September 15, 1998
Taiwan creates $240 million aid fund for Central American allies

                  TAIPEI, Taiwan (AP) -- Hoping to retain the support of its Central
                  American allies, Taiwan has established a $240 million fund to provide them
                  development aid, the Foreign Ministry said Tuesday.

                  Taiwan will pay $20 million per year into the Central American Economic
                  Cooperation and Development Fund over 12 years, the ministry said.

                  "Based on the principle of not spending the capital, interest accrued on the
                  fund will be enlisted in aiding the countries of Central America in economic
                  and trade development projects," the ministry said in a statement.

                  Taiwan will also provide a $50 million loan to the Central American
                  Economic Integration Bank to nurture small and medium size businesses in
                  the region, the ministry said.

                  Taiwan badly needs those countries to continue to extend diplomatic
                  recognition in order to fend off rival China's attempts to isolate Taiwan in the
                  international community. Central American countries make up seven of the
                  just 27 countries that recognize Taiwan.

                  Assistance comes on top of aid packages Taiwan provides to individual
                  countries in Central America -- much of it distributed through a forum that
                  meets annually -- along with government incentives for Taiwanese businesses
                  to invest in the region.

                     Copyright 1998   The Associated Press.