Concluding their summit in London last week, leaders of the G20 member states pledged to provide US$5 trillion in fiscal resources to counter the global economic crisis between now and the end of next year. They also promised to take action to eliminate tax havens and to curb excessive pay and compensation for company executives. They further pledged to provide US$1.1 trillion through the IMF and other global financial institutions to help countries with deeply troubled economies to weather the storm.
It is too early to say whether the measures will get the world out of the current economic crisis. Still, national leaders have expressed their sincere determination to overcome differences and take joint action. Hopefully this will boost lending, investment and consumer confidence. The summit statement is an important milestone on the road that may lead out of this recession. What remains to be seen is whether the actual steps taken by countries around the world can deliver on the pledges.
The G20 agreed to a US$1.1 trillion program of support to restore credit, growth and jobs in the world economy, including US$500 billion in concessional finance, a new allocation of US$250 billion for IMF special drawing rights (SDR) and US$250 billion in support of trade finance. How these astronomical sums will be amassed is not entirely clear, especially now that the financial crisis has swept across the world.
Taiwan is a significant economy, with foreign currency reserves of more than US$300 billion, fourth in the world behind China, Japan and Russia. Although Taiwan has felt the impact of the international financial storm, its finances remain fairly healthy when compared with many other countries. Taiwan is, therefore, in a position to provide financial assistance to other countries.
Some foreign commentators have complained that Taiwan, with its strong economy, should have been invited to join the G20. Taiwan did not take part in the summit and international actors would soon ask Taiwan to take a role in international efforts to counter the financial crisis or ask it to contribute funds to the IMF.
However, Taiwan’s economy is export-oriented and as such, it is closely linked to the international economy. That means that helping revive the global economy is in Taiwan’s own interest as much as it is in the interest of the rest of the world.
Because Taiwan’s particular international status precludes participation in many international organizations, the government should consider ways of taking part before the question arises.
The worst idea would be for Taiwan to simply provide funds through China, which would only reinforce the impression that Taiwan is part of China. The result would be a substantial loss to Taiwan. The government must avoid this scenario at all costs.
A better option would be for Taiwan to provide funds through the US. Although this might look peculiar from a diplomatic perspective, it would build mutual trust and strengthen Taiwan’s relationship with Washington.
A final option, though, is the Asian Development Bank (ADB), which is one of the few international organizations of which Taiwan is a member. The ADB also has a close working relationship with the IMF. Channeling aid through the ADB would allow Taiwan to exercise its rights as an independent member of the bank, reducing diplomatic entanglements. It would also strengthen Taiwan’s position within the ADB and demonstrate its commitment to the global effort. This is the best option for Taiwan to participate in international efforts to counter the financial crisis.
Because much of what former US president Donald Trump says is unhinged and histrionic, it is tempting to dismiss all of it as bunk. Yet the potential future president has a populist knack for sounding alarums that resonate with the zeitgeist — for example, with growing anxiety about World War III and nuclear Armageddon. “We’re a failing nation,” Trump ranted during his US presidential debate against US Vice President Kamala Harris in one particularly meandering answer (the one that also recycled urban myths about immigrants eating cats). “And what, what’s going on here, you’re going to end up in World War
Earlier this month in Newsweek, President William Lai (賴清德) challenged the People’s Republic of China (PRC) to retake the territories lost to Russia in the 19th century rather than invade Taiwan. He stated: “If it is for the sake of territorial integrity, why doesn’t [the PRC] take back the lands occupied by Russia that were signed over in the treaty of Aigun?” This was a brilliant political move to finally state openly what many Chinese in both China and Taiwan have long been thinking about the lost territories in the Russian far east: The Russian far east should be “theirs.” Granted, Lai issued
On Tuesday, President William Lai (賴清德) met with a delegation from the Hoover Institution, a think tank based at Stanford University in California, to discuss strengthening US-Taiwan relations and enhancing peace and stability in the region. The delegation was led by James Ellis Jr, co-chair of the institution’s Taiwan in the Indo-Pacific Region project and former commander of the US Strategic Command. It also included former Australian minister for foreign affairs Marise Payne, influential US academics and other former policymakers. Think tank diplomacy is an important component of Taiwan’s efforts to maintain high-level dialogue with other nations with which it does
On Sept. 2, Elbridge Colby, former deputy assistant secretary of defense for strategy and force development, wrote an article for the Wall Street Journal called “The US and Taiwan Must Change Course” that defends his position that the US and Taiwan are not doing enough to deter the People’s Republic of China (PRC) from taking Taiwan. Colby is correct, of course: the US and Taiwan need to do a lot more or the PRC will invade Taiwan like Russia did against Ukraine. The US and Taiwan have failed to prepare properly to deter war. The blame must fall on politicians and policymakers