Taipei denies ‘dollar diplomacy’ in LatAm

Chen made the announcement at a Latin American summit at the Nicaraguan capital at noon, and Michel Lu, spokesman for the Foreign Ministry, called a press conference in Taipei to deny charges that Project “Co-Prosperity,” to be financed by a US$250 million fund, aims at buying diplomatic allies.

Vice Premier Wu Rong-i, who is on President Chen’s entourage, reported on the new project at the summit meeting, where three of the presidents expected to take part were absent.

There still is some confusion about how much the proposed fund would have for “assistance in investment” in worthy Latin American economic development schemes.

Officially, Wu said, the fund will have NT$7.5 billion, which will be only about US$2,270 million. The government insisted it totals US$250 million, which, then, will amount to at least NT$8.25 billion.

Under the project, Wu pointed out, Taiwan will try to promote investment in Latin America by raising enough money, supplying necessary professional manpower, and transferring technical know-how.

Specifically, Wu added, Taiwan wants to have its textiles industry relocated to Central America, where all countries are its diplomatic allies.

“We’ll work together (with the Central Americans) to set in place a textiles and apparel production and sales chain to raise our joint competitiveness on the international market,” Wu said.

Stressing investment as top priority, Wu said the ceiling is set at 49 percent for government share in any new entrepreneurial endeavor.

In addition, the government shares in investment projects will be sold “at opportune times” to replenish the fund, Wu said.

“What we are proposing is no donation,” the vice premier emphasized.

James Huang, spokesman for President Chen, defended Project “Co-Prosperity” as no aid in gratis.

It is different from the Central American Economic Development Fund set up in 1996, Huang said. That is aid in gratis, he added.

Recipient countries do not have to return the money under CAEDF project President Lee Teng-hui inaugurated after his visit to a Central American summit.

“Ours is government-aided investment,” Huang told a hastily called press conference at Managua. “It’s not simple economic assistance.”

The CAEDF proposes to contribute US$240 million over 12 years.

“After the change of government (in 2000),” Huang said, “we have continued to contribute.”

The denial of dollar diplomacy was echoed in Taipei by the Foreign Ministry, which has to contribute at least NT$2.5 billion from out of the International Cooperation and Development Fund it runs.

The other NT$5 billion will come from the National Development Fund under control of the Executive Yuan or the Cabinet.

“Don’t get us wrong,” said Michel Lu. “We are under no obligation to accept each and every investment project our allies are going to propose,” he stressed.

All such projects will have to be negotiated, Lu said. “We’ll consider whether they will have beneficial effect on our industrial development,” he added.

As Latin American allies have joined the CAFTA (Central American Free Trade Agreement) and FTAA (Free Trade Agreement of the Americas), Lu went on, Project “Co-Prosperity” would help them develop their U.S. markets.

“It’s going to be a triple-win project,” Lu said. Taiwan, its Latin American allies and the United States will all benefit from the project.

To make sure Project Co-Prosperity” works, the Council of Economic Planning and Development will set up a Central and South American research center to look for opportunities for investment.

The Ministry of Economic Affairs will open an office for economic and trade investment in Central America, while each embassy in the six Central American capitals will organize a task force to help Taiwan entrepreneurs.

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