Taiwanese President Tsai Ing-wen touches a ceremonial orb to inaugurate the production of domestically-made submarines. The move marks a step forward for the island's defence strategy amid elevated tensions with China.Credit:AP
He said he hoped to see the first projects start within the next year or two.
The plan,initiated with the signing of an agreement between the US and Taiwan in September,will to raise funds through bonds aimed at Taiwanese banks,insurers and other private capital. It is an opportunity for both Washington and Taipei to counter China's global infrastructure spree amid concerns about Beijing's commitment to international projects and worsening finances among developing countries.
The Belt and Road Initiative (BRI) relies heavily on loans from Beijing to governments and typically involves Chinese state-owned enterprises. The Taiwan-US plan,however,"strongly emphasises the participation of the private sector,while also stressing that funds should be raised via the market,which makes it highly transparent,"Su said.
A pedestrian walks past a construction site in Sihanoukville,Cambodia,where an infusion of Chinese-built infrastructure promises to pay off with jobs and prosperity.Credit:Bloomberg
In May,World Bank President David Malpass urged G20 countries to ensure greater transparency on government debt contracts,saying it was the only way to"balance the interests of the people with the interests of those signing the debt and investment contracts."
Taiwan's infrastructure lending intends to be more transparent through the greater disclosure of information,such as amounts raised,yields and intended use,as part of the bond-sale process.
The island is the latest addition to an expanding roster of US partnerships on infrastructure investment in third countries. Sixteen other countries have reached similar agreements with Washington,according to Su,under which companies from those countries work with the US International Development Finance Corporation to fund infrastructure projects. Japan,South Korea and Australia announced a partnership with the US in 2018.