then PNG Prime Minister Bill Skate returned home from a visit to Taiwan, he suddenly announced on July 7th that he would resign. The PNG Parliament met on the 13th and selected a new prime minister, Sir Mekere Morauta.

Morauta declared that his predecessor had not broadly considered his nation's interests in establishing diplomatic relations with Taiwan. He said that the attached economic aid conditions for the establishment of relations suggested that the former prime minister and his cabinet members were attempting to personally profit from the move. After reviewing related documents, Morauta declared that the communique establishing joint relations did not have the official government seal, and therefore had never formally taken effect. At the same time he reiterated that PNG's "one China" policy was unchanged. However, he also expressed hope that PNG would continue to remain on good terms with Taiwan.

When the ROC Foreign Ministry received word of this development, Foreign Minister Jason Hu said that both sides would "very much regret" this decision. Although Taiwan has not made any move to break off all ties with PNG, the cooperative relationship would clearly have been different with a country that has formal diplomatic ties with Taiwan as compared to one which does not. Hu also stated that in establishing relations, Taiwan did not make any payment or commitment, so it is still too early to say whether or not anything has been lost.

Although both sides repeatedly declared that this establishment of formal ties was unrelated to money, the media and public opinion remained skeptical. One of the main newspapers in PNG reported that the PNG government had discussed exchanging formal diplomatic recognition for a loan of US$250 million. Legislator Trong Chai of Taiwan suggested that the establishment of relations was a scheme by outgoing ministers of the PNG government to create a retirement fund for themselves.

Faced with critical speculation at home and abroad, Jason Hu declared that he stressed to PNG that Taiwan would not make any promises or commitments prior to the establishment of diplomatic relations. The Ministry of Foreign Affairs insists that diplomatic relations be discussed separately from cooperation, and will not establish diplomatic ties with countries that only seek money. Hu even declared to the domestic media that he would resign to take personal responsibility if it turned out he had promised PNG one penny.

Amidst see-sawing diplomacy and rampant speculation about "money diplomacy," Communist China also joined in with pressure on PNG. Zhang Qiyue, spokesman for the mainland's Foreign Ministry, responding to the announcement of the establishment of relations, said the PRC demanded that the government of PNG immediately reconsider this "erroneous" decision. Otherwise, he warned, the PNG government would have to accept complete responsibility for all the serious consequences.

Zhang Pengxiang, mainland China's ambassador to PNG, hinted at what such consequences might include. PRC-PNG trade annual trade is about US$150 million, accounting for two-thirds of Communist China's trade with South Pacific countries. Zhang Pengxiang also noted that mainland China has helped PNG to build gymnasiums, agricultural laboratories, and schools, and also provided US$30 million in loans. In fact, even as the communique was being announced in Taipei, a mainland Chinese engineering team was building a road in PNG!

Besides threats from Communist China, PNG also came under pressure from Australia, whose foreign policy tends to be pro-Beijing. As the former mandate governor of PNG, and the current donor of huge amounts of aid to Port Moresby, Australia has considerable influence there. Australian Foreign Minister Downer warned the PNG government that if PNG established ties with Taiwan, this would cause a regression in economic relations with mainland China, and would draw the South Pacific region into the sovereignty dispute between Taiwan and mainland China.

Faced with Australian pressure, then Foreign Minister Yaki retorted that PNG is an independent country, not a territory of Australia, and Australia had no reason to interfere in PNG's foreign relations. He emphasized that since its independence, PNG has been under foreign influence, but its people remain poor, lacking in education and basic infrastructure. Thus PNG needs to enter into international cooperative relationships. Taiwan, as an industrialized country with a high GDP, could provide practical help to PNG.

Even as Yaki's words were still echoing, incoming Prime Minister Morauta rejected Yaki's arguments. Morauta said that in accepting the advantages offered by Taiwan, PNG would have to abandon other long-term sources of aid. He said that these sources were more valuable to PNG than Taiwan would be. Moreover, he said, money cannot solve every problem, and PNG must solve its own problems mainly through its own efforts.

The possibility that the political situation and foreign policy of another country can be completely overturned in half a month makes the job of the ROC Foreign Ministry in seeking formal ties abroad that much more difficult. It also creates more public opinion pressure on the government. But as vice president Lien Chan said in an interview with CNN, Taiwan currently has the economic capability to help the international community, and hopes to help those in need by sharing the Taiwan experience with formal diplomatic partners; therefore Taiwan will continue to pursue diplomatic ties with countries based on the principle of mutual benefit.

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On July 5, then-Papua New Guinea Foreign Minister Roy Yaki and ROC Foreign Minister Jason Hu announced the establishment of formal ties between the two sides. But a new PNG administration, formed on July 13, quickly reversed the decision. (photo by Cheng Jen-nan)