On Aug. 27, the legislature passed the Post-Typhoon Morakot Reconstruction Special Act (莫拉克颱風災後重建特別條例), allocating a budget of NT$120 billion (US$3.65 billion) for reconstruction, all of which is to be raised through public borrowing. Now that the budget has been set, full consideration must be given to how it will be used.
First is the order of priority for the various items in the budget. The most important thing is not the scale of reconstruction projects. Rather, there should be a clear definition of which post-typhoon reconstruction plans should be included in the special budget. It has been reported that the Cabinet’s expanded budget plan for public construction next year devotes more than a third of the Water Resources Agency’s water control budget to landscape engineering. This has been criticized by some legislators as putting non-essential items before the fundamentals.
The most urgent short-term tasks following the typhoon are arranging shelter and care for flood victims and restoring transport and communication infrastructure to reconnect disaster-stricken areas with the outside world. These things must be done quickly and, above all, thoroughly. Medium to long-term matters such as relocating villages and farms, rehabilitating soil and planning future land use are also essential. However, it should be carefully considered whether they should be included in the special budget, funded out of regular government budgets or integrated with other special budgets for water control.
The next question is where funds for the special budget will come from. The Cabinet’s draft bill said that the central government should find the money either by borrowing or by selling shares in state-owned enterprises, but the legislature resolved that the whole sum should be raised through borrowing. This came just a few days after the Cabinet passed its proposed central government general budget for next year on Aug. 20, along with budgets for subsidiary departments and a special budget for stimulating the economy through expanded public construction.
These budgets would necessitate the government taking out loans totaling NT$466 billion — a record-high figure. Along with loans to fund post-Morakot reconstruction, government debt as a percentage of GDP is expected to reach 36.5 percent, still within the limit of 40 percent stipulated in the Public Debt Act (公共債務法), but it will leave very little room for further borrowing should it be needed.
Finally, the key factor affecting the success or failure of reconstruction is the government’s ability to implement the necessary measures. Over the past decade, Taiwan has devoted hundreds of billions of New Taiwan dollars to budgets for disaster recovery and related water control projects, yet people still live in fear of the devastation that each passing typhoon may cause. Disaster recovery budgets set out by governments in the past have often been suspected of being based on inflated figures.
To avoid wasting the government’s limited resources, budgets for reconstruction projects costing NT$10 million or more should only be approved following verification through on-the-spot surveys, and those valued at less than NT$10 million should be subject to random inspections.
Reconstruction work should be based on the needs of the flood victims, but that does not mean that the government should just provide everything localities ask for; otherwise, we will once more enter a vicious cycle in which the authorities can’t see the forest for the trees and fix the symptoms but not the cause.
Lee Yun-chieh is a professor of public administration at National Open University.
TRANSLATED BY JULIAN CLEGG
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