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Boost investment in nation's allies

While visiting Guatemala on Sept. 22, President Chen Shui-bian (陳水扁) announced the "Jung Pang Project," pledging NT$7.5 billion (US$226 million) to assist the nation's diplomatic allies in Central America with their development.

The main thrust of the project is to help reduce the cost of investing in Central America for Taiwanese businesspeople, by subsidizing up to 49 percent of their business ventures and jointly breaking fresh ground in the region.

We believe this is a grand project that deserves the support of all Taiwanese. It will enable Taiwanese businesspeople to plan business strategies from a global perspective, avoid over-investment in China and help them enter the North American market -- while also assisting our diplomatic allies in Central America with their economic development and creating employment.

This kind of economic diplomacy will create a win-win situation for Taiwan and its diplomatic allies. The US House of Representatives approved the Central American Free Trade Agreement (CAFTA) on July 28, and a free trade agreement for the Americas is likely to follow, creating huge business opportunities in North and Central America.

If the government is able to take advantage of this integration of American economies in a timely manner, it might help the nation extricate itself from its erroneous and risky China-leaning economic policies and speed up its industrial upgrading and transformation.

This kind of policy, which aims to use investment to improve the economies of our allies and Taiwan's diplomatic ties with them was outlined by Vice President Annette Lu (呂秀蓮) when she led a delegation to Central and South America in mid-March. During that trip, Lu also traveled to El Salvador to inspect an industrial park reserved for Taiwan-funded firms.

In April, El Salvador's Vice President Ana Vilma Albanez de Escobar led a delegation to Taiwan to hold talks with government officials on the feasibility of setting up a "Taiwan Park" in El Salvador. This was five months ago, and it unfortunately seems as if the project has remained in the appraisal stage.

The major drawback of the "Jung Pang Project" is that it is too small in scale. A few days ago, Dominican Republic President Leonel Fernandez made a similar observation when he asked why Taiwanese businessmen are being so stingy toward the Dominican Republic, a diplomatic ally, while investing such huge amounts in its enemy, China.

His doubts are reasonable, because, according to a US report, Taiwan has invested US$280 billion in China over the past 15 years.

By comparison, the "Jung Pang Project" valued at US$250 million is simply insignificant -- a drop in the ocean. Therefore, we believe that if the government is genuinely willing to aid our allies, the sum is inadequate. It would still not be much if the government decided to increase that amount ten-fold, since that would still be less than one-tenth of Taiwan's total investment in China.

In short, only by increasing the scale of the investment project can Taiwanese businesspeople form industrial clusters in each of our Central American allies and bring about a wave of investment in the region that will lead them to success.

We also want to remind the government that although it has encouraged Taiwanese businesspeople to invest in Southeast Asian and Central American countries in the past, the results were disappointing.

The problem was not the planning itself, but that the government let businesspeople freely invest in China. This caused them to rush to redirect their investments from Southeast Asia and Central America, to China.

Before long, products manufactured by Taiwanese businesspeople in China knocked out Taiwanese-manufactured products as well as products from Taiwanese businesses throughout Southeast Asia, forcing the government to abort its "go south" policy. We therefore urge the government to strengthen its efforts to regulate China-bound investment rather than deregulating it further. This is a prerequisite for the success of the "Jung Pang Project."

It is Taiwan's unificationists and pro-China politicians in the pan-blue camp who most fear the success of the project, because that could mean an end to their "go West" and "unification" schemes. Since Chen put forth the "Jung Pang Project," they have mobilized the pro-unification media to denigrate the project as being "dollar diplomacy," "illegal diplomacy," and a way of "dodging the supervision of the legislature."

They have even said that, "Rather than donating US$250 million to small countries, we should care for the education of indigenous peoples."

Clearly, these people are showing their true colors. We all understand their ulterior motives and hope that the government doesn't hesitate to make good on its promises.

Not only that, it should expand the Jung Pang project and use all its resources to help our diplomatic allies prosper and become the centerpiece in the revitalization of Taiwan's industry.

Translated by Daniel Cheng
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