Minister Sheu’s Statement on Business Session during the 50th Annual Meeting of ADB (Written Report)
Yu-Jer Sheu, Governor
Mr. Chairman, President Nakao, Fellow Governors, Ladies and Gentlemen,
On behalf of my delegation I would like to extend our thanks for the hospitality of the Government of Japan. Japan is one of the founding members of the ADB and is also the largest shareholder with a 15.607% share by the end of 2016. Our gratitude also goes to Yokohama City, where the 50th Annual Meeting of the Board of Governors of the Asian Development Bank is held. Yokohama City is the earliest port opened to other parts of the world and site of the onset of modernization of international trade in the history of Japan. This venue marks the starting point for the mission to help the Asia-Pacific region reduce poverty. The 50th anniversary marks action plans ahead of the mission for the next 50 years.
Grew Together with ADB for the Past 50 Years
The ADB was established on December 19, 1966 in Manila, the Philippines. As one of the founding members of ADB, we have witnessed its growth from 31 members to 67 members. ADB’s operations in 2016 amounting to US$17.5 billion in approvals for loans and grants were the highest in ADB’s history. Combining the Asian Development Fund’s (ADF) lending operations with ADB’s Ordinary Capital Resources (OCR) starting from January 1, 2017, the loan capacity will increase by more than 50% in the future. The total amount in approvals for loans and grants will be higher than US$20 billion before 2020. ADB will become a powerful support to its Developing Member Countries (DMCs) in need.
With a Gross Domestic Product (GDP) amounting to US$3.2 billion in 1966, we in Taiwan were much in need of financial support for infrastructure development. ADB came to provide timely help by offering 12 loans from 1968 to 1971, amounting to a total of US$100.39 million as a means of support to our efforts to build freeways, a petrochemical industry, and power resources, among others. This established a solid foundation for our rapid economic growth. Since 1972, we have not applied for loans. Instead, in return for ADB's help, we became a donor member, with our donation reaching US$122.06 million. Our GDP soared to US$529.7 billion in 2016. With our economic growth, we hope to continue cooperating with ADB to build a prosperous Asia.
ADB’s New Strategies Meet Asian Development Needs
From less than 30% of global GDP in 2000 to around 40% in 2014, Asia's enviable economy has recorded the strongest economic growth of any region in the world. Over the past 50 years, ADB has contributed much to the economic miracle in Asia. We are especially impressed that ADB has had the vision to face problems in Asia, including accelerating technological change, aging population, social conflict from increasing global volatility and rising inequality, and possible detrimental effects on long-term economic growth. ADB is now proposing a new strategy, “Road to 2030,” to face new challenges.
Having thoroughly reviewed the new strategy of ADB, I would like to share with you some of my observations:
First, the purpose and vision of this new strategy certainly meet the needs of the Asia-Pacific region development.
Despite its rapid growth, the Asia-Pacific region is still facing such problems as poverty, gender disparity, insufficient infrastructure, and vulnerability to natural disasters. In addition, such challenges as emerging new development financial institutions, growing diversity of clients, and Developing Member Countries (DMCs) with good credit standing tapping into financial markets at low interest rates to meet their direct financing requirements are confronting the region. Therefore, ADB had to set up a new strategy. The vision of this new strategy, “A prosperous, inclusive, and resilient Asia-Pacific region free of poverty,” is in line with the Bank's mission and the development needs of the Asia-Pacific region into the future.
Second, the principles of the new strategies highlight ADB’s unique value and manifest its characteristics with other financial institutions.
ADB will commit to expanding the capacity of its financing, thereby upgrading the knowledge and capability of its clients. By differentiated operational strategies, ADB pursues specific client groups in line with their particular needs. Furthermore, ADB is balancing country and regional lending and ramping up its private sector operations to catalyze greater private resources. After carefully studying the details of the new strategy, we affirm that this strategy keeps pace with the times and provides a wider business scope than other financial institutions, serves increasingly diverse clients, and creates the opportunity for the development of more diversified products.
Policies Being Implemented in Our Economy
The Global Competitiveness Report 2016-2017 issued by the World Economic Forum (WEF) on Sept 28, 2016 announced that our score (5.28) ranked us 14th out of 138 economies, reflecting our strong competitiveness. Only India and we had economies which advanced in ranking in Asia. We in Taiwan also have to confront the challenges which were mentioned by the ADB in its new strategy. Therefore, we have to aggressively promote fiscal and economic policy measures and reforms. Since 2016, for the purpose of helping our economy to develop a new, sustainable model for economic growth under the core idea of “innovation, employment, and distribution,” we spared no effort in reinvigorating our domestic economy via strategies on two fronts – “Stimulate Investment in the Local Market” and “Implement Structural Reform.” Here I briefly explain them as follows:
To stimulate investment in the domestic market, we have planned a series of policies and promoted the so-called “5 plus 2” industrial innovation, which consists of the Asia Silicon Valley Plan, Intelligent Machinery, Green Energy Technology, Biotech & Health Care, National Defense, and later, Neo Agriculture, and Circular Economy together with some “Digital Economy Innovation” industries. In the meantime, we are aggressively investing in the infrastructure of the next generation with the hope of answering the needs of new industries, new technologies, and new lifestyles.
To implement structural reform, we have also planned a series of measures such as “Regulatory Reform,” including reforms aimed at deregulating our financial and economic legal systems and harmonizing regulations related to the digital economy and international standards. “Increasing Manpower Quality” and “Improving the National Land Planning System,” including institutional reforms aimed at the use of land resources, personnel training and recruitment, and capital allocation. We have planned on raising fertility and the labor participation rate and other manpower resource measures. Our Income Distribution Improvement Program includes strategies for improving social welfare, employment, wages, and taxation to support the economically disadvantaged, raise wage standards, and reduce income inequality.
In addition, we are actively promoting our “Foresight Infrastructure Plan” which includes constructing a safe and convenient transportation system, construction of sustainable water resources in response to climate change, promoting the sustainable construction of a green environment, creating intelligent monitoring of public land and digital broadband service construction, and improving the balance between urban and rural regions. The purpose of the “Foresight Infrastructure Plan” is to respond to the domestic and foreign key needs in new industries, new technologies, and new life trends, to promote local overall development and regional balance, and to set up the solid foundation for national future development.
With our continuous efforts and economic growth, we hope to be able to assist ADB to achieve its vision of "A prosperous, inclusive, and resilient Asia-Pacific region free of poverty."
Our Sincere Hope to Work with ADB
According to the “Key Indicators for Asia and the Pacific 2016” published by ADB in November 2016, Asia and the Pacific accounted for 43.4% of global energy use, and the total greenhouse gas (GHG) emissions in Asia and the Pacific grew faster than the global average over the past decade. In order to fulfill the responsibility as a member of the global village, we are diversifying our energy supply by tapping into renewable energies, such as solar, wind, and biogas production using pig farm waste, based on the concept of a circular economy. We anticipate that by 2025, 20% of our energy will come from renewable energy. We enacted the Greenhouse Gas Reduction and Management Act in July 2015, setting our long-term target to reduce our emissions by at least 50% below 2005 levels by the year 2050. We would like to share our efforts and experience in environmental protection with all member countries and hope to cooperate with ADB to maintain a Sustainable Earth.
ADB seeks support for regional cooperation and integration under this new strategy by using the bank’s special advantages to strengthen Information and Communication Technology (ICT) connectivity as well as digital cross-border trade flows in order to promote optimizing regional cooperation and integration. The "New Southbound Policy” (NSP) currently implemented by Taiwan also emphasizes regional cooperation. Asia is the center of global economic development in the 21st century, in terms of population, gross domestic product, total trade volume, and growth rate. Asia is therefore the most important driver of global economic development. Because the Asian economy is highly dependent on global trade and faces a possible trade liberalization slowdown, we seek to establish closer relationships with Southeast and South Asian member countries as well as Australia and New Zealand as potential strategic partners for regional social and economic cooperation. Based on the core values of longstanding close ties, multiple means of development, and mutual resource sharing, we look forward to creating a win-win cooperation model in connectivity of trade, technology, and culture with New Southbound countries and cultivating "Economic Community Awareness."
With the fact that our New Southbound Policy meets closely with the objectives of this annual meeting with the theme "Building Together the Prosperity of Asia," we earnestly hope to get support from ADB and its member countries, so that we can work hand in hand to create greater and sustainable economic prosperity in Asia.
It is a pleasure to take this opportunity to congratulate President Takehiko Nakao on his successful re-election. Under his excellent leadership, it is clear that ADB will increase its lending capacity and contribute to the Asia-Pacific region by increasing its prosperity. The ADB will be able to meet the President's expectations, to provide member countries with stronger, better, and faster service, and to lead the Bank to bring new economic development opportunities.
Last but not least, I would like to reiterate that the Republic of China (Taiwan) is a founding member of ADB and has fully carried out her membership responsibilities. My delegation continues to protest against the unilateral alteration of our membership designation. I would also like to call on member countries to respect each other concerning the equal opportunities of hosting meetings and workshops of ADB.
With this hope I conclude my address and I wish this meeting every success. Thank you.