Official Development Assistance (ODA) has become an important tool in the foreign policy of many countries, including Taiwan. Despite Taiwan’s statehood being unrecognized globally by many nations due to pressure from China, Taiwan’s strong financial standing allows it to provide foreign aid. Taiwan not only uses this aid to enhance its international status but also to promote democracy and international cooperation. One of the key institutions managing Taiwan’s foreign aid is the International Cooperation and Development Fund (ICDF), supported by the Taiwanese Ministry of Foreign Affairs through policy documents such as the White Paper on Foreign Aid Policy.
In 1951, Taiwan first received aid from the United States, amounting to over USD 1.482 billion, covering both project-based and non-project-based aid, driving significant infrastructure development and the establishment of key industrial equipment, which became the foundation of Taiwan’s economic miracle. Approximately 70% of this aid was economic assistance, 26% comprised agricultural products, and 4% took the form of development loans. The aid provided by the U.S. included transportation infrastructure, industrial facilities, financial development, agricultural and fisheries advancements, education, teacher training programs, as well as public health initiatives and medical equipment (Mandy & Soh, 2009).
Without the support from the U.S., Japan, and Saudi Arabia, Taiwan would not have emerged as a financially robust nation. Consequently, as an expression of gratitude and a reflection of its responsibility to the international community, Taiwan has a moral obligation to assist other impoverished nations in achieving their own “next Taiwan miracle” (Mandy & Soh, 2009). Taiwan began providing aid in 1959 with technical missions in Vietnam and Africa. However, despite once being a member of the United Nations, Taiwan lost its seat in the UN in 1971, effectively ending its statehood recognition. After Taiwan’s exit from the UN, it initiated aid missions in Africa, Asia, and Latin America, focusing on agricultural modernization and infrastructure (MOFA Taiwan, 2009).
Transition from Checkbook Diplomacy to More Controlled Aid: Under President Ma Ying-Jeou (2008-2016), Taiwan shifted its policy direction by introducing the concept of flexible diplomacy, which focused more on the actual needs of aid-receiving countries and long-term partnerships. This approach emphasized technical aid over mere financial assistance. The objective of partnerships for progress and sustainable development offers a more effective approach to allocating foreign aid. President Ma also adopted a pro-China stance and worked to deepen bilateral economic relations (Atkinson, 2014). Additionally, Taiwan increased transparency in managing its aid funds after a corruption scandal involving USD 30 million intended to establish diplomatic relations with Papua New Guinea (Lin & Lin, 2017).
Diplomacy in the Tsai Ing-Wen Era: During President Tsai Ing-Wen’s tenure (2016-2024), Taiwan has adopted a steadfast diplomacy approach, emphasizing mutually beneficial cooperation. Taiwan aims to end one-way assistance by creating win-win solutions for both Taiwan and its partner countries. The main focus is increasing Taiwan’s international visibility and promoting the values of democracy, freedom, and human rights (Cheng, 2017).
Integration of Civil Society Approaches: Taiwan has also begun shifting from traditional ODA to civil society approaches, where foreign aid is conducted through the involvement of international NGOs and civil society organizations (CSOs). By integrating this approach, Taiwan demonstrates diplomatic maneuvering as a small yet relevant player on the global stage, even though it often faces pressure from China (Lin & Lin, 2017).
Characteristics and Forms of Taiwan’s Aid: Taiwan’s aid is characterized by a variety of forms, including technical, economic, and humanitarian assistance. According to MOFA Taiwan’s, this aid is focused on five key goals:
1. Strengthening diplomatic alliances.
2. Repaying a moral debt to the international community that once supported Taiwan.
3. Enhancing human security by helping countries address global threats such as hunger and climate change.
4. Fulfilling its responsibilities as a member of the international community.
5. Promoting humanitarian values through programs such as medical aid and technical training.
Forms of Aid: Taiwan’s aid is divided into two categories: soft aid and hard aid. Soft aid includes areas such as education, training, and humanitarian assistance, while hard aid focuses on economic and infrastructure development. In recent years, Taiwan has shifted its aid approach, placing more emphasis on soft aid, particularly in education, health, and technology development. This move reflects a transition from financial and infrastructure-based hard aid toward aid that is more oriented toward human capacity development and sustainable partnerships. Taiwan has also enhanced its collaboration with civil society organizations and international NGOs as part of its efforts to strengthen the impact of its aid in recipient countries (ICDF, 2018).
Types of Aid: Taiwan’s aid consists of bilateral ODA (92%) and multilateral ODA (8%). While Taiwan’s multilateral aid is relatively small, it still contributes to international institutions such as the Asian Development Bank and the Central American Bank for Economic Integration (MOFA Taiwan, 2009). Taiwan also offers international scholarships for students from partner countries. Although Taiwan has invested in foreign aid for decades, the effectiveness of this aid is often questioned. Most recipient countries remain economically and socially challenged, and in some cases, Taiwan’s aid has not led to sustainable development due to ongoing dependency on foreign aid, which reduces the incentive for recipients to build economic independence.
Trends in Taiwan’s Aid: According to ICDF data, Taiwan’s total aid from 2015 to 2018 ranged between NT$ 15.62 to 15.79 billion annually. However, Taiwan’s aid contribution relative to GNI has significantly decreased since 2010 and remains well below the UN target of 0.7%. Taiwan also faces challenges from China, which offers larger economic incentives to Taiwan’s diplomatic partners.
From 2019 to 2022, Taiwan demonstrated a strong commitment to providing foreign aid, focusing on socio-economic development, human resource capacity building, and the promotion of economic relations with partner countries. In 2020, Taiwan’s foreign aid increased significantly in response to the COVID-19 pandemic, with shipments of masks, personal protective equipment, and medical supplies to various countries. In addition, Taiwan continued to support infrastructure development projects and educational scholarship programs.
In 2021 and 2022, Taiwan sustained its aid efforts with an emphasis on sustainable development projects and humanitarian assistance. Scholarship and training programs for partner countries were expanded, with a continued focus on enhancing human resource capacity. Overall, from 2019 to 2022, Taiwan provided foreign aid totaling approximately USD 1.2 billion, covering various forms of assistance including humanitarian aid, development, and education.
Taiwan’s Aid Orientation: Taiwan uses foreign aid as a tool to avoid diplomatic isolation by China. Although this aid has not shown significant long-term effectiveness in influencing the economic policies of recipient countries, no aid recipient has successfully replicated Taiwan’s economic growth model.
Taiwan occupies a unique position in global geopolitics, especially due to its unrecognized statehood. Under pressure from China, Taiwan uses foreign aid as a diplomatic tool to expand its influence in developing countries, particularly in Asia, Africa, and Latin America. China also uses aid diplomacy to expand its influence in the same regions. Taiwan faces difficulties due to China’s much larger financial capacity, which enables it to offer more substantial economic incentives to partner countries. In this context, Taiwan’s aid is sometimes seen as an attempt to counter China’s influence, which often comes with the condition that recipient countries sever diplomatic ties with Taiwan. Domestically, Taiwan also faces challenges as the public frequently questions the benefits of large foreign aid allocations, particularly during times of global economic instability.
This aid is not only aimed at building diplomatic relations but also as a way for Taiwan to avoid international isolation. Taiwan’s economic strength provides it with an advantage in influencing developing countries through strategic aid. By using foreign aid to enhance its international status and expand its diplomatic network, Taiwan seeks to build relationships with countries not bound by China. Although the effectiveness of this aid is still debated, Taiwan continues to adapt its strategy, shifting from dollar diplomacy to cooperation focused on capacity building and long-term solutions.
However, Taiwan’s success in using foreign aid to gain international political support depends on how the country navigates pressure from China and continues to demonstrate the added value of its partnerships with developing countries. Taiwan must also continue to enhance transparency and accountability in managing its foreign aid to gain trust from both recipient countries and its domestic public.
In the future, Taiwan should consider expanding the focus of its aid, not only to countries with formal diplomatic relations but also to countries with the potential to become strategic allies. Taiwan must also continue to innovate in its aid approaches, leveraging technology and knowledge to provide more relevant and impactful solutions for the long term.
