Mon, Dec 04, 2017 - Page 16 News List

Southbound review protocol to protect firms

LOW RISK:Having a cross-ministerial committee assess official development assistance projects in Southeast Asia would safeguard firms, a Ministry of Economic Affairs official said

By Lauly Li  /  Staff reporter

The government plans to implement at least two review processes before carrying out any official development assistance (ODA) projects in Southeast Asian nations, a move the government said is to prevent bad debts while safeguarding the interests of Taiwanese firms.

“We will make sure that the investment risk is as low as possible and will call off projects if anything seems wrong,” a high-ranking official at the Bureau of Foreign Trade told a media gathering on Thursday night.

President Tsai Ing-wen (蔡英文) on Sept. 25 announced the ODA initiative as the government pushes its New Southbound Policy, which aims at improving Taiwan’s ties with ASEAN members, South Asian nations, Australia and New Zealand.

The official, who declined to be named, said the ODA initiative would help Taiwanese companies tap into public infrastructure projects in Southeast Asian countries, as well as countries that have diplomatic relationships with Taiwan.

Instead of large infrastructure projects like dams or high-speed railways, the government is looking for smaller projects that cost less than US$100 million each, such as water purification management, road development or bridge construction, the official said.

The ODA initiative includes a combined loan of US$3.5 billion from state-run banks and interest subsidies from the government, she added.

A cross-ministerial committee at the Executive Yuan — comprising representatives from the Office of Trade and Negotiations, the Ministry of Foreign Affairs, the Ministry of Economic Affairs and state-run banks — would work together on the ODA proposals.

A senior Ministry of Economic Affairs official, who also requested anonymity, said the government will only approach countries or receive ODA proposals from nations with internationally certified credibility concerning debts.

Taiwan’s representative offices in Southeast Asian nations are the main contact with foreign governments, the official said, adding that those offices would carry out preliminary reviews of proposals.

The cross-ministerial committee would assess the feasibility of ODA projects and evaluate the effect on the bilateral political and trade relationships before handing the project to state-run banks, she said.

If the state-run banks decided to ink agreements with recipient nations, the agreements would include WTO dispute settlement and international commercial arbitration provisions to safeguard the interests of Taiwanese banks and firms, the official said.

No nation has yet to confirm holding talks with Taiwan about an ODA initiative.

Meanwhile, a new investment guarantee agreement between Taiwan and the Philippines, which could be signed in the near future, aims to broaden the scope of the original pact signed in 1992 — which only targeted the manufacturing sector — to include the financial industry, a source familiar with the matter said on Friday.

The new pact aligns better with how trends in industries important to Taiwan and the Philippines are developing, the source said.

It puts in place mechanisms that make investments more transparent and treat investors more fairly, including provisions on how investors can seek government assistance when they run into trouble, the source said.

Additional reporting by CNA

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