Taiwanese President Chen Shui-bian has sought to clarify a media report about a US$250 million fund, saying it was not used to dole out aid to the island's allies in Central and South America but to fund investments in the regions.
At the same time, he said that if Taiwan were to win international friendship, it was necessary to create a 'win-win' situation with others. He also said that in its toughest economic times, Taiwan had received international aid, and the island had an obligation to give help to other countries in need.
Mr Chen's comments came during a trip to Nicaragua and followed criticism from Taiwan's opposition camp that he had wasted taxpayers' money to buy better foreign relations.
There was confusion in the initial report about the fund because of information released by officials travelling with Mr Chen, prompting his government's information office to apologise for being slow to issue a clarification.
Mr Chen said: 'We want to change the old model of adding to our allies. This is not dollar diplomacy, but a way to strengthen our investment in our allies.'
He said it was impossible for Taiwan to spend big in a race with the mainland for foreign ties.
