Taiwan suspends loans to three ASEAN states

Taiwan suspends loans to three ASEAN states

TAIPEI (AFP): Taiwan has suspended a total of US$58 million in loans for the development of four industrial zones in Southeast Asian nations, including Indonesia, an official said yesterday.

"We recently notified development firms here to seek other channels for the loans because of our limited budget," said Liu Feng-mei, a section chief at the International Cooperation Development (ICDF).

The authorities had promised to help local firms build industrial parks in Vietnam's Hanoi, Subic Bay in the Philippines, and Medan in North Sumatra and the Batam Island in Indonesia with low-interest loans, she said.

The ICDF, established in 1991 as a branch of the economic ministry to provide financing to needy nations in 1991, became an independent corporate body under supervision of the foreign ministry in July.

Taiwan, which holds foreign reserves of $87.25 billion, uses the ICDF to improve official and substantive ties with other countries in the face of its diplomatic rivalry with Beijing.

The ICDF had received from the Taiwan government some $382 million and granted $320 million in loans to foreign countries.

Meanwhile, the United Daily News said the remains of the fund will be used mainly to bankroll projects in seven Central American countries, the island's diplomatic allies.

The daily said the foreign ministry was unhappy with Manila's speaking against the island's bid to join the United Nations during a UN meeting in September and its failure to help Taipei upgrade its representation a summit of the Asia Pacific Economic Cooperation (APEC) forum.

Taiwan's President Lee Teng-hui did not join an APEC leaders' summit in the Philippines on November 25 due to opposition from China which considers Taiwan a renegade province.

Thanks to a US$23.5 million loan by the Taiwan government, a Taiwan-Philippines joint venture has completed the first stage of a 325-hectare (800 acre) industrial park at Subic Bay.

In late 1993, Taiwan unveiled its so-called "Southward Investment Policy," encouraging Taiwanese businesses to invest in the Philippines, Singapore, Thailand, Indonesia and Vietnam. None of Southeast Asian countries maintain official relations with Taiwan, but the export-oriented island has been a key investor in the region.