Lausanne and Standard & Poor's Warning

Lausanne and Standard & Poor's Warning
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
May 26, 2009

International rating agencies seem to be out of step with Taiwan's political rhythms. Taiwan's stock market rose sharply. Media polls clearly show support for government leaders increasing. Yet on the first anniversary of President Ma's inauguration, these agencies issued a number of reports unfavorable to Taiwan.

On May 20, the Management School in Lausanne, Switzerland (IMD) released its Global Competitiveness Report. Taiwan fell 10 places. Moreover, Taiwan's setback was the largest of the Four Asian Tigers. It even lost out to mainland China. Standard & Poor's, the leading international credit rating agency, also released its "stress test" data assessments. Assuming that the economic recession lasts until 2012, it concluded that Taiwan's sovereign credit rating would drop five grades, to BBB. It would be bring up the rear in the Asian region. It would fall behind the Chinese mainland. These two messages were issued by an internationally respected rating agency, and merit serious consideration.

Let's look at the IMD and Standard & Poor's ratings. At first they seem to share no common ground. The IMD believes that five challenges face Taiwan: innovation and the attraction of talent, the creation of a sustainable environment, the promotion of cross-strait relations, effective corporate governance, and financial reforms. The Standard & Poor's assessment notes the budget deficit, debt structure, and financial system. Compare the two assessments and the obvious common ground is the government's finances. The Liu cabinet's debt crisis is undeniably Taiwan's Achilles Heel. The two assessments released on May 20 are not the only ones. The Standard & Poor's ratings earlier this year, and the Fitch credit rating last year, downgraded Taiwan's ratings due to the same concerns. The Ma administration's response to Taiwan's downgraded ratings has focused on Taiwan's R&D and innovation. Actually, all the administration's policies need money. A government's financial solvency is unquestionably more important than anything else.

We already know Taiwan's Achilles Heel. Therefore we hope the Ma administration will address the problem, and not offer some officialese excuse. For example, high-level cabinet members have cited "a depressed global economy, and increased government spending" as an excuse for Taiwan's worsening deficit. But this argument is at variance with the facts. The financial tsunami and economic depression have swept the globe. Every nation has responded by increasing government spending. So why have the ROC's finances deteriorated more than other countries, and resulted in a rapid downgrading of our sovereign credit rating? All nations face the same recession. So why have our finances deteriorated while our competitors' have improved? This reveals we have special problems that must be confronted honestly.

Over the past year, the harshest domestic criticism of the cabinet has been reserved for the international economic recession. This substantially increased the administration's public expenditures. Yet the administration chose to launch a series of tax cut measures, including income tax cuts, business tax cuts, inheritance tax cuts, and excise tax cuts. These amount to over 100 billion NT per annum, and represent a serious increase in our deficit. Increasing spending while reducing taxes is self-contradictory. Pleasing both sides is impossible. With the economic downturn at home and abroad, and reduced corporate profits, everyone wants a tax cut. Therefore the time is not right for tax cuts. But the Liu cabinet refused to listen, and insisted on looking into tax cuts. It was unable to say no to special interest groups. The predictable result was a loss of revenue, and a deterioration in the government's finances.

In addition to urgent financial problems, the ROC government needs to increase its efficiency and carry out basic infrastructure projects. The IMD rating included over 300 items. One third of these were a survey of opinion leaders. Government efficiency would not show up in the current economic data. But they would leave an impression in the minds of corporate leaders. For example, the Executive Yuan ritually launches a new industry every week. But much of the content is merely a repackaging of the policies of various ministries. It was in a hurry to release its economic recovery program before May 20. But it lacked depth and substance. The administration does not appear to have followed up on the first few policies it implemented. Various ministries often use product placement to promote their policies. But business leaders see right through the government's ineffectual show. This repackaging of the government's policies fail to achieve anything of substance. This is another crisis the Ma administration faces.

The TAIEX rallied just before May 20. But international rating agencies poured cold water on the rally. Anyone who looked only at the TAIEX would say the cabinet is doing better. Anyone who read only the IMD report would recommend that the Cabinet make immediate changes. The welfare of the public on Taiwan over the next few years depends upon how President Ma interprets this discordant data.

洛桑與標準普爾給台灣的評等警訊
【聯合報╱社論】
2009.05.26 04:01 am

國際間的評等機構似乎非常不配合台灣的政治節拍，竟然在台灣股市大漲、各媒體民調政府首長支持率明顯攀升、馬總統就職一周年之際，發布了諸多不利於台灣的訊息。

瑞士洛桑管理學院（ＩＭＤ）於五月廿日發布全球競爭力報告，台灣的排名驟然滑落十名。不只如此，台灣的退步在四小龍中幅度最大，更輸給中國大陸。另一方面，國際信評龍頭標準普爾也公布其「壓力測試」評估數據：該公司假設此波經濟衰退時間延長至二○一二年，發現屆時台灣的主權評等將大降五級，淪為ＢＢＢ的低劣等級，是亞洲地區的後段班，也落在中國大陸之後。這兩項訊息都是由具有國際公信力的機構所發，值得嚴肅解讀。

首先，看看ＩＭＤ評估與標準普爾評等的判準之間有沒有什麼交集。ＩＭＤ認為台灣面臨五項挑戰，分別是創新與吸引人才、永續環境的建立、兩岸關係的推展、公司治理的強化與財政改革的成效。至於標準普爾，其評估主要項目則為財政赤字、債務結構、金融體系等。將這兩組評估判準相比，我們當能發現，其最明顯的交集就是「政府財政」。不可諱言，劉內閣財政債務的危機，幾乎是台灣面對國外所有評等時的罩門，不但五二○公布的兩項評比受此拖累，今年稍早標準普爾與去年惠譽信評對台灣的降等，也都是基於相同的憂慮。馬政府日前對台灣評等下降的回應都集中在檢討台灣的「研發創新」；但其實政府的一切施政都需要錢，故政府財政的續航力，絕對比其他項目更為關鍵。

既然找到了台灣評等落後最關鍵的罩門，接下來我們則希望馬政府能解決問題，而不要做一些官樣文章式的辯解。內閣高層經常拿「國際景氣不佳、政府支出擴張」為藉口，來合理化台灣財政赤字的惡化；但這樣的說辭恐怕與實情有所差距。此次金融海嘯與經濟蕭條席捲全球，每個國家確都是以擴張政府支出的方式因應。但是，為什麼台灣的財政惡化硬是比別的國家嚴重，以致我們的排名急遽下滑呢？同樣面對蕭條，但「我消敵長」的客觀形勢，當然顯示台灣有其特別的問題，必須誠實面對。

在過去一年，國內輿論對內閣批評最嚴厲的，就是其在因應國際經濟蕭條、大幅擴增政府公共支出的同時，竟然又推出一連串的減稅措施，包括所得稅、營所稅、遺贈稅、貨物稅等等，累計金額每年達一千多億元，嚴重惡化財政。直觀而言，擴大支出與減少稅收是兩個背道而馳的政策，想要兩面討好注定是不可能的。本來，在國內外經濟不景氣、企業利潤縮減之際，大家都希望減稅，因此大環境原本就不適合討論稅改；而劉內閣既不聽建言執意要在此期間研議稅改，又無法對利益團體的減稅壓力說「不」，自然造成稅收流失、財政惡化的後果。

除了財政問題必須立即面對之外，台灣的政府效能與基礎建設等，也有不少值得改進的空間。在ＩＭＤ三百多條評比項目中，有三分之一是對意見領袖的問卷調查。像政府效能這一類的面向，並不會呈現在當前的經濟數據上，卻會在企業領袖心中留下客觀的印象。例如，雖然行政院行禮如儀地每周推出一項新興產業，但不少內容卻像是各部會施政計畫的包裝，急著想在五二○之前端出，殊少深刻周延的建設內涵，而最早推出數案的後續執行，亦不見追蹤成效。儘管各部會經常以置入性行銷的作法宣揚種種政策，但企業領袖依然看到政府效能不彰的景況。這些政府施政包裝與實際執行之間的落差，恐怕也反映了馬政府的另一種危機。

五二○前後台股熱呼呼地捧場，但外國評等機構卻澆下冷冽冽的冰水。只看台股的人會說內閣「漸入佳境」，只讀ＩＭＤ報告的人會建議內閣「立即調整」。台灣人民未來數年的福祉，端看馬總統要怎麼解讀這些不協調的數據了。