TAIPEI (TVBS News) — Amid growing discussions about Taiwan's financial future, the island's Ministry of Finance (MOF, 財政部) has called for broad societal agreement before proceeding with the creation of a national sovereign wealth fund, according to a comprehensive report submitted Wednesday (May 7) to the Finance Committee of the Legislative Yuan (立法院財委會), Taiwan's parliament. The carefully worded document stressed that establishing such a fund requires thorough assessment and deliberation, underscoring the multifaceted challenges involved in managing state assets on a global investment scale.
Drawing on international standards, the finance ministry referenced the International Monetary Fund's (IMF) Santiago Principles in its analysis, explaining that sovereign wealth funds are specialized government-established investment vehicles designed to achieve specific macroeconomic objectives. These sophisticated financial instruments typically derive their capital from various government revenue streams, including energy sector profits, accumulated budget surpluses, or other state-owned financial assets that can be strategically deployed in global markets for long-term national benefit.
Finance officials outlined multiple critical factors that must be thoroughly evaluated before Taiwan commits to creating such a fund, including its fundamental objectives, comprehensive legal structure, robust supervision protocols, sustainable funding mechanisms, and appropriate governance architecture. The report also cited input from the National Development Council (NDC, 國發會), Taiwan's top economic planning agency, which stated during a high-level government coordination meeting held October 16, 2023, that any sovereign wealth fund initiative should fulfill clearly defined strategic imperatives and receive broad support across both government and civil society sectors.
The finance ministry repeatedly emphasized throughout its report that establishing a sovereign wealth fund would require exceptionally careful planning regarding its optimal size and identifying appropriate funding sources without disrupting existing fiscal priorities. Officials also underscored the critical requirement for sophisticated expertise across multiple domains, including sector-specific industrial knowledge, advanced financial market investment strategies, and comprehensive risk management protocols. Looking ahead to concrete next steps, the parliamentary Finance Committee has scheduled a specialized hearing for May 8, where ministry representatives will elaborate on potential roles for Taiwan's central bank and various existing government investment vehicles in the proposed sovereign wealth framework. ★