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The Sep. 21 earthquake measured 7.6 on the Richter scale caused great devastation to Taiwan. More than 2,400 people killed and another 100,000 left homeless. The island suffered an estimated NT$300 billion (US$9.2 billion) in losses. The government has made a five-year plan with a budget of NT$140 billion, to do the full restoration of quake-damaged central Taiwan. As for long-term restoration, the Ministry of Finance (MOF) estimates it may cost as much as NT$1 trillion (US$30 billion) for full recovery. Some officials claimed that it would help stimulate domestic demand and economic growth by issuing bonds. However, it is agreed that economic growth may drop 0.1 to 0.2 percentage points during the 4th quarter in 1999. Although long-term economic growth may even be estimated by increases in infrastructure and construction spending, there're still serious financial difficulties existing and waiting to be resolved. A considerable number of these damaged houses were mortgaged residential properties. Banks may be the great victims of the quake. The government basically viewed this problem as "A private commercial issue between creditor banks and mortgagees". In fact, this issue poses more of a threat than the actual earthquake. ---- Adapted from Taiwan International Trade |