The Finance Minister, Dr. Su Jain-Rong attended the 2021 APEC Virtual Finance Ministers’ Meeting (VFMM) hosted by the New Zealand Deputy Prime Minister and the Minister of Finance, Grant Robertson on October 22, 2021. The delegates led by Minister Su included senior officials from the Ministry of Finance, the Central Bank of the Republic of China (Taiwan), the Ministry of Foreign Affairs, the Financial Supervisory Commission, the National Development Council, and the Directorate-General of Budget, Accounting and Statistics, Executive Yuan. Minister Su highlighted Taiwan’s efforts on maintaining fiscal sustainability by sharing our experiences on the use of fiscal measures in response to the COVID-19 pandemic to promote economic recovery and our commitment to prudent fiscal management.
The Ministry of Finance stated that the discussion of the 2021 APEC VFMM included responding to COVID-19 for a sustainable and inclusive recovery as well as the use of fiscal policy and budget management to address ongoing challenges, and the representatives of the APEC Business Advisory Council proposed policy recommendations to Finance Ministers. Minister Su shared his views in the meeting and underlined that the special budget has been expanded several times in response to the pandemic, leading to a growth of debt-to-GDP ratio to 29.6%; nonetheless, it is still under control and allowing sufficient fiscal space. Furthermore, international credit rating companies either upgraded or gave positive evaluations to Taiwan’s sovereign credit rating or rating outlook this year, recognizing its efforts on fiscal management. As the pandemic gradually subsides and economic activities return to normal, Taiwan will continue to promote the Forward-Looking Infrastructure Program, so as to advance the recovery, drive the natural growth of revenues, and further cultivate fiscal sustainability and resilience.
The Ministry of Finance stressed that the APEC Ministers endorsed the Joint Ministerial Statement, which will be submitted to the APEC Economic Leaders’ Meeting held in November this year. The summary is as follows:
- The APEC region’s GDP is expected to grow by over 6 percent in 2021. However, the recovery is characterized by significant divergences across economies. The economic recovery also remains exposed to downside risks. These include the spread of new variants of the COVID-19 virus and insufficient rates of vaccination, together with economic risks such as inflation pressures, the emergence of new supply chain disruptions, and supply-side constraints.
- We use all available policy tools to address the adverse consequences of COVID-19 and support a strong, sustainable, balanced, and inclusive recovery, so as to avoid any premature withdrawal of support measures, provide targeted support to the most exposed sectors and workers, as well as address the economic and social effects of the crisis on the most impacted groups.
- Fiscal policy and the budget systems have played a key role in responding to the impacts of the COVID-19 pandemic, preserving jobs and livelihoods, funding necessary public services, and supporting the vulnerable. Fiscal policy should be carefully calibrated to ensure both short-term stabilization and long-term fiscal sustainability goals.
- We commit to addressing longstanding structural challenges and transitions. This includes taking advantage of digitalization and other technologies to reinvigorate productivity growth as well as increase inclusiveness and well-being. We emphasize the importance of quality infrastructure development and investment and sustainable green financing in response to climate change to promote post-pandemic recovery, structural transformation, and regional integration. We encourage exploration the means to mobilize long-term financing and foster private sector involvement.
- The Cebu Action Plan (CAP) is a ten-year roadmap of the Finance Ministers’ Process. Ministers reached a consensus on the second half of the period (2021 - 2025) of the CAP implementation strategy.
- We commit to promoting tax certainty and tackling tax avoidance and evasion in the APEC region. We welcome the historic agreement on an international tax architecture reached by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on October 8 this year.
The Ministry of Finance indicated that facing the challenges of the post-pandemic era, digital transformation, and climate change, APEC economies generally agree on the importance of the commitment to achieving strong, sustainable, balanced, and inclusive growth. Innovation, smooth supply chains, and international cooperation are also crucial elements to advance the prosperity of the APEC region. The Ministry of Finance will continue to actively participate in relevant APEC meetings and exchange policy measures with economies and international organizations, so as to seek cooperative opportunities, actively promote fiscal diplomacy, and enhance Taiwan’s contributions as well as international visibility.
Reference website for the Joint Ministerial Statement of the 28th APEC Finance Ministers’ Meeting in 2021: https://www.apec.org/Meeting-Papers/Sectoral-Ministerial-Meetings/Finance/2021_finance.
Contact person: Ms. Yu- Hsuan Wang, Section Chief.
Contact Number: (02)2322-8183.