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Taiwan: Stimulus Plan to Expand Public Construction

(Mar. 18, 2009) On January 23, 2009, Taiwan's Special Statute for Revitalizing the Economy and Expanding Public Construction was promulgated, in 17 articles. It will remain in effect until December 31, 2012. The goals of the Statute, which was issued in accordance with the Budget Law (art. 83), are to stimulate the economy, effectively expand domestic demand, speed national economic restructuring and upgrading, balance/coordinate local development, establish local economies with unique features, and spur popular investment, in order to give rise to and stabilize economic prosperity, promote employment, and elevate production, cultural life, and the quality of the environment.

The central competent authority is the Council for Economic Planning and Development of the Executive Yuan (Cabinet), which is in charge of overall planning of and deliberation on the Investment Plan for Expanding Public Construction. The central executive agencies are the various ministries and commissions that compile the budget, and they are responsible for the drafting, budget preparation, and advancement of each concrete implementation plan. The local executive authorities – the governments of special municipalities and of county and provincial municipalities – are to compile a related budget, in conformity with budgetary procedures, and take action for disbursement after the given local legislature has approved it. In general, the implementation of public construction in localities populated by indigenous peoples will be by the Council of Indigenous Peoples, but when necessary the Council may delegate other agencies to handle the matter. In allocating expenses, the central executive agencies must give equal consideration to urban areas' unemployment situations as well as differences between north and south.

Under the Statute, an “Investment Plan for Expanding Public Construction” refers to government-sponsored substantial public construction plans or other legally run non-government public construction plans, whose investment projects should: 1) be essential for speeding up the remodeling and upgrading of the state economic structure; 2) be capable of giving full play to economic efficiency; of enhancing national competitiveness, and of providing for contingencies; 3) be markedly effective in increasing employment opportunities; 4) be capable of improving the production environment; or 5) be capable of elevating cultural life and environmental quality.

For government-sponsored, substantial public construction investment plans, of the total expenditures, ordinary expenditures cannot exceed one half of the capitalization threshold. It further states that the central government, in handling the special budget cases under the Statute, should give priority to submitting expenditures for plans already set before the Statute's implementation.

The Statute also sets forth measures in relation to submission of the budget for the public construction plans (e.g., the upper spending limit is NT500 billion (about US$14.5 billion), to be compiled in accordance with special budgetary methods); procedures for screening investment plans; and the drafting and execution of investment plans. (Special Statute for Revitalizing Economy and Expanding Public Construction 6845 THE GAZETTE OF THE OFFICE OF THE PRESIDENT 57-61 (Jan. 23, 2009), GLIN ID No. 215411, available at; for details on the six major target areas, 20 key areas for investment and construction, and 64 specific plans for implementation, and the amounts of money projected for each of the target areas for each of the four years, see Council for Economic Planning and Development, Investment Plans for Revitalizing the Economy and Expanding Public Construction, Feb. 2009 [in Chinese] [summary report], & Feb. 19, 2009 [full report], both available at