Thu, May 08, 2008 - Page 3 News List

PNG aid scandal: Diplomatic efforts cost nation US$46 million in bad debts

STAFF WRITER, WITH CNA

Taiwan has incurred bad debts to the tune of US$46 million in its diplomatic efforts over the past eight years, an administrative vice minister of foreign affairs said yesterday.

Fielding questions at the Legislative Yuan Finance Committee, Javier Hou (侯清山) said Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) was correct in saying that diplomatic bad debts had totaled US$46 million since the Democratic Progressive Party administration took office in 2000.

Of the total, Hou said, US$5 million was used for diplomatic efforts — either for establishing formal diplomatic relations or for cementing bilateral ties — authorized by the Ministry of Foreign Affairs’ Department of East Asian and Pacific Affairs.

US$41 million was used for diplomatic efforts authorized by the ministry’s Department of Central and South American Affairs during the eight-year period.

Hou said, however, that not all of the diplomatic expenses were bad debts that were irretrievable, adding that seven loans were being serviced — meaning that the debtor countries have been regularly paying back the loans and interest.

Four other loans on which payment have fallen behind are still under investigation, he said.

Meanwhile, Lai questioned Yang Te-chuan (楊德川), head of the ministry’s Department of Accounts, on who had authorized the appropriation of US$29.8 million in 2006 as part of a fund to facilitate the establishment of formal diplomatic relations with Papua New Guinea.

The money — remitted to a joint bank account in Singapore opened by two “diplomatic brokers” — was remitted in a lump sum Sept. 14, 2006, with the approval of then foreign minister James Huang (黃志芳), Yang said.

Yang said he was certain the US$29.8 million was remitted to a joint bank account opened by the two brokers, Wu Shih-tsai (吳思材) and Ching Chi-ju (金紀玖).

He said he had no idea why the sum was not retrieved after Taipei’s attempt to establish formal diplomatic relations with Papua New Guinea failed.

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