A senior diplomat once complained, in recent years no matter what kind of progress we have made in foreign relations, the first reaction citizens have is usually not, "what efforts have the diplomats made?" but rather "how much did it cost?"

"Not even mentioning diplomatic objectives, assisting relatively backward countries is in and of itself a duty of a member of the international community," he explains. In today's world, countries are closely interdependent, and a country's accomplishments are due not only to their own efforts but must also be credited to other nations--for example markets or resources come from other countries, or other nations contribute to the international economic climate, stabilization of oil prices, and so on . . . . "It's just like taxes. The wealthy take and utilize more social resources, so they should pay relatively more money. Foreign aid can be well-likened to a tax to pay to gain international footing."

The question is: Given our "income" today, how much "tax" is appropriate?

According to the definition of the Organization for Economic Cooperation and Development (OECD), foreign aid includes: grants to underdeveloped nations, non-compensatory technical assistance, as well as low-interest loan packages of which more than 25% is in grants and the interest rate is below the market rate.

According to statistics compiled by OECD, a global institution organized by 24 developed nations including the US, Canada, the UK, Germany, France, Italy, Sweden, Denmark, Australia, and Japan, the amount of the foreign aid given by member countries over the last ten years averages out to 0.35% of the gross national products (GNP) of those nations.

To analyze further the ratio of foreign aid for the various OECD nations, the highest ratio is for the northern European countries. Looking at statistics for 1990, foreign aid took up one percent in Denmark and 0.97% in Sweden. In terms of overall totals, Japan tops the list of "philanthropic nations" with US$8.95 billion in aid (0.32% of GNP), and the US is second with US$7.66 billion (0.15% of GNP). Belgium, whose GNP is approximate to the ROC's, gives US$700 million (0.46% of GNP).

Currently, most foreign economic aid from the ROC goes through the Ministry of Foreign Affairs (MOFA) or the Ministry of Economic Affairs (MOEA), including participation in multilateral aid in international organizations (the Asian Development Bank or the European Bank of Reconstruction and Development); external contributions and assistance based on diplomatic considerations; as well as the Committee of International Technical Cooperation (CITC) which was set up in 1961 to provide agricultural technical assistance to African and Latin American nations; and loans and investment from the International Economic Cooperation Development Fund (IECDF)

0.15% to Get Up to Snuff: In the 1991 fiscal year, the amount of money practically available to the IECDF is about NT$1.2 billion, with about NT$800 million at the CITC. Moreover, the MOFA has been allocated a budget of NT$4.7 billion for international activities, external assistance, and international humanitarian disaster relief for the 1991 fiscal year. If this funding available for foreign economic assistance is used in its entirety, it would account for 0.16% of the ROC's GNP. With the unpublicized budget for political considerations added on, conservatively estimated," last year our country's foreign aid must have been over 0.1% of GNP," gauges Chou Yan, director of the Operations Department of the Management Council of IECDF.

"If we call this give-away diplomacy, then the OECD should be called the 'Give-Away Club,'" says a foreign ministry official, who prefers to remain nameless, with both wonderment and humor.

The United Nations has adopted a standard of 0.75%, in hopes that all developed nations would use this as a milepost.

"GNP is an indicator of a country's capacity for economic activity, which is to say a country's real strength; using this to calculate a country's proportion of foreign aid indicates that the more capability one has, the more one should help others," says Chou Tien-cheng, professor in the Graduate School of Economics at Chung Hsing University.

He simultaneously explained by way of example that foreign aid is a mutually beneficial activity which helps yourself and others. After World War I, because it was impossible for the economies of the European industrial nations to recover, decreasing demand for American products, this caused the US to suffer a decade-long economic disaster. This is precisely the reason why, after the Second World War, the US aggressively undertook foreign aid.

From Recipient to Donor: Looking back, the ROC is one of the main beneficiary countries of this first wave of foreign aid. From 1951 to 1965, US economic assistance constituted 15-20% of capital formation, giving Taiwan the funds to buy resources and manufacturing equipment to make the transition from an agricultural to an industrial economy.

"Now it's time for us to use Taiwan Aid to help others," says Bert Lim, President of the World Economics Society.

Besides "returning the favor," foreign assistance has even more positive significance for Taiwan's diplomatic situation.

"Only if you make a contribution to international society will international organizations welcome you, find you indispensable," concludes Andrew C. Tsuei, chairman of the Association for East Europe Trade Promotion.

"According to international standards, our ratio of foreign aid is on the low side," points out Yan Chou.

At present, the ROC's total external trade is fifteenth largest in the world; GNP is ranked 25th in the world, even exceeding Luxembourg, an OECD member; twenty continuous years of trade surpluses have accumulated one of two largest--if not the largest--foreign exchange reserves in the world; foreign investment in Southeast Asia is second only to Japan. "We have the ability and the strength to play an even more active role in international society," argues Vincent C. Siew, the Minister of Economic Affairs.

Bert Lim further believes that if we want foreign aid to serve as a method for Taiwan to return to international society, then every gesture should reach the international standard; only then will there be a visible impact.

Percentages Aside: There is already a consensus among the MOFA, MOEA, and scholars to expand foreign economic aid; further, the title of the foreign aid bill has already been passed by the Legislative Yuan, making the formal name, "International Cooperation and Development Act." But the detailed contents--whether or not in the future an agency specially responsible for foreign aid will be established, exactly what the foreign aid ratio should be, whether diplomatic or economic considerations should be predominant--have not yet been determined.

Further, besides national strength, the national situation must also be weighed. It is undeniable that at present the idea of foreign aid has not yet been widely accepted by the general public and with the Six-Year National Development Plan just beginning, there is a need for a huge amount of capital at home. Moreover the ROC is not a member nation of the United Nations, and during the Gulf War it arose that humanitarian assistance to the Middle Eastern nations was turned down by the intended recipients; although this was a very unusual case, this naturally creates doubts among citizens about the importance of foreign aid.

It seems that for the ROC, actively trying to reenter international organizations, there are more problems in foreign aid to be resolved than simply, "zero point what percent of GNP."

[Picture Caption]

Agricultural assistance teams are one of the ways we provide foreign aid to other countries. (photo by Huang Lili)