Thursday, September 20, 2007

Promoting Plebiscites vs. Growing the Economy

Promoting Plebiscites vs. Growing the Economy
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 20, 2007

While receiving Taiwan business representatives the other day, Chen Shui-bian criticized a Blue Camp television advertisement. In this Kuomintang produced ad, a Korean businessperson criticizes Taiwan, saying it has become too politicized, and that the government has neglected the economy. He says that Taiwan's competitiveness is the lowest among the four Asian dragons. In fact, he says, Taiwan no longer qualifies as an Asian dragon. In response to this ad, President Chen cited economic growth rates, consumer price indices, unemployment rates, and the reactions of global economic fora. He said the data proved that Taiwan's economic performance was actually better than South Korea's. Therefore the Blue Camp ad was a typical case of "Poormouthing Taiwan."

Over the past year, President Chen Shui-bian has repeatedly contradicted himself. His public remarks have been riddled with internal contradictions. People have become so accustomed to his doubletalk, they no longer consider it noteworthy. Even Uncle Sam considers him a headache. Many people tune him out in order to spare themselves the frustration. But when A Bian gushes about Taiwan's economy in such glowing terms, and dismisses anyone who complains as "Poormouthing Taiwan," we have no choice but to respond.

When appraising a nation's economy, one usually relies on certain economic indicators. These include GDP growth rates, price indices, unemployment rates, and consumer confidence indices. If one wishes to examine an economy in greater detail, one must include consumer spending, investment outlays, and exports. Only then can one discern the significance of the numbers. As everyone knows, the numbers for Taiwan's GDP growth over the past few years don't look that bad. But most of that growth was derived from exports. Domestic consumption and investment growth were extremely low. Fourth quarter investment grew slightly last year. But compared to growth in the distant past, the discrepancy was huge. Let's look at the unemployment figures. What's behind these numbers? To what extent do Taiwan's numbers reflect the Executive Yuan's artificial stimulus packages? This needs clarification. Unemployed workers hired by the government and assigned to data entry or spraying insecticide to prevent Dengue fever are "employed" in the short-term. But long-term their inclusion in the ranks of the employed is fraudulent.

If we really want to diagnose Taiwan's economic health, we must look at all the data, not just those that catch the eye but whose significance is dubious. Taiwan's economic growth is concentrated on export sales. Domestic consumer spending and investment is clearly in decline. This reflects serious problems. Why do Taiwan's consumers lack confidence? Even if Taiwan's wage inequality is less serious than South Korea's, why has it suddenly worsened in recent years? What is the potential risk when Taiwan's GDP growth depends solely on exports? Why are domestic and foreign enterprises unwilling to list on the TAIEX, but instead opt for Hong Kong or Singapore? Why is Taiwan's financial market unable to make the world's top 100 list? Once the ASEAN plus Three free trade region takes shape, what will happen to Taiwan's export dependent economic engine? If this single engine falters, how can Taiwan's economy continue to fly? These are hidden concerns beyond the one-sided data President Chen cited. If people voice doubts, whether they are South Korean or African, the government should graciously respond "Thank you." If it reflexively rejects all dissent as "Poormouthing Taiwan," or lashes back with the accusation "You don't love Taiwan," then it is acting remarkably like a fascist regime.

Over the past two weeks, this newspaper has issued special editions investigating Taiwan's prospects. On September 10 we pointed out that it is natural for Taiwan to want to build its own brand. It is natural for Taiwan to want to seize the initiative and get a leg up in the knowledge economy. But a brand cannot be disconnected from it means of production upstream or its markets downstream. Therefore brand building must be international in nature. That was the theme of our September 17 edition. Take Acer as an example. It must set up production in the most suitable location in the world. It must take advantage of every opportunity to market its products to every corner of the globe. Only then can it become a great brand. If the government forbids a business to shift its production to certain locales, or market its products to certain regions, even if its restrictions seem minor, it will impose an intolerable burden on a business's brand strategy. For Taiwan's economy it amounts to a knife through the heart.

The Democratic Progressive Party has been in power for over seven years. Has it has been a benefit or a detriment to Taiwan businesses? Don't bother dredging up economic statistics. Just look at all the businesses leaving in droves, and the market mired in recession. If economic problems weren't so difficult to solve, why would A Bian bother provoking Uncle Sam with his meaningless "Plebiscite to Join the UN?" After seven years in power, all the DPP can do is demagogue the "nativization, rectification of names" issue. Is this not an open admission that economic issues are too difficult and painful for the government to tackle?

中國時報  2007.09.20







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