What Does the Free Trade Demonstration Zone Demonstrate?

What Does the Free Trade Demonstration Zone Demonstrate?
China Times editorial (Taipei, Taiwan, ROC)
A Translation
March 29, 2013

Summary: The government has a program. It may not be perfect. We hope the government will take a hard look at it, perform a total reassessment of it, and make the appropriate changes. It must avoid haste. Nearly as importantly, it must be serious. It must carry it out. It must stop promising a pie in the sky. It must stop leaving the public and the business community disappointed and disillusioned.

Full text below:

One of the key traits of the government of the Republic of China, is that once high-ranking officials issue a statement, once they sing a certain tune, it is extremely difficult to get them to budge from their original position. Even if outsiders repeatedly challenge them, their policies seldom change. For example, the Executive Yuan's reorganization charges ahead full steam. But due to electoral concerns, high-ranking officials in the Presidential Office and the Executive Yuan dare not lay a finger on the Council for Indigenous Peoples, the Council for Hakka Affairs, or the Veterans Affairs Commission. This discredits its reorganization effort from the outset. The shuffling and reshuffling of these agencies leads to chaos. But the promoters of reorganization lack core convictions. During party-government deliberations, the Organic Laws for many of these ministries and commissions have been altered beyond recognition. The absurdity of the process is increasingly apparent. This newspaper has been critical of the chaos created by the government's reorganization efforts. We now feel compelled to point out the blind spots in the upcoming "Free Trade Demonstration Zones."

The first Free Trade Demonstration Zone was conceived by President Ma, as part of his "Golden Decade National Vision" campaign platform. That platform proposed a "vision." It lacked any real content. People did not pay much attention to the press releases. But now that it is being promoted, a giant "President Ma promise" label has been slapped on it. A vision has suddenly became a straitjacket. Never mind that it smacks of being jury-rigged. It is being promoted aggressively, as something that simply must be done. This is all highly regrettable.

The CEPD's Free Trade Demonstration Zone project includes smart logistics, international medical treatment, valued-added agriculture, and industrial cooperation, in four demonstration projects. According to reports, during Chairman Yin Chi-ming's term, the plan was more complex, and included over 100 pages. The new cabinet has deleted much of it. Our first question is, was President Ma's vision really so golden? Why was the vision so lacking in guiding concepts. Why could its contents be so cavalierly changed? Did former Chairman Yin of the Council for Economic Planning have major problems with his plan? Why did the problems suddenly vanish under Chairman Kuan a little more than a month later?

Look closely at the content of the aforementioned demonstration zone program. It is riddled with problems. International medical treatment is one. Originally the planning for the Ministry of Transportation Taoyuan Aerotropolis included international medical treatment. But was it successfully included? Was it successfully promoted? Was the demonstration zone still the Aerotropolis? Was the first stage medical regulations and hospital organization the same? Were the services provided, i.e., health checks, cosmetic surgery, and major illnesses, the same? If the external conditions were the same, why weren't the Department of Health and the Department of Transportation able to promote it two years ago? Why is the CEPD suddenly able to promote it now?

Consider measures to promote the Free Trade Demonstration Zone program. It was not made available to outsiders. The land was cheap. Tax breaks were provided. Two and a half years ago Wu Den-yih was premier. In one fell swoop the tax rate was reduced from 25% to 17%. Tax rates were dramatically cut. The government wanted a single rate for everyone. It did not want special tax cuts for operational headquarters, special investments, and special purposes.

But two-and-a-half years later, the Free Trade Demonstration Zone has reappeared. All sorts of tax cuts and tax exemptions have been concocted. All of them violate commitments made by former Premier Wu. All of them defy Ministry of Finance recommendations. All of them ignore the fact that the government can no longer afford tax cuts. Worse still, the tax cuts obviously benefit the rich. They will intensify class antagonisms. Are they really appropriate? They need closer consideration.

Finally, we must clarify the matter of cabinet policy continuity. When Sean Chen was premier, his economic policy stressed "Programs to Increase Economic Momentum." He stressed the importance of improving corporate economic health. Premier Chen argued against pursuing short-term prosperity. He promoted medium and long-term reform. The main promoter of his economic and political policies was today's CEPD Chairman. After Premier Jiang took office, the promotion of medium and long-term economic momentum was rarely mentioned. The Free Trade Demonstration Zone currently promoted is touted for the tens of billions it will bring in within a year or two. The cabinet reshuffle is less than a month old. Yet suddenly, medium and long term initiatives have become short-term. When major economic policy is so unpredictable, on top of the aforementioned problems, it is difficult for the public to retain confidence in the government.

Taiwan's economy and industry face many problems. The government and the private sector are seeking breakthroughs and transformation. The government has set forth its Free Trade Demonstration Zone program. The program is a response to Taiwan's economic difficulties. The government is doing something. That is better than doing nothing. But its solutions should be solutions to actual problems. We think the deregulation of capital, of investments, and of manpower are acceptable. We think there should be even more of them. But are tax incentives appropriate? We have serious reservations.

The government has a program. It may not be perfect. We hope the government will take a hard look at it, perform a total reassessment of it, and make the appropriate changes. It must avoid haste. Nearly as importantly, it must be serious. It must carry it out. It must stop promising a pie in the sky. It must stop leaving the public and the business community disappointed and disillusioned.
   
中時電子報 新聞
中國時報 　2013.03.29
社論－自由經濟示範區 示範了什麼？
本報訊

    　中華民國政府的特性之一，就是一旦高層講了什麼話、定了什麼調，就萬難翻轉；就算外界不斷提出質疑，都難以撼動政策。舉例來說，行政院組織改造說推就推了，但府院高層為了選票不敢碰原民會、客委會、退輔會，使得組改一開始就欠缺具有說服力的理念訴求，也使得二級機關之間併來併去、章法紊亂。也因為組改推動者缺乏核心理念，許多部會的組織法就在審議過程中被黨政協商修得面目全非，愈推到後來其荒謬性就愈發明顯。本報過去已對組改亂象多所批評，現在又不得不對即將上路的「自由經濟示範區」案點出問題盲點。

    　最早的自由經濟示範區構想出自馬總統「黃金十年國家願景」的競選企畫。那份文件其實是提出個「願景」，還未有實質規畫內容。在新聞發布時大家沒太注意，但是到了要推動時，卻是端出「馬總統宣示」的大帽子，願景描繪突然間就成了行政機關的緊箍咒，儘管拼湊堆砌的味道十足，竟也成了力道萬鈞、勢在必行，令人感慨。

    　這一次經建會所提的自由經濟示範區專案，內含智慧運籌、國際醫療、農產加值、產業合作四項優先示範項目。據報載，原先尹啟銘主委任內規畫的內容更為龐雜，洋洋灑灑百餘頁，但在新內閣上任後卻大幅刪修。我們的第一個問題是，如果當初馬總統的願景真如黃金一般美好，為什麼內容卻能夠如此任意變化而欠缺主軸？假如尹前主委時的經建會規畫大有問題，又為何能在管主委上任一個多月後，所有問題就煙消雲散？

    　細看前述優先示範內容，其中問題亦不少。以國際醫療為例，原本交通部桃園航空城規畫案就已將國際醫療涵括其中，但後來成功了沒有呢？若是當初沒有推成功，如今示範的地區未變（依舊是航空港區）、第一階段醫療法規與醫院組織也不改變、服務項目（健檢、醫美、重症）一字未改、外在環境全無差異，為什麼兩年前衛生署與交通部推不動的案子，現在換到經建會就能推動了？

    　再就示範區推動措施來看，也不外人員開放、土地便宜、租稅減免等舊酒。台灣在兩年半前由吳敦義做行政院長時，一舉將營所稅率由二五％降為一七％。當時如此大幅降稅的背景，就是要降到一體適用所有情境，不要再在營運總部、特殊投資來源、特殊功能支出等方面另開降稅之例外。

    　但是兩年半後的今天，自由經濟示範區竟然又舊事重提，弄出諸多降稅免稅的名堂，既違反吳前院長的承諾，又不顧財政部的反對，更無視台灣已無降稅空間之事實。更可議的是，這些降稅減稅的名堂明顯對富人有利，也會惡化台灣社會的階級對立，如此是否合宜，實在應該再多加深入考量。

    　最後，我們也要釐清內閣政策延續的問題。在陳?院長任內，其經濟政策的重頭戲是「經濟動能推升方案」，強調改善企業經濟體質的重要性。當時，陳院長說不要追逐短期利多，而要推一些中長期的改革措施；其政策的主推手經濟政委，也就是今天的經建會主委。在江院長接任之後，中長期的經濟動能推升方案就少見提示，而目前所推的自由貿易區案，強調的卻是要在一兩年之內看到幾百億的產值。內閣改組月餘，忽然就從全力拚中長期改變體質變成衝刺短期績效，重大經濟政策如此變幻莫測的情況，再加上前述一連串的質疑，實在是令人民難有信心。

    　台灣的經濟與產業的確面臨不少問題，政府與民間都在尋找突破與轉型的契機，這次政府端出自由經濟示範區，就是對解決台灣經濟困境的回應與藥方。坦白說，政府願意作點事，總比一籌莫展的好，但拿出的藥方，也該更能符合實際的需求。對於方案中的資金、投資、人員進出的鬆綁，我們認為是可以接受的，甚至可以說，應該作得更多；但再祭出租稅優惠，是否合宜，我們還是不得不強烈懷疑。

    　不過，既然有了方案─縱然是一個有問題、不完美的計畫，我們仍希望政府能再深入審視、完整評估、適切調整，切莫貪功求快；接下去更重要的，當然就是確實推動、落實執行，別再畫一個虛無的大餅，讓民眾與企業界的殷切期待又落空。