Tue, May 16, 2017 - Page 11 News List

Wu Rong-i to run state investment firm: council

GROWTH:The NDC said an eight-year infrastructure development program would create up to 50,000 jobs per year, as well as those created by the private sector

By Crystal Hsu  /  Staff reporter, with CNA

The National Development Council (NDC) yesterday said it has found a proper candidate to head a state investment company and raise funds to help promising firms thrive.

Former vice premier Wu Rong-i (吳榮義) has agreed to take charge of the equity fund, which would function as a venture capital firm and manage as much as NT$10 billion (US$331.59 million), NDC Minister Chen Tain-jy (陳添枝) said.

The equity fund still needs procedural approval from authorities and could start operations within six months, he added.

The organization plans to raise NT$2 billion to invest in the Internet of Things as part of a first phase, which would seek to advance the government’s efforts to turn Taiwan into an “Asian Silicon Valley,” Chen said.

The equity fund would not vie for management rights, instead limiting its role to capital investment, and would exit once it achieves its goals, he said.

Eventually, the fund is to target firms in the “five plus two” industries President Tsai Ing-wen (蔡英文) has been promoting, including biomedicine, “green” technology, “smart” machinery and national defense.

Separately yesterday, the council said a bill pushing infrastructure development over the next eight years is expected to increase the nation’s GDP by 0.1 percentage points per year on average.

Taiwan’s nominal GDP is expected to increase by NT$1.1 trillion (US$36.47 billion) and real GDP by NT$975.9 billion during the program’s eight-year duration, the council said in a statement.

That translates to real GDP growth of about 0.1 percentage points per year on average, the council said of the growth potential of the proposed Special Act for Forward-looking Infrastructure Development Projects, which is being reviewed by the Legislative Yuan.

Under the bill, the government is to spend NT$882.49 billion over eight years on infrastructure projects nationwide, including new light railways and several rail extension or improvement projects.

Whenever the government makes an investment of NT$10 billion, Taiwan’s nominal GDP generally rises by about NT$11.2 billion and real GDP generally increases by NT$10.8 billion, the council said.

The council’s forecast was made in response to criticism from opposition lawmakers, who contend the draft bill is nothing more than “pork barrel” legislation intended to benefit Democratic Progressive Party candidates in next year’s local elections.

The Chinese Nationalist Party (KMT) has tried to block consideration of the bill in the legislature, hoping to slash some of the proposed spending to save taxpayers money.

The draft bill was pushed through a first reading in the Legislative Yuan yesterday, but would likely be subject to further debate among lawmakers from different caucuses before moving on to a second and then final reading.

Proponents have said 40,000 to 50,000 new jobs per year would be created by the government’s average investment of NT$110.31 billion per year under the eight-year program, but the forecast has failed to impress opposition lawmakers.

However, the council said that the estimate covered only jobs to be created to complete the public work projects, and that more jobs would be created indirectly by encouraging the private sector to pour money into other sectors related to the program.

The infrastructure program is expected to strengthen the competitive edge of Taiwan’s industrial sector and eventually boost economic growth, the council added.

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