Economic Revitalization Requires Both Liberalization and Net Mending

Economic Revitalization Requires Both Liberalization and Net Mending
United Daily News editorial (Taipei, Taiwan, Republic of China)
A Translation
January 3, 2014

Summary: The Ma administration's open-door policy can not be divorced from reality. The government must come up with policies to solve urgent issues affecting peoples livelihood. It must encourage investments to enhance industrial competitiveness. It must eliminate internal and external political resistance. Only then can the economy survive. We hope the Ma administration will take these to heart and make the proper policy adjustments.

Full text below:

On New Year's day, President Ma Ying-jeou called for "national unity for the sake of economic revitalization." He said that this year the government would focus on one thing, "national unity for the sake of economic revitalization." The domestic economy has remained stalled for years. People have less and less faith in the government. President Ma's remarks were his response to public expectations. For years, people have watched as the government struggled to revive the economy. Besides promoting new policies and mending nets, the government must also rekindle hope.

Ma has been in office for nearly six years. His most important policy has been to liberalize the economy. He hoped to revive Taiwan's economy. by breaking the stranglehold the DPP's eight year long closed door policy had on the island. This policy change, especially the breakthrough in the cross-strait status quo, brought Taiwan a multitude of opportunities for economic growth. It also brought unprecedented challenges. Confronted with this new situation, Taiwan needs a stable internal and external environment. It needs visionaries who are able to implement their visions.

Unfortunately the global economy underwent a huge change in recent years. The liberalization of cross-Strait policy has been hampered by Blue vs. Green ideological conflict. Also, the government's policies had structural defects. These undermined the government's ability to respond to changes and to shape its vision. As a result Taiwan was brought to the brink of economic crisis.

We realize that President Ma and his cabinet feel frustrated and unappreciated. But effective economic governance requires confronting illnesses and prescribing remedies. The Ma administration has consistently adhered to liberalization. Now it must also mend nets in order to regain public confidence, overcome difficulties, and reverse its image of ineptitude.

Taiwan is dependent upon trade. It must remain open to the outside world. Only then will it survive. The Trans-Pacific Economic Partnership Agreement (TPP) and Regional Comprehensive Economic Partnership Agreement (RCEP) represent rapid regional integration. Taiwan must adhere to an open-door policy. It must actively participate in regional integration. This is a path it must take. Naturally the Ma administration has made these the focus of its policy. But full liberalization requires more than slogans. One must also confront economic and political realities.

Consider economic reality. A major problem is declining industrial competitiveness. Taiwan's chief export industry is the information and communications industry. This industry is under attack from US, South Korean, and Mainland multinationals. A crisis looms. The petrochemical industry also faces unprecedented challenges from large scale U.S. shale gas exploitation, Domestic industries, including educational services and medical services, are in crisis. The cultural and creative industries are hemorraging talent. Agriculture is in sharp decline. Imports of foreign agricultural products have made food self-sufficiency increasingly infeasible. We face a variety of practical problems. If we emphasize only open markets, that merely deepens industry concerns.

The fact is industry requires long-term competitiveness and continuous investment. It requires research and innovation. The government has a responsibility to create a favorable investment environment and provide incentives. It must shape economic development. In particular, it must offer a cross-Strait economic vision. It must help companies that are willing and eager to invest in Taiwan. President Ma's New Year's Day speech mentioned the Taoyuan Free Trade Zone. He cited it as the key to public investments, expanding cultural and creative financing, venture capital angel funds, and large-scale urban renewal. For the most part, he was plowing old ground. The size and shape of the "Free Trade Zone Pilot Programs" are limited. They are not enough to enhance industrial competitiveness, to enable us to join the TPP, or prepare us for the RCEP. The government must actively and effectively plan for the future and encourage investments. 

Also, liberalization alone cannot solve the problem of unemployment. Living wages and misery index increases are matters of peoples livelihood. The government must win peoples hearts as well as their minds. They must answer the question "Where's the beef?" Only then will the people be willing to support liberalization.

Consider political reality. Cross-Strait factors are obstacles to TPP, RCEP, and other forms of regional economic integration. They are also obstacles to the signing of FTAs. Taiwan will find it difficult to join the US led TPP ahead of the Mainland. The RCEP, led by ASEAN and the Chinese mainland, has announced that other countries will not be able to take part in negotiations before 2015. Before the cross-Strait trade in services agreement and commodity trade agreements are implemented, Taiwan and other economies will find it difficult to negotiate and sign FTAs.

Therefore the government must improve communications with social groups and the private sector. It must eliminate internal resistance to the trade in services agreement. It must aggressively negotiate with the Mainland. It must include priority issues into dialogue and negotiations over cross-Strait issues. Taiwan cannot participate in the TPP and RCEP in the short term. Participation is at the discretion of the United States, Japan, and Mainland China. This strengthens Beijing's hand during negotiations.

In short, the open-door policy can not be divorced from reality. The government must come up with policies to solve urgent issues affecting peoples livelihood. It must encourage investments to enhance industrial competitiveness. It must eliminate internal and external political resistance. Only then can the economy survive. We hope the Ma administration will take these to heart and make the proper policy adjustments.

拚經濟的活路：開放與補破網要雙管齊下
【聯合報╱社論】
2014.01.03 04:04 am

馬英九總統以「全民團結拚經濟」為題發表元旦祝詞，宣示今年只有一個重點，就是全民拚經濟。國內經濟連年低迷不振，民間對政府信心日益不足，馬總統以此宣示回應人民的期待；然而，政府連年拚經濟不力的形象已深植人心，在推動新政同時，如何補破網、重振民心也是重要課題。

馬政府執政將近六年，以「開放」作為經濟施政主軸，期待打破民進黨執政八年的「鎖國」政策，為台灣經濟引進活水。此一政策改變，尤其在兩岸現狀的突破，為台灣經濟發展帶來可觀機會，同時也帶來空前挑戰。面對此一新局，台灣不但需要一個穩定的內外大環境，更需要執政者有塑造願景的規劃和執行能力。

遺憾的是，近幾年來適逢國際經濟巨大變局，又因為兩岸開放政策加劇朝野及藍綠對立，再加上馬政府本身結構性的缺陷，嚴重弱化因應變局及開創願景的施政能力，以致讓整個台灣陷入經濟危機的邊緣。

我們可以理解馬總統及內閣團隊的挫折感和不服輸的志氣，但經濟施政的有效推動首須面對問題、對症下藥，現在馬政府最需要的是為一貫堅持的「開放」政策進行補破網工程，才能重拾民眾信心，突破困境，扭轉施政無能的形象。

台灣以貿易立國，對外愈是開放，才愈有出路。面對「跨太平洋經濟夥伴協定」（ＴＰＰ）、「區域全面經濟夥伴協定」（ＲＣＥＰ）等區域整合快速發展，台灣堅持開放政策，積極參與區域整合，是必須走的一條大道，馬政府將其列為施政重心乃理所當然。但是台灣走向全面開放之路，不能光靠口號，而須面對解決經濟和政治兩方面的現實。

在經濟現實方面，產業競爭力持續衰退是首要問題。台灣主力出口產業資通訊業在美、韓國際大廠及大陸業者兩路夾擊下，危機迫在眉睫；石化業因為美國頁岩氣大量開採，亦面臨前所未有的挑戰；內需產業包括教育服務業、醫療服務業等皆危機重重；文創產業人才大量流失，後繼乏力；農業因糧食自給率大幅下降及進口外國農產品競爭，永續經營日益困難。種種現實難題若不面對解決，只是一味強調市場開放，反容易加深業者及從業人員的憂慮。

事實上，產業長期競爭力須賴不斷的投資和研發創新來提升，政府有責任營造良好投資環境及提供誘因，並形塑未來經濟發展尤其是兩岸經貿的願景，讓企業願意也樂於投資台灣。馬總統元旦文告提出以桃園自由貿易港區為核心的公共投資、擴大文創融資及成立創業天使基金，以及大規模土地活化與都市更新，多屬老菜新炒；「自由經濟示範區」計畫的規模及格局亦屬有限；皆不足以承擔全面提升產業競爭力、為加入ＴＰＰ、ＲＣＥＰ作準備的重任，亟需政府更積極有力地為未來經濟布局，以促進全面性的投資。

再者，開放不能解決就業、薪資及人民生活痛苦指數升高等民生問題；所以，政府也須拿出可以讓人民心動、有感的政策牛肉，才能讓人民樂於支持開放。

在政治現實方面，兩岸因素是台灣參與ＴＰＰ、ＲＣＥＰ等區域經濟整合乃至對外洽簽ＦＴＡ的阻力。台灣很難先於大陸加入由美國主導的ＴＰＰ；由東協和中國大陸主導的ＲＣＥＰ已宣布在二○一五年前不開放其他國家參與談判。在兩岸服務貿易協議及貨品貿易協議落實執行前，台灣很難進一步開展和其他國家洽簽ＦＴＡ。

因此，政府除須和社會及民意部門加強溝通及協調，全力排除服貿協議乃至貨貿協議在國內的阻力外，也須積極和大陸斡旋，將相關議題納入兩岸對話和協商的優先議題。同時，台灣也須有短期內無法參與ＴＰＰ、ＲＣＥＰ的因應備案，並審酌對美、日、大陸三方面的槓桿關係，強化和北京談判的能力。

總之，開放政策不能脫離現實，拿出政策牛肉解決迫切民生問題，全面促進投資提升產業競爭力，並以積極行動作排除開放的內外政治阻力，才是拚經濟的活路。盼馬政府能深切體認，並作出有力的政策調整。