It is not that simple, you can "declare" states[1]
There are two main theories declarative and constitutive for state recognition.
The Article 3 of the 1933 Montevideo convention infers a state can exist even if no other state recognizes it. The convention was merely codification existing principles, so it is supposed to even non-signatories as long they are subject to international law. This view is endorsed by the EU and other entities.
The declarative theory states only four basic preconditions:
- A permanent population of residents/citizens
- A defined territory - need not be undisputed
- A government
- Ability to enter into relations with other states
The constitutive theory on other hand defines a state that has to be recognized by just one other state.
Recognition is merely paper legitimacy and about geopolitics and just esoteric aspect of international law.
In practice, as always it works quite differently basis power dynamics. There are many autonomous regions who have been basically independent for decades without recognition and other way round wide spread recognition without any autonomy.
For example Palestine is recognized by 147 UN member states compared to just 12 states that recognize Taiwan(ROC) and therefore not PRC[2] . In reality Taiwan deals with every single country in an informal capacity and their exports are core to the whole world.
There are states with no recognition like Somaliland but would be a state in the declarative theory. In addition to first three conditions being met, it has recently entered legal agreement with Ethiopia for port access, and has relationship with Taiwan etc, but it is not formally recognized by anyone.
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[1] Sadly you cannot "declare" bankruptcy legally yet though ;)
[2] Technically Taiwan(ROC) and Mainland(PRC) both claim the entirety of China as either the successor(PRC) or continuation(ROC) of the state before 1949, so recognizing Taiwan means recognizing Taiwan claim over all of China and not recognizing PRC. There is no mechanism for recognizing current reality of two independent functioning states.
There used to be many more states which did recognized ROC over PRC, till 1971 even UN did not recognize PRC, but those numbers have dwindled and only very few mostly micro nations now still recognize Taiwan.
The history of how China and Taiwan use a lot of diplomacy, investments, loans and other inducements in return for recognition is quite interesting. It is possible in another 5-10 years not a single state would recognize Taiwan formally but everyone would happily work with them as though they are a state.