Friday, June 19, 2009

Developed Economy: Belated Honor, or New Sorrow?

Developed Economy: Belated Honor, or New Sorrow?
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 19, 2009

Morgan Stanley & Co. (MSCI) has added the Taiwan region of the Republic of China to its "Developed" Markets Watch List. For many people this is a pleasant surprise. After so many years as a "Developing" economy, Taiwan has finally been upgraded.

But amidst the joy lurk unsettling suspicions. Is it really true? According to what criteria can Taiwan be classified as a "Developed Economy?"

Actually Morgan Stanley included Taiwan on its Watch List of Developed Economies based primarily on such indicators as economic development and the size and opennesss of its stock market trading system. Its definition of "Developed Economy" is obviously much narrower than the average person's understanding. Therefore one should not get too excited. The sad fact is that among the four Asian Tigers, Taiwan was the last to pass the bar. This belated honor is a hidden warning.

Has Taiwan really entered the world of "Developed" economies? Let's review its long process of transformation into one of the "Four Asian Tigers." This may provide us with clues about the larger strategic picture.

Actually Taiwan was not that powerful during the era of the "Four Asian Tigers." But it was unfraid to fight for mastery in the international arena. At the time, the Taiwan region's foreign exchange reserves ranked first in the world. Its volume of trade had reached new highs. Per capita income had rapidly increased. Its nimble small and medium industries engaged in fierce battle with world-renowned multinational companies. But all of a sudden Taiwan shifted its energies into the political arena. Its ruling authorities busied themselves amending the constitution, sponsoring referendums, and holding debates on national identity. Legislators busied themselves with fisticuffs and mudslinging in the national legislature. Officials busied themselves making pronouncements. The public busied itself distinguishing between who did and did not "Love Taiwan!" Amidst this daily war of words, the Asian Tiger known as Taiwan forgot that its rivals were not standing still.

Per capita income on Taiwan has not increased in almost a decade. While we stumbled around in the fog, South Korea swiftly surpassed us, Other newly developing states swiftly closed on us from behind. This decade could be called Taiwan's "Lost Decade." During this ten-year period, we busied ourselves slinging mud. We ignored other countries' development. We ignored our own domestic downturn. We even forgot what goals we were pursuing. Today we have been belatedly honored with a "Developed" label. As many people recall the farce that Taiwan has been through over the past decade, they can only shake their heads in despair.

If we look at the term "Developed" from a purely factual perspective, the International Monetary Fund classifed Taiwan as a "Developed" economy years ago. The Republic of China was already one of the world's fourteenth largest trading nations years ago. The IMF had no reason not to recognize it as a "Developed Nation." But over the past decade, its exports ranking has fallen from 18th place to 28th place. Such a massive decline reveals a contraction in our economic strength. it also reflects a loss of public pride. The Ma administration has renewed its push for a Special Trade and Economic Region. This is a plan that Lee Teng-hui and Chen Shui-bian talked about but refused to implement for over ten years. Is this not sad?

Yesterday the Kaohsiung District Prosecutor's Office uncovered government/business collusion involving the Kaohsiung Port Authority. In the name of upgrading Kaohsiung Harbor's ranking, the Kaohsiung Port Authority colluded with shipping companies to falsify shipping container trading volume. Together they fraudulently applied for and received performance bonuses in excess of 300 million NT, over a two year period. Over the past decade, Kaohsiung's global ranking in shipping volume fell from third to thirteenth. This was embarrassing enough. Who knew that instead of engaging in soul-searching, instead of shaping up, officials would instead engage in even more brazen deception? They falsified the numbers, and defrauded the state treasury. They revealed a total inability to rule the nation, but considerable ability to loot the nation's coffers. The scandal was a microsm of Taiwan's Lost Decade. Those who shout "We love Taiwan!" the loudest, inflicted the most grievous injuries. Those who shout "We are rescuing the economy!" inflicted the most grievous damage.

One could say that the advent of "Taiwan the Political Entity" has brought disaster down upon "Taiwan the Economic Entity." After years of adolescence, this Asian Tiger has belatedly been classified as "Developed." But the public is no longer able to experience any joy in this honor. Meanwhile, after years of internal friction, confrontation, and suffering, has Taiwan the Political Entity matured, even slightly? In terms of national identity, the public is as divided as ever. In terms of democracy, partisan power struggles are as vicious as ever. In terms of community development, relief from cynicism and Blue/Green polarization remains as remote as ever.

Can a nation for which the question "Who am I?" divides the public, possibly merit the title "Developed" nation? Can such a nation ensure diversity, freedom, and the pursuit of happiness? If it can, then by all means, let us cling to it and hope for the best.

2009.06.19 04:07 am











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