Sun, Sep 25, 2005 - Page 3 News List

New fund is a `win-win strategy', Wu Rong-i says

GOOD BUSINESS The Jung Pang Project -- providing for NT$7.5 billion in a fund to finance development projects in Central America -- can only be a success, local officials say

BY CHIU YU-TZU  /  STAFF REPORTER , IN SANTO DOMINGO

President Chen Shui-bian yesterday shakes hands with a Taiwanese boy outside his hotel in the Dominican Republic, where he is conducting a state visit.

PHOTO: CNA

Taiwan's latest investment project -- the "Jung Pang Project" -- which ensures a NT$7.5 billion (roughly US$250 million) fund for Taiwanese businessmen investing in Central America, constitutes a win-win economic strategy in the era of globalization for not only Taiwan but also its diplomatic allies in that region, Vice Premier Wu Rong-i (吳榮義) said yesterday in the Dominican Republic.

During a bilateral meeting on Thursday in Guatemala, Chen revealed Taiwan's idea to set up a US$250 million fund for financing development in Central America. Money from the fund will become available in January next year.

The fund includes NT$5 billion from the Development Fund, established in 1973 and designed to upgrade industrial infrastructure, and NT$ 2.5 billion from the International Cooperation and Development Fund (ICDF), established in 1996 to independently oversee and implement Taiwan's foreign assistance and cooperation programs.

On Friday, Wu, Minister of Economic Affairs Ho Mei-yueh (何美玥) and other Taiwanese delegations on a trip to the nation's Central American diplomatic allies, visited the Export and Investment Center of the Dominican Republic (CEI-RD). The CEI-RD is an official institution promoting foreign direct investment created in 2003 to navigate the changes in the global economy, to learn the economic situation in the country and to investigate possible investment projects.

According to Wu, the Dominican Republic has faced many challenges.

"The 18 percent unemployment rate reflects how serious economic problems are here. That's why a regional integration strategy has to be adopted. And Taiwan's Jung Pang Project can meet their needs," Wu said.

Wu said that the project would encourage Taiwanese businessmen to invest in certain industries in Taiwan's diplomatic allies.

The fund will be used to finance Taiwanese investors, who might cooperate with local counterparts, and to simplify procedures for Taiwanese investors by establishing efficient service windows in these countries. It will also fund professionals familiar with the language and the environment to travel here.

Presidential Office Deputy Secretary-General James Huang (黃志芳) said that Taiwan's textile industry might seek opportunities in the nation's diplomatic allies in Central America.

Quotas on textile and clothing exports, wielded by the US and EU for four decades to protect their domestic producers, have been abolished since the beginning of the year under a World Trade Organization agreement.

Several countries in Central America have faced challenges in the world market created by cheaper products made in China. In addition, the rule of "origin of raw materials" makes life tougher for textile producers.

"Taiwan can help its diplomatic allies by investing in an advanced textile industry in the region. The Jung Pang Project can lower the risk for investing in Central America because of the government's assistance," Huang said.

Taking Guatemala as an example, he said that, in addition to the textile industry, a number of motorcycle assembly lines have also moved there.

"In the era of globalization, leaving one's roots in Taiwan and taking a global perspective on investment will be the only way out," Huang said.

Since the early 1990s, when former president Lee Teng-hui (李登輝) began to offer substantial financial assistance to diplomatic allies, it has been observed that Latin American countries used shrewd tactics and have taken advantage of diplomatic relations to extract as much money as possible from Taiwan. Several scandals regarding corruption in many of these countries remain unsolved.

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