Ma Administration Decision-Making:
How to Lose Friends and Alienate People
United Daily News editorial (Taipei, Taiwan, ROC)
May 3, 2012
Summary: The controversy over rate hikes, left the impression that "Ma Ying-jeou wants rate hikes." Ma Ying-jeou brought this upon himself. He acted as if he could prevent electricity rates from rising. But electricity is not a free lunch. One either hikes rates, or provides tax subsidizes. If Ma Ying-jeou insists on going down the wrong path, he might as well provide subsidies. Why make such a fuss, only to lose friends and alienate people?
Full Text below:
As President Ma said, any decision has pros and cons. Should electricity rates be hiked to the market level in a single stage? Or should they be hiked incrementally in several stages? That may be a matter of opinion. In any event, the situation is a mess. This was not because the Ma administration arrived at a decision and stuck to it. This was because the Ma administration flip-flopped repeatedly. The Ma administration's confusion and chaos was, in a word, "frightening."
Who in the world adopts such an absurd decision-making process? The electricity rate hike controversy raged for months. Three weeks ago the Ma administration decided to increase electricity rates to their true market level in a single stage, on May 15. The new rates were announced, while electricity rates remained unchanged. Prices on everything else meanwhile, climbed. Controversy raged. The countdown to May 15 began. The public was psychologically prepared for the single stage rate hike. But suddenly word emerged from the central government. Someone on the "five man committee" changed his mind. The next day the president held a press conference and announced a three-stage rate hike.
As mentioned in yesterday's "In Black and White" editorial column, the Ma administration originally announced a May 15 "single stage rate hike." But a multi-stage rate hike was already under consideraton. When the Ma administration adopted the single stage rate hike, it held forth on carbon reduction, It urged businesses to enhance competitiveness. It adopted user fees. It eschewed tax subsidies. It insisted Taipower would go belly up. It advanced all sorts of high-minded justifications for what it was doing. It presented a clear and logical case. President Ma even said he "had his helmet ready." He appeared determined to bite the bullet and not drag things out.
In times like these, the public is in pain and society is in chaos. But leaders with vision know that even three feet of ice will melt, sooner if not later. Since those in office have the courage and determination to slice through the Gordian Knot, the ruling and opposition parties should ride out the storm together. The Ma administration offered all sorts of justifications for the "single stage rate hike." His words were still ringing in our ears. But as expected, he did a complete about face. He suddenly introduced a "multi-stage rate hike." President Ma changed his tune. He said he was "absolutely concerned about public opinion trends." He said he was "not arrogant in the face of the public." But what was he doing, other than spitting in his own face? What was he doing, other than confessing that the day before his own administration was supremely arrogant in the face of the public?
This 180 degree about face intensified an already divisive rate hike controversy. It deepened both government and private sector divisiveness, Even members of the government's "five man team" held differing views on the issue. Eventually even hard-core supporters of the government's "courage amidst adversity" felt like fools. This sort of decision-making can only lose friends and alienate people.
The Ma administration has always tried to please everyone, only to wind up pleasing no one. This has been the Ma administration's chronic ailment. Last year's subsidies for elderly farmers was a good example. The Ma administration initially claimed it would only increase official rates 316 NT. It referred to it as "systematization." Soon however, they removed their helmets and placed them on the ground. They changed their tune, saying they would increase rates 1000 NT. During this period it repeatedly flip-flopped. Elderly farmers felt the subsides were well deserved. As a result those who championed making them part of the system, felt as if the Ma Ying-jeou administration had slapped them in the face. The government failed to persuade its opponents. It failed to respond to its supporters. How could it not lose friends? How could it not alienate people?
Electricity rates will be hiked in three stages. Will the first two stages touch off a public firestorm? That remains to be seen. The so-called "third stage" is merely a euphemism for "reducing the rate hike 20%." Taipower estimates it will suffer a 70 billion NT loss as a result of the new rate hike scheme. It will continue receiving tax subsidies. We want to ask President Ma a question. Were you "arrogant" before, when you adopted the single stage rate hike? Or are you "afraid of accusations of arrogance" now while you are adopting the multi-stage rate hike? You sat and watched as uncompetitive industries made profits on the backs of taxpayers. They made profits not on merit, but on electricity subsidies. Is this what the self-proclaimed "reformist" Ma administration wants?
Step back for a moment. Assume this is what the Ma administration wants. One may champion a gradual rate hike, a multi-stage rate hike, or even a rate freeze. One need merely delay the final reckoning to 2016. If one can do that, one can determine in advance whether to reduce the rate hikes, or impose multi-stage rate hikes. One need hardly do what is being done now. One need hardly turn decision-making into a social cost borne by the public. The public need not suffer the consequences of the policy makers' internal dissension and policy flip-flops. All the flip-flopping could make heroes out of Vincent Siew and Wang Jin-pyng. But it would also make a zero out of Ma Ying-jeou. Is there no way to avoid making the administration look bad?
The controversy over rate hikes left the impression that "Ma Ying-jeou wants rate hikes." Ma Ying-jeou brought this upon himself. He acted as if he could prevent electricity rates from rising. But electricity is not a free lunch. One either hikes rates, or provides tax subsidizes. If Ma Ying-jeou insists on going down the wrong path, he might as well provide subsidies. Why make such a fuss, only to lose friends and alienate people?
2012.05.03 01:53 am