Friday, July 23, 2010

Forced to Flee: Hon Hai or Dolphins?

Forced to Flee: Hon Hai or Dolphins?United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
July 23, 2010

Hon Hai Group Chairman Terry Gou has recently been subjected to relentless of criticism. Guo asked, "Is there really no place for me on Taiwan? Will I really be driven out?" Meanwhile, an environmental impact report has paralyzed the Kuo Kuang Petrochemical Company. One reason is that its facilities may obstruct the migratory route for white dolphins. Environmentalists oppose driving the white dolphins out.

But just who is being driven out of Taiwan? Is it Hon Hai? Or is it white dolphins? Does a majority on Taiwan really favor these two extremes? Can we not find a balance between realism and idealism? Whether the issue is labor rights or ecological and environmental claims, can we not eschew anti-business demagoguery and political sloganeering?

Some capitalists are indeed despicable. The Wall Street fat cats responsible for the financial tsunami swallowed up the life savings of countless ordinary folk the world over. But other entrepreneurs are decent people who create employment opportunities and promote social progress. Often a nation's economic pulse and competitiveness depends on just such a handful of key industrialists.

The Republic of China remains in dire political and economic straits. If we wish to become a "free trade island," and establish an "Asian Pacific Platform," we must attract businesses and raise capital. We must "build nests to entice the phoenix." We must attract Taiwan capital, Mainland capital, and foreign capital. We must "join the world." But even more importantly, we must "keep our roots on Taiwan." Therefore, maintaining a certain amount of manufacturing capacity on the island is essential. Because only manufacturing industries can retain unique technical advantages. Only the manufacturing sector can increase employment opportunities.

But soliciting businesses to set up factories, especially within the manufacturing industry, inevitably leads to conflict over labor rights, rivalries between regions, and concerns over environmental protection. When Taiwan was still known as "Formosa," the entire island was a natural deer park. Now the only place one can see a deer is on a nature preserve. As long as human beings continue to inhabit the earth, this competition between development and conservation will not end. That is why we face a dilemma over white dolphins today.

The social cost of attracting business and capital must be proportionate. But the Republic of China's central policy is to attract global investment. If every major investment is subjected to such an unrealistic selection process, how much room will remain for economic development? When some people wanted to establish a biotech park, a prominent author characterized the site as "Taiwan's lungs." When some people wanted to construct a petrochemical plant, ecologists said "Don't drive out the dolphins!" When some people wanted to construct an enclosure around a Technology Park, 24 farming families vowed to "til their fields to their last breath." How one views such controversies of course, depends on one's perspective. Both sides claim to be on the side of the angels. Take the Tai Po land incident for example. Ninety-eight percent of the farmers favored selling the land. But a mere two percent who opposed selling the land dictated the outcome. We are reluctant to comment on the merits of each sides' arguments. But we cannot help wondering, should our economic policy really be dicated by this "98:2" standard?

Now let us return to Terry Gou. Guo built factories on both sides of the Strait. At the very least, he fully complied with the law. Working conditions exceeded both legal requirements and standards set by other manufacturers. The main cause for the plant controversy was political and social factors unique to the Chinese Mainland. Arguably Gou could have done better. After all, he eventually offered raises. But to label him "Taiwan's Shame" is unjust. It is unseemly for university professors to engage in such name-calling. Mainland factories belonging to Japanese companies have also experienced labor strikes. Should the management of these companies be indiscriminately labeled "Japan's Shame?" Terry Gou is an entrepreneur struggling to survive within a labor chain controlled by the West. The income from his OEM work represents merely 2% of the upstream income. Both sides of the Strait ought to be ashamed about this 2% OEM number. But who if anyone deserves to be denounced as "Taiwan's Shame?" Just who are the university professors who slapped this label on Terry Guo?

The public fears entrepreneurs even as it invests its hopes on them. The choice between Hon Hai and white dolphins underscores the relationship between corporate responsibility and public expectations. Certain entrepreneurs are publicly reviled, including those who colluded with the Chen Shui-bian regime during its "Second Round of Fiscal Reforms." Such crony capitalists deserve to be reviled. But legitimate businesses that promote economic development and benefit the community deserve public support and encouragement.

How can Taiwan's economy be brought back to life? In the end it all boils down to persuading businesses to invest, thereby transforming Taiwan into an island of free trade. Assuming this view is correct, assuming this is the way out for Taiwan, we must be fair to entrepreneurs. Entrepreneurs confront global challenges. We can urge them to be sociallly responsible regarind labor rights and environmental protection. But we cannot expect them to live with "98:2" standards. We must not demonize them as "Taiwan's Shame."

Does anyone remember how DuPont and Bayer were driven off Taiwan? Then Chen Shui-bian era presidential economic adviser Vincent Siew pronounced it the "death knell" for foreign investment on Taiwan. Now, over a decade later, we are again "soliciting business." But will naysayers amounting to 2% of the public drown out the yeasayers who constitute the other 98%?

Lukang did not want DuPont. So DuPont went to the Mainland. Ilan did not want the Number Six Naptha Cracking Plant. So the Number Six Naphtha Cracking Plant went to Yunlin. These are all choices we make. Hon Hai and white dolphins represent two sets of values. For four centuries we have been choosing between the two. In the centuries to come, we too will have to make similar choices.

2010.07.23 02:39 am












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