TAIPEI: Taiwan's "cabinet" is placing a government spending plan amounting to NT$150.66 billion ($4.4 billion) in 2009, before "parliament". A government spokesman said he hoped for speedy approval of the measures to help boost Taiwan's ailing economy in the midst of the global downturn.

Chen Tain-jy, chairman of the Council for Economic Planning and Development, said yesterday that the "cabinet" had given the go-ahead to the plan and would send it to the Legislative Yuan when the session opens on Feb 20.

The spending plan, part of a previously announced scheme to invest about NT$500 billion in public projects over the next four years, will be spent on extending subway lines, revamping road and railway networks, and workers' training.

Besides the NT$150.66 billion expenditure for this year, the government plans to spend another NT$160.67 billion next year, NT$105.07 billion in 2011 and NT$83.6 billion in 2012.

"We're spending more than NT$300 billion, or 62 percent, of the NT$500 billion in the first two years because we need to stimulate our economy during the financial jolt," Chen told a news conference.

The NT$150.7 billion amount, which Chen said will help create 190,000 to 220,000 jobs this year, constitutes around 1 percent of Taiwan's GDP of approximately NT$13 trillion .

Earlier this year, the Legislative Yuan approved about NT$232 billion worth of public spending in its general budget. Chen hoped lawmakers would give the go-ahead for the additional NT$150.66 billion soon.

Taiwan's tech-reliant economy has been badly hit by the global downturn. The island's jobless rate is at a 5-1/2-year high. Exports have logged record slumps over the past few months.

Most economists expect a contraction in Taiwan's economy, this year. Despite the gloomy predictions government officials say they aim for 2 percent growth.

Taiwan's central bank, which maintains the Taiwan dollar in a managed float, has been actively buying US dollars over recent sessions. That's helped to push the local currency to 4-1/2-year lows.

"A weaker Taiwan dollar will help exports but that will make imports more expensive and affect investments," Chen said, when asked whether the Taiwan dollar would weaken further.

Reuters

(HK Edition 02/13/2009 page1)