Applying for membership in the Beijing-backed Asian Infrastructure Investment Bank (AIIB) could benefit the nation’s economy — if the Taiwan’s sovereignty could be protected, top financial and economic officials said yesterday.
China proposed establishing the AIIB to provide finance to major infrastructure projects across the Asian region and it is expected to be set up by the end of this year. The US$100 billion bank is seen as possible rival to the Asian Development Bank, as well as the World Bank and the IMF, which are seen to be dominated by developed countries such as the US.
At least 35 nations have said they want to join the AIIB as founding members, including the UK, France, Germany and Italy, and Australia says it is considering joining.
In Taiwan, there is growing debate over whether the nation should seek to join as well.
Minister of Finance Chang Sheng-ford (張盛和) and Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) yesterday told lawmakers that they both agreed that participating in AIIB might benefit Taiwan’s development in terms of economic and financial perspectives.
“Joining the institution may offer quite a few business chances for Taiwan’s banking sector,” Tseng said in a question-and-answer session during a meeting of the legislature’s Finance Committee at the Legislative Yuan in Taipei.
Chang told the committee that the number of AIIB members may surpass the total number of the proposed members of the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), which may offer advantages for Taiwan’s economy if the nation is part of it.
However, both Tseng and Chang said the prerequisite for Taiwan’s applying for membership would be the protection of the nation’s dignity and sovereignty.
The Ministry of Foreign Affairs and the Mainland Affairs Council might lead an inter-Cabinet discussion of the issue, they said.
The nation’s experience in participating in APEC and the Asian Development Bank could provide some lessons in this regard, they added.
Central bank Governor Perng Fai-nan (彭淮南) also backed the idea of seeking membership in the AIIB and suggested taking a pragmatic approach to such negotiations.
“As a central bank governor, I would advise the government strive for membership in AIIB as participation itself in a regional organization is positive for Taiwan,” Perng said.
In related news, Tseng and Chang said the drought may become a major uncertainty for the nation’s economy and stock market performance this year.
“If the water shortage continues, it may curb the nation’s industrial production, dragging down exports and overall GDP growth,” Chang said.
Asked if the Taiwan’s economic growth might fall below 3 percent this year due to the water shortage, as Yuanta-Polaris Research Institute (元大寶華研究院) warned on Wednesday, government officials said economic growth would be hurt only if the water shortage worsens.
The government last month raised its economic growth forecast for this year to 3.78 percent, from the 3.5 percent it estimated in January, with the Directorate-General of Budget, Accounting and Statistics scheduled to update the forecast by the end of next month.
Additional reporting by Crystal Hsu
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