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Debt prompts fiscal
crisis fears
FINANCIAL FRIGHTENER: Academic Su Jain-rong said
that Taiwan¡¦s debt has increased rapidly, while in the US and Europe debt
problems have taken several decades to develop
By Cheng Chi-fang and Camaron Kao / Staff reporters
Taiwan had piled up approximately NT$6.76 trillion (US$232 billion) in public
debt by the end of last year, or about 49 percent of GDP, raising concerns about
the risk of a debt crisis similar to that faced by Spain and Greece.
The figure represents a 30 percent increase over four years from 2007, when the
national debt amounted to NT$5.18 trillion.
Though statistics show that Taiwan¡¦s debt ratio is lower than Spain¡¦s 69 percent
and Singapore¡¦s 107.6 percent, it is much higher than those of export rivals
South Korea and Hong Kong.
South Korea¡¦s debt ratio stood at 34.2 percent of GDP while Hong Kong¡¦s was 33.8
percent in the same period, according to the IMF.
¡§It seems that Taiwan¡¦s debt ratio is lower than some developed countries, but
it is my concern that Taiwan¡¦s debt increase has accelerated since 2008, while
the US and European countries with debt problems accumulated massive debts over
several decades,¡¨ said Su Jain-rong (Ĭ«Øºa), a professor at National Taipei
University¡¦s College of Public Affairs.
According to the Ministry of Finance, the central government¡¦s debt swelled to
NT$5.77 trillion, a major part of the NT$6.76 trillion in national debt,
comprising 43 percent of the nation¡¦s gross national product in the three years
ending in 2010.
The debt ratio has exceeded the 40 percent ceiling stipulated by the Public Debt
Act.
Sun Keh-nan (®]§JÃø), an assistant professor at the Department of Public Finance
and Tax Administration of National Taipei College of Business, said that
developed countries piled up national debts due to massive spending on public
welfare, but Taiwan¡¦s case is different.
Currently, the ministry¡¦s debt figures do not include potential debts stemming
from public insurance systems designated for manual workers, farmers, public
servants and military personnel.
Taiwan¡¦s potential national debt soared to NT$15 trillion as of the end of last
year, up NT$1.97 trillion from a year earlier, according to the latest figures
released by the Directorate-General of Budget, Accounting and Statistics.
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