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Taiwan's debt obligations total almost NT$24 trillion: TIER

Taiwan's debt obligations total almost NT$24 trillion: TIER

Taipei, July 14 (CNA) Taiwan's government debt and future government obligations have reached nearly NT$24 trillion (US$774 billion), which could impose a heavy financial burden on Taiwan, the Taiwan Institute of Economic Research (TIER,???????) said Tuesday. The TIER, one of Taiwan's leading think tanks, said public debt accumulated by the central and local governments stood at NT$5.25 trillion and NT$731.2 billion, respectively, as of the end of 2014, according to Ministry of Finance statistics. The total debt -- NT$5.99 trillion -- was 37.2 percent of gross domestic product in 2014, approaching the average of 40.6 percent ceiling imposed by the Public Debt Act in the previous three years before 2014, TIER President Lin Chien-fu (???) told reporters. That number compares favorably with other advanced economies, including Germany (with a government debt to GDP ratio of 78 percent in 2013), the United States (101.53 percent), and Japan (230 percent). More problematic, Lin said, are the government's future obligations that are not reflected in the government debt figures, such as pensions to be paid to civil servants, labor insurance program debts, and the cost of private land needed for public use in the future. The total of these obligations over the next 30 years will be an estimated NT$17 trillion to NT$18 trillion, which when added to public government debt totals nearly NT$24 trillion, or about 160 percent of Taiwan's current GDP. Lin said the high debt level is not one the government can ignore, and he appealed to authorities to confront the financial problems now. The central government cannot afford to waste any time in reviewing its retirement pension system, and other social welfare programs, such as retirement schemes for veterans and workers, to put those programs and government finances on sounder footing, Lin said. An editorial published by the Apple Daily last week cited Business Today magazine as warning that Taiwan's pension program for retired civil servants is even more lucrative than Greece's, and warned that the scheme could one day face bankruptcy. Lin also urged local governments to rein in their borrowing to keep their debt from ballooning. Saddled with NT$64.8 billion in debt, Miaoli County in northern Taiwan has sought financial assistance from the central government after having difficulties in paying NT$600 million a month on civil servant salaries and another NT$600 million in pension obligations for retired staff in July. (By Chen Cheng-wei and Frances Huang)


Updated : 2021-09-18 14:13 GMT+08:00