Fri, Jul 06, 2007 - Page 3 News List

MOFA to offer debt reductions

SEEKING APPROVAL The deputy minister of foreign affairs said that a public hearing would be held in the legislature and stressed that reduction did not equal cancelation

By Jewel Huang and Shih Hsiu-chuan  /  STAFF REPORTERS

Ministry of Foreign Affairs (MOFA) officials yesterday said that the ministry would seek lawmakers' support for offering debt reductions to Taiwan's allies, but stressed the plan was not the same as canceling the debt.

Minister of Foreign Affairs James Huang (黃志芳) said on Wednesday that he had ordered the ministry's Department of Economy and Trade to draw up plans that provide debt reduction to the nation's allies, but that the plans would not be completed in time for the summit that President Chen Shui-bian (陳水扁) will attend next month.

Deputy Minister of Foreign Affairs Yang Tzu-pao (楊子葆) said yesterday that offering poor countries debt relief was a global trend.

"Most highly indebted countries borrow money from a number of different countries. Therefore, if we want to offer them a debt reduction, we need to communicate with the other debtor nations first," Yang said.

"MOFA will hold a public hearing in the legislature and seek the support of lawmakers and the Taiwanese people before proceeding," Yang said.

Yang also stressed that debt reduction did not equal cancelation.

"Debt reduction actually includes the extension of repayments or remission of interest," Yang said. "It will not do us any good to force poor nations to pay back what they cannot afford."

About 10 allies qualify for debt reduction, but MOFA will control the evaluation of priority and would seek consensus before implementing any plan, Yang said.

As for repayment terms for countries that have broken off diplomatic ties with Taiwan, Yang said that MOFA would assure that the terms are met through international law.

"For example, despite severing diplomatic relations, South Africa has been making loan repayments consistently and on time," Yang said.

Lawmakers were divided on the issue.

Chinese Nationalist Party (KMT) Legislator Lee Jih-Chu (李紀珠) said that she personally supported the idea.

"I would back debt-relief as long as it doesn't give our allies the impression that they do not need to pay back debts to Taiwan in the future," she said.

People First Party (PFP) Legislator Fu Kun-chi (傅崑萁) said that the party would reject MOFA's plan, whatever the details.

"We are strongly opposed to offering debt-relief in order to maintain diplomatic relationships with allies, unless it is demonstrated that those allies cannot survive without such a debt-relief plan," Fu said.

PFP Legislator Daniel Hwang (黃義交) questioned MOFA's motives.

"It can't be just because debt-relief is an international trend. It [the plan] follows the severance of relations with Costa Rica and rumors that the president has met difficulties in arranging next month's trip to Latin American," Hwang said.

Hwang said that the country would come under fire if the international community finds out that Taiwan has ulterior motives in proposing the plan.

Taiwan Solidarity Union Legislator Kuo Lin-yung (郭林勇) said that MOFA has to give due consideration to the plan.

"The ministry should tell the public how effective the plan would be in terms of consolidating the nation's relationships with its allies," Kuo said.

Kuo said that his party would support the plan as long as it simply prolongs the repayment period of outstanding loans, but would not support simply writing off any outstanding debt.

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