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The Strange Case of Palau: failure of a US foreign policy plan

Written by: (Contributed) on 11 February 2021


In early February a major diplomatic stand-off saw the demise of a US-led regional foreign policy plan and intelligence operations in the Pacific. There was a minimum of publicity and media coverage was restricted to not highlight the significance of the matter, which included a majority of Pacific Island Forum (PIF) members rejecting the initiative planned by the Trump administration to elevate the regional position of Taiwan.

It is, furthermore, significant to note Taiwan has historically used a shadowy, far-right organisation, the World League for Freedom and Democracy (WLFD) to promote their unofficial diplomacy behind the scenes; it has known links with drug trafficking.

The developments also coincided with the arrest of an international drug trafficker who was harbouring in Taiwan. The court case, scheduled for later this year, is likely to prove highly embarrassing for Taiwan and those associated with the Tsai Ing-wen presidential administration.

In early February the Micronesian country of Palau announced it was leaving the PIF; disagreements had arisen over the choice of leader of the influential regional organisation. The regional grouping was established in the early 1970s to coincide with independence of many of the countries in the region and enlarged in the late 1990s to assist economic development programs. The body has consisted of three main ethnic groupings from Melanesia, Polynesia and Micronesia.

The latter had always regarded themselves as being disadvantaged due to their smaller numerical size, with the two former ethnic groups having sufficient numbers to win votes. In recent times the problem has had far-reaching implications for US-led diplomacy; the main PIF has become a centre of diplomatic rivalry where the US has sought to contain and encircle China's rising influence. China, in recent years, however, has increased its diplomatic influence in Melanesia and Polynesia significantly. (1)

Micronesia has historically maintained more pro-US diplomatic positions which include major US military and other facilities based on Guam and elsewhere. Palau, for example, is a client-state of the US, where the national currency is the US dollar. With an economy based in subsistence agriculture and tourism with a significant proportion of its GDP originating from foreign aid, the country has remained poor with limited opportunities for the mass of the population.

Matters came to head toward the end of the Trump administration when the five Micronesian countries chose Gerald Zackios, a politician and diplomat who was an ambassador to the US during the Trump administration, in late 2019, to be the next Secretary-General of the PIF. In a climate of simmering diplomatic tensions Palau together with other Micronesian countries threatened to leave the PIF if Zackios was not elected. The strong-arm tactics and Trumpian-style bargaining chip, nevertheless, failed.

Following the vote for the Secretary-General position which was subsequently won by Henry Puna, the president of Palau, Surangel Whipps Jnr., sent a diplomatic note to Fiji announcing they were closing their embassy in Suva and leaving the PIF. (2) It was subsequently announced that two other Micronesian countries, Nauru and the Federated States of Micronesia, were also considering leaving the PIF. (3)

What was not given any publicity was that all three Micronesian countries concerned have full diplomatic links with Taiwan, which was used to provide access into a major regional body to push pro-US diplomatic positions. Their choice of PIF candidate, Gerald Zackios, left little to the imagination of the type of policies they sought to implement through the PIF if they had got their way. He had been hand-picked by the Trump administration to serve 'US interests'.

Within days, furthermore, all five Micronesian countries announced they had decided to leave the PIF due to them not supporting the incoming Puna leadership of the organisation. (4) The decision has far-reaching implications for Taiwan and US-led regional foreign policy.

Throughout the Trump administration the US dramatically increased their military aid and arms sales to Taiwan and hosted President Tsai Ing-wen on a number of occasions as their official guest. The fact the American Institute in Taiwan and their subsequent employment of nearly five hundred US diplomatic staff, officially on temporary leave from the State Department, is evidence in itself of the importance given to Taiwan by the Trump administration. (5)

Like much of the foreign policy and diplomacy of the Trump period, however, it was high on rhetoric, limited in content and completely deficient in organisational ability. A major thrust of the Trump administration's regional foreign policy, for example, had been to push Island Chain Theory (ICT) with Taiwan as a central part of the outdated and previously discarded relic of the previous Cold War. It is, therefore, no surprise to discover many of the appointees to 42 boards and committees by the Trump administration have already been dismissed by the Pentagon as unsuitable. (6)

It is, therefore, significant to note the very limited media coverage of the developments and diplomatic silence over their significance, particularly in the case of Taiwan. The fact the developments have left the New Southbound Policy of Taiwan's ruling Tsai Ing-wen presidential administration in tatters, is a matter future generations of historians will deal with; the policy was primarily designed to 'forge deeper ties' with countries south of Micronesia. (7)

It has failed in a spectacular manner.

Through their contacts with the PIF and Micronesian support, Taiwan's declining official diplomatic influence was bolstered by 'Taiwanese officials … increasingly being invited to regional dialogues on the Indo-Pacific organised by think-tanks'. (8) They, furthermore, used regional bodies such as the PIF to promote Taiwan 'as a model for the Indo-Pacific'. (9)

Taiwan, however, has always used a shadowy far-right organisation to conduct its unofficial diplomacy elsewhere. The so-called World League for Freedom and Democracy (WLFD) which was established in 1990 from the former World Anti-Communist League (WACL), has been based in Taipei from the previous Cold War. It has, historically, mobilised support from far-right political leaders and organisations across the globe through affiliations and annual conferences, including support for the Nicaraguan Contra, Afghani war-lords and Turkish fascists together with numerous other groups of questionable backgrounds. (10)  

Some of their strange bedfellows, however, have left observers to note 'a remarkably high percentage of members were connected to international drug smuggling', and that, 'Taiwan is a notorious centre for the international drug trade'. (11) It has, furthermore, been suggested Taiwan is 'the central node for organised drug smuggling all around the world, to fund … allied right-wing groups'. (12)

Organised crime groups have become accustomed to using numerous intermediary stops between the origins and final destination of their drug trafficking cargoes in order to make surveillance of their operations more difficult. Many of the small Pacific islands have, in recent years, been targeted by such groups; drug busts have proved quite spectacular. (13)

It is, therefore, highly significant to note the recent arrest of Tse Chi Lop, accused of unifying five major Asian triads into a huge drug trafficking syndicate at Amsterdam's Schiphol Airport late last month. (14) Tse Chi Lop was known to have settled in Taiwan where it was noted 'he had some high-level protection … and connections political and otherwise … which led to … a lot of pressure was being applied on Taiwan'. (15) The fact the subsequent arrest took place in the Netherlands and not Taiwan has tended to reveal the delicate nature of the case.

It remains, as yet, to be established with the forthcoming court case just what the nature of the political connections were in Taiwan and how they were used to shield and harbour a central figure in global organised crime although grounds already exist to support the view there might have been 'passive collusion in high places'. (16)

And, as for Palau and four other Micronesian countries and the PIF, the matter has been allowed quietly to slip into the nether world of silence and yesterday’s news, without too much unnecessary publicity about a botched foreign policy plan and intelligence operation.  

1.     See: China dangles $39 bn carrot to build city on our doorstep, Australian, 5 February 2021; and, PM sceptical of PNG city plan, The Weekend Australian, 6-7 February 2021.
2.     Palau preparing to leave Pacific Island Forum, RNZ., 6 February 2021.
3.     Future of Pacific Islands Forum in doubt, The Guardian (U.K.), 5 February 2021.
4.     Five Micronesian countries to quit the Pacific Islands Forum, Sydney Morning Herald, 9 February 2021.
5.     Beijing keeps a wary eye on new US Taipei outpost, Australian, 18 June 2018.
6.     Pentagon clears out advisors, Australian, 4 February 2021.
7.     Australian, op.cit., 18 June 2018.
8.     Ibid.
9.     Ibid.
10.   Wikispooks: WLFD, 8 February 2021; and, The Great Heroin Coup: Drugs, Intelligence and International Fascism, Henry Kruger, (Boston, 1980); and, Inside the League, Scott Anderson and Jon Lee Anderson, (New York, 1986), Appendix, The League List, which has provided a fully detailed list of affiliates and members of the WACL/WLFD, pp. 275-85; and, The Iran-Contra Scandal: The Declassified History, Edited by Peter Kornbluh and Malcolm Byrne, page xxx., which has provided details about US Major-General John K. Singlaub (ret), who was chairman of the WACL, and responsible for establishing a network of off-shore banking facilities used by the Nicaraguan Contra and their supporters.
11.   Wikispooks and The Great Heroin Coup, ibid.
12.   Ibid.
13.   See: Cocaine flight crash 'foiled pilot's dream', Australian, 8 February 2021, which has provided details of the most recent example of the problem.
14.   Taiwan pushed to nab drug lord,  The Weekend Australian, 6-7 February 2021; and, all of the company man, The Weekend Australian, 6-7 February 2021.
15.   Taiwan pushed to nab drug lord, ibid.
16.   The Great Heroin Coup, op.cit.


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