AIIB brings greater investment opportunities: MOEA
By joining the Asian Infrastructure Investment Bank (AIIB) and thus help developing countries build infrastructure, Taiwan will have access to greater investment opportunities, according to a Ministry of Economic Affairs’ (MOEA) analysis.
Becoming a member, in a nutshell, will do more good than harm, said Economics Minister John Deng ( ).
The MOEA handed in its evaluation report on the AIIB to the Legislative Yuan yesterday. The report was allegedly reportedly on March 18 before Taipei formally submitted its letter of intent on March 31 — the application cutoff date.
The report outlines the benefits, strategy and disadvantages of joining the AIIB.
In terms of the benefits, the MOEA said as an important Asian economy with abundant capital reserves, Taiwan will be able to contribute in regional infrastructure investment by joining the AIIB. Through active participation, Taiwan can also stave off the risk of being marginalized in the international community.
The effort will bring new trade, medical knowledge, information technology and environmentrelated investment opportunities, among others.
The MOEA pointed out these opportunities will be a great fit to local insurance firms’ financial needs. With plenty of cash on hand, these companies are looking for investment targets with a reliable return in the long run. Infrastructure projects require a great capital input and have solid longterm return on investment.
Relations with the US and Japan
May Take a Hit
On the strategy side, the MOEA said the formation of the AIIB is transforming member nations’ re- lationships, from the Asia-Pacific Economic Cooperation (APEC) to the Free Trade Area of the AsiaPacific (FTAAP). This will be an opportune moment to initiate discussion on Taiwan’s regional economic integration, before further exploring Taiwan’s strategy and routes to join the Regional Comprehensive Economic Partnership (RCEP).
On the negative side, the MOEA holds that siding with the AIIB may hurt Taiwan’s relations with Washington and Tokyo.
The ministry fears it will have an adverse impact on talks with the U.S. on the Trade and Investment Framework Agreement ( TIFA), making it harder for the nation to join the Trans-Pacific Partnership (TPP).
The AIIB is perceived as a rival to the International Monetary Fund (IMF) and the Asian Development Bank (ADB). The latter is headed by Japan, which is also the largest capital contributor.
The government must take into account how Japan views Taiwan’s participation in the AIIB, as it may impact the two nations’ cooperation relations and Taiwan’s role in the ADB.
In response to Democratic Progressive Party lawmaker Chen Ming-wen’s ( ) question on the U.S.’ response to Taiwan’s application to the AIIB, Deng quoted the Ministry of Foreign Affairs saying that the United States has approved the move.