Ensure a Five Percent Growth Rate

Ensure a Five Percent Growth Rate
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
August 22, 2011

Summary: President Ma is in the final stages of his current term. His team of advisors must show the same determination they did three years ago, when they safely led Taiwan through the financial tsunami. They must ensure a 5% growth rate at all cost. This is not just about ensuring economic growth rates. It is about ensuring one's political legacy. it is about ensuring confidence, security, and stability. And finally, it is about ensuring a second term.

Full Text below:

Dark clouds menace the presidential election, The DGBAS has just announced its economic forecast for the next two years. The result is a preliminary report card on President Ma's first four-year term. Overall economic growth has been positive according to three criteria, and negative according to one. On the whole, gains have exceeded losses. But the economic growth rate this year was 4.81%, not the hoped for 5%. Next year's estimate is for 4.58%, even worse than this year. President Ma's economic advisors and policies have scored a partial victory. They need to work harder, and achieve more. The January 2012 Presidential Election is five months away. The Ma administration still has time to reach its 5% goal, and add a little extra luster to its report card.

There are many ways to produce a good economic policy report card. One way is to introduce a large number of policies. Another is to amend a large number of regulations. Still another is to complete a large number of public works projects. Politicians usually cite the most favorable indicators. But no matter which indicators they cite, they will only be part of the picture. In the end, one must reevaluate one's larger goal. What is this larger goal? It is the same goal that every government pursues, every waking moment of the day. It is economic growth, price stability, reduced unemployment, higher average incomes, and greater equality.

President Ma and his economic advisors have a good idea where they are headed. For example, real gross domestic product (GDP) may reach 15.6 trillion NT next year, a 19% increase over 13.2 trillion NT figure in 2008. That averages out to about 4.45% a year. The financial tsunami had a huge impact. The economy declined, but commodity prices remained stable despite huge increases in the price of international oil and raw materials. Over four years the increases were kept under 2% a year. The Ma administration's record has been remarkable. The aggregate price index, the pain index, and the unemployment rate, have all fallen over the last two years. But they are still higher than when President Ma took office. Consider national income. This year the gross national product per capita (GNP) will exceed 20,000 USD. Next year it will reach new highs. Incomes have increased. Income distribution, which affects social stability. also improved last year. The gap between the highest and lowest incomes shrank 6.19 times.

But a political record is not graded purely on the basis of policy direction. One has a responsibility to meet one's initial targets. The former represents a policy choice, The latter reflects the level of effort. By this standard President Ma's campaign established a "viable economy" policy blueprint. It included industry deregulation, the normalization of cross-Strait economic and trade relations, and the 12 "I-Taiwan" infrastructure projects. He unquestionably moved Taiwan in the right direction. But the government still has a long way to go before it achieves its "6:3:3" goals, These include a 6% average annual economic growth rate, a 3% unemployment rate, and a 30,000 USD per capita GNP after eight years in office. The Ma administration's efforts are inadequate. The public knows that the administration is not to blame for the European and US financial crisis. But the Ma administration cannot use this as an excuse to rest on its laurels.

The global economy is in chaos. The US economy risks going into recession. The European sovereign debt crisis is entering a new wave of turmoil. The Chinese mainland is feeling the after-effects of gradually tightening monetary policy. Japan is undergoing reconstruction following the Fukushima nuclear plant disaster, and coping with the strong Japanese yen. Nouriel Roubini, aka Dr. Doom, predicted a perfect storm by 2013. That storm seems to be gathering even now. Over 60% of Taiwan's trade is with these four economies. Harsh challenges threaten from without. In the short term, the government most needs to guard against international stock market collapse, and the ripple effect on the Taiwan stock market. Superficially it is concerned about the stock price index. But in essence, its real concern is financial system liquidity and stability. The real economy must not be dragged down by the financial crisis.

The domestic situation is hardly optimistic. Private sector consumer confidence has been undermined by the global stock market crash. Over the past two years, the only factor that has maintained momentum in private consumption has been Mainland tourism to Taiwan. During the first half this declined. The second half shows no signs of improvement. People have already scaled back investments due to the vagaries of the international economy. Public construction projects are nearing completion. ECFA, which exerted an impact for almost a full year, has not inspired much desire to invest in Taiwan. Domestic demand has cooled, making the already slow pace of recovery even slower. If events continue to develop the way they have, they will further weaken consumption and investor confidence, creating a vicious circle. Confidence is defined as expectation of future economic growth. It manifests in the moment, Strong confidence in the economy has a multiplier effect. Therefore, the government must not overlook the warning signs of weakening domestic demand. It must increase domestic demand to increase confidence. This is the government's top economic policy priority.

President Ma is in the final stages of his current term. His team of advisors must show the same determination they did three years ago, when they safely led Taiwan through the financial tsunami. They must ensure a 5% growth rate at all cost. This is not just about ensuring economic growth rates. It is about ensuring one's political legacy. it is about ensuring confidence, security, and stability. And finally, it is about ensuring a second term.

保五 保政績 保信心 保穩定
【聯合報╱社論】 2011.08.22

在總統大選戰雲密布之際，行政院主計處公布了今、明兩年的最新經濟預測，為馬總統這一任四年經濟施政做出了初步成績單。總括來說，經濟成長率三正一負，得多於失；但今年經濟成長率百分之四‧八一，未能保五，明年預估百分之四‧五八，比今年更差，顯示馬總統的財經政策及團隊似乎只打了半場好球，後繼有些乏力。距明年一月總統選舉投票日還有五個月，馬政府仍有足夠的時間再衝刺保五目標，為這份成績單添上光采。

經濟施政成績單可以有很多種，推出多少政策是一種，檢修多少法規是一種，做了多少公共建設也是一種，政治人物通常是選用最有利於己的指標；但無論那一種，都只是局部的呈現，最終還是要回歸總目標的檢驗；而這個總目標，正是任何國家無時無刻不在追求的目標，那就是經濟成長、物價穩定、失業減少、所得成長及平均分配等五項。

就此而言，馬總統及其行政團隊大致達成「方向性」的要求。例如明年實質國內生產毛額（ＧＤＰ）可達十五‧六兆元，比二○○八年就任當年的十三‧一兆元，增加約百分之十九，平均每年約百分之四‧四五，儘管其間經歷了金融海嘯的巨大撞擊，使經濟一度衰退；物價則在國際油價及原物料大漲的環境下保持了穩定，四年間每年漲幅都穩穩控在百分之二以下，馬政府表現可圈可點；與物價合計組成痛苦指數的失業率，近兩年已下降，但仍高於馬總統上任之時；在國民所得方面，今年平均每人國民生產毛額（ＧＮＰ）將跨越二萬美元大關，明年再挑戰新高；在所得增加的同時，影響社會安定的所得分配，去年也獲得改善，最高最低所得差距倍數縮小到六‧一九倍。

不過，施政績效的檢視不只是方向性的達成，亦不能忽視初始預期目標賦予的執行責任，前者代表的是政策方針的選擇，後者反映的是努力程度。準此而言，馬總統競選時訂下的「活力經濟」政策藍圖，包括產業政策鬆綁、兩岸經貿關係正常化、愛台十二項建設等，確是推動台灣經濟前進的正確方向；但距離與這些政策對應的「六三三」目標，政府還有長路要走，包括平均每年經濟成長率百分之六、失業率百分之三及八年後平均每人ＧＮＰ三萬美元等，顯示馬政府團隊的執行力及努力程度都不夠；儘管人民能夠體諒源自歐美的金融海嘯衝擊是非戰之罪，馬政府卻不能以此為藉口而自滿於現狀。

尤其，目前全球經濟、金融情勢混亂不堪，美國經濟再次衰退的風險如影隨形、歐洲主權債務危機又將進入新一波還債高峰的動盪期、中國大陸貨幣政策緊縮的後遺症逐步發酵，災後重建中的日本亦正與日圓強升的衝擊搏鬥，新末日博士羅比尼之前預言的二○一三年「完美風暴」儼然已正匯聚之中，台灣對這四大經濟體的貿易依存度逾六成，外部的嚴酷挑戰已在眼前；但短期面，政府最需嚴防的是國際股市崩跌對台股的波及效應，其形式上關注的雖是股價指數，但實質上須確保的是金融體系的流動性及穩定性，以避免實體經濟遭受金融周轉不順的拖累。

目前內部情勢也無一樂觀，民間消費信心已因全球股災而受到打擊，近兩年維繫民間消費動力於不墜的大陸民眾來台觀光，上半年更已出現衰退，下半年也尚無起色；投資方面，民間已因國際景氣變幻莫測而縮手，擴大公共建設計畫則進入尾聲，而生效快滿一年的兩岸經濟協議（ＥＣＦＡ）也沒有激起明顯的投資台灣意願。國內需求的降溫，讓本已緩慢復甦的步伐走得更沈重；若任令其發展下去，更會反向削弱消費、投資信心，形成惡性循環。信心是對未來經濟成長的預期，並實踐於當下，其強弱會對經濟產生自我實現的加乘力量，因此，政府不能輕忽內需轉弱的警訊，拚內需以振信心，已是政府經濟施政首要之務。

進入馬總統本屆任期的最後階段，行政團隊必須再次拿出三年前帶領台灣安度金融海嘯的決心，全力衝刺保五目標，因為這不僅是在保經濟成長率，更在保政績、保信心、保穩定，以及保下一個任期。