Tuesday, August 5, 2008

Reform Now! With a Sure Hand at the Helm

Reform Now! With a Sure Hand at the Helm
KMT Department of Cultural Affairs
August 5, 2008

A new party is in office, sweeping out corruption and offering the nation a rebirth of hope

The new administration has already had an impact on mainland tourism

The new administration is doing its utmost to fight inflation and rescue the economy

A new party is in office, sweeping out corruption and offering the nation a rebirth of hope

A new political party is in office. Its assumption of office, alas, coincided with the rise in international oil prices, inflation, and the global stock market debacle. Taiwan was not spared. It is simply not possible for the cabinet to immediately show the public a glowing report card. Premier Liu naturally feels the weight of his office on his shoullders. He has no choice however, but to revise the KMT's election slogan from "Things will immediately get better!" to "Things will immediately begin getting better!" An expectant mother must undergo nine months of pregnancy -- ten months according to Chinese convention. The new administration is being asked to clean up its predecessor's mess in a few short months. This is no easy matter. We understand the public mood. We understand its high expectations. On May 20, once the new administration took over, at least three things completely changed for the better.

One. Now that the Ma administration is in office, government agencies are clean and uncorrupt. The Presidential Office is no longer inviting cronies over for "dumpling banquets." High officials are no longer engaged in insider trading. First Family members are no longer making back door deals. The corrupt political culture of the previous eight years has clearly been corrected.

Two. Presidential Office and Executive Yuan leaders are doing their utmost to create a harmonious society. No longer are political leaders taking the lead in inciting communal strife, tearing society apart. Past excesses during political mobilizations were an object lesson. The new administration understands that society needs time to heal. We must promote social unity and care more for the underprivileged members of society. This is a dramatic departure from the previous eight years.

Three. Cross-Strait relations have immediately improved. The potential fuse for conflict has been removed. With the new administration in office, talks between ARATS and the SEF, broken off for nine years, have been resumed. Ma Ying-jeou has made good on his campaign promise to permit direct weekend charter flights to bring mainland tourists to Taiwan on July 4th. The new administration has substituted openness for its predecessor's Closed Door Policy. It has substituted reconciliation for confrontation. More peaceful and harmonious cross-Strait relations mean greater opportunities for cross-Strait economic cooperation.

The new administration has already had an impact on mainland tourism

The very first July 4th cross-Strait weekend charter flight brought 735 mainland tourists to Taiwan. The event was widely covered by the media. Its ten day itinerary resulted in an estimated 50 million NT in retail sales. Beginning on July 18 mainland tourists will begin arriving on Taiwan officially, as a matter of routine. As the number of charter flights and passengers per flight increase, profits earned by the travel, restaurant, transportation, specialty retail store, and peripheral industries will increase sharply.

Tourism Association estimates are even more optimistic. If Taiwan allows 3000 mainland tourists to visit every day, in one year it will have allowed in one million tourists. If each mainland tourist stays seven to ten days, each will spend approximately 50,000 NT, not including air fare. If we take into account the consumer spending multiplier effect, this will increase the net worth of Taiwan's service industries by at least 100 billion NT.

Over the past decade or so, many Taiwan tourists have visited the mainland. They have already made an incalculable contribution to the mainland's foreign exchange reserves, and allowed the mainland to earn Taiwan money. But for the past eight years, the DPP has imposed a Closed Door Policy, refusing to expand weekend charter flights, refusing to permit mainland tourists to come to Taiwan to spend their tourist dollars. This has led to an imbalance in tourist trade. President Ma has declared that after weekend charter flights have been in place for six months, daily charter flights will be implemented, and in the second half of next year, normally-scheduled flights will be implemented. At that time the salutary economic impact of mainland tourism will become even more apparent.

The KMT's bold opening to the mainland has predictably inspired DPP envy. DPP leaders have been sounding sour notes and making snide comments all the way. Paradoxically, local DPP county and municipal leaders in southern Taiwan have collectively demanded that weekend charter flights "Enter from the South, and Depart from the South." The Kaohsiung Municipal Government dispatched a large team of representatives to Beijing to participate in a tourism industry expo. Yunlin County Commissioner Su Chi-feng visited Macau, Beijing, and Tianjing, in an effort to promote the sale of agricultural products and cross-Strait religious exchanges. Reality has proven the KMT correct in its policy of opening to the mainland. Grass roots political sentiment has compelled local DPP county and municipal leaders to follow suit. DPP Chairperson Tsai Ying-wen has occupied a number of important government positions over the years, during which she obstructed the normalization of cross-Strait relations. She needs to change her tune and listen to the people. She should not remain at loggerheads with DPP county and municipal leaders, to the detriment of the interests of the public in southern Taiwan. The normalization of cross-Strait relations will increase people to people understanding, promote cross-Strait reconciliation, and ensure cross-Strait peace. The Republic of China's system of freedom and democracy, free speech, differs little from the city to the countryside. These are factors beneficial to future cross-Strait development.

The new administration is doing its utmost to fight inflation and rescue the economy

On May 20, the new administration assumed office. It had no time to bring itself up to speed. It had to deal with the global inflationary crisis and the global stock market debacle. Peoples' pocket books had dramatically shrunk. Their pain index had dramatically increased. Opposition DPP leaders turned a blind eye to reality, and blasted the new administration's every move. They said that gasoline and electricity prices must remain frozen, and that the government must not stimulate domestic demand.

But the fact is ever since mid 2007, international oil prices have been skyrocketing. The US subprime mortgage crisis has persisted as a result of continuing uncertainty. The global economy is experiencing a crisis not seen for two decades, and consumer prices are fluctuating wildly. What's worse, the situation is deteriorating by the day. Taiwan's economy, which has long relied upon foreign exports, could hardly avoid being affected. In fact, the June Consumer Price Index (CPI) increased by 4.97% over the past year. In part this reflects the DPP's policy of deliberately suppressing necessary oil price increases. But compared to other southeast Asian economies 99% dependent upon imported oil, such as South Korea, Singapore, Hong Kong, our consumer prices have been relatively stable.

The government is responding to the domestic and global economic crisis, taking concrete steps to stabilize consumer prices, promote economic development, normalize cross-Strait relations, and accelerate the reform of monetary policy and tax policy.

Concrete Measures: The Government's Three-Pronged Approach

One. Stablize Consumer Prices: On May 22, the Executive Yuan announced its "Consumer Price Stabilization Plan." It established a "Consumer Price Stabilization Unit" to monitor consumer prices and coordinate with domestic retailers such as Carrefours, RT Mart, Geant, Sungching, Wellcome, and PXMart, which comprise 761 retail stores. It is establishing a special zone for low-priced consumer products. Together with web retailers such as PCHome, Yahoo! Kimo, it is providing an abundant supply of low-priced products, and preventing price inflation.

Two. Stimulate Domestic Demand, Promote Economic Growth: Accelerate plans to "increase local construction, stimulate domestic demand." If successful, annual government and state owned enterprise investments will increase 10.5% and 7.7% respectively, becoming the impetus for economic growth in the second half of the year.

Three. Protect the Underprivileged, Reduce the Impact of Inflation on Middle and Low Income Citizens: Promote the "Young Families Policy," providing young married couples with rent subsidies and no interest loans for first home purchases. To be implemented in 2009. Subsidies for Infants will be made a long-term plan. To be implemented in 2010. A "Working Families Income Guarantee Plan" directed at 450,000 low-income families, providing 6 month subsidies, from September 2008 to February 2009. This will maintain the purchasing power of borderline destitute workers and families during a period of inflation.

The KMT and the new administration are committed to "complete government, complete responsibility." We feel the people's pain. The KMT and the new administration are working hand in glove to achieve these goals. Together we will lead the nation safely out of the current financial crisis.

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