Address Poverty Before Addressing Emergencies

Address Poverty Before Addressing Emergencies
China Times editorial (Taipei, Taiwan, ROC)
A Translation
August 20, 2012

Summary: We warn the business community and the public. We must liberalize. If we do not, we will commit economic suicide. We are currently in a recession. We cannot sit and wait for the dawn. We cannot hope that the economy will improve and that our problems will disappear. We must recognize the warning signs for Taiwan's competitiveness. Otherwise, when the global economy picks up again, others will be eating steak, and Taiwan will be eating table scraps.

Full Text below:

Last week the Executive Yuan Budget and Accounting Office issued its latest economic report. The economic growth rate this year has been revised downward to 1.66%. This figure is likely to put us in last place among the Four Asian Tigers. The Executive Yuan implemented emergency mobilization countermeasures long ago. We hope Taiwan can safely negotiate the economic downturn. We hope the government will forsake its outmode ways of thinking. An old expression says "one must address emergencies before addressing poverty." But the economic downturn suggests just the opposite. It suggests that the government should "address poverty before addressing emergencies."

This year's economic growth rate was set optimistically at over 4%. This quarter it has been downgraded to 1.66%. The main reason for this is the swiftly declining global economic environment. The European debt crisis persists. The EU economy has gone into recession. It economic growth rate this year is -0.3%. The U.S. market remains weak. Its economic growth rate has been revised downward to 2.1%. Even the Mainland's sustained double-digit growth has slowed. Its economic growth rate has fallen below 8%. Projections for this year have been lowered to a mere 7.7%. Economic growth for the rest of the Four Asian Tigers has been lowered to about 2%. Taiwan's exports accounted for 70% of its GDP. The international economy is slowing. Taiwan cannot remain unaffected.

Consider the economic data. Taiwan was originally first among the Four Asian Tigers. Today it is last. This is not due entirely to international factors. An important factor is Taiwan's declining competitiveness. Between January and July, Taiwan's exports shrank by 5.8%. This was the largest drop experienced by any of the Four Asian Tigers. The three other Asian Tigers are still experienceing positive growth. Exports of Taiwan's ICT products, so-called technology products, have abruptly fallen over 20%. One need not look at the data. One need only look at the domestic technology industry. Taiwan's DRAM industry has already been sidelined globally. Industries on their last gasp still don't know what to do. In flat panel displays we still retain our global market share. But our technology lags behind. Financial losses have occurred. How can we bounce back and keep fighting? The LED and solar energy panel industries are in trouble. The PC and smart phone industries have also hit bottom.

When the economy was booming, it made no difference whether we were competitive or not. Businesses still made money. But when the economy and market conditions deteriorate, the first to fall are the less competitive businesses. This is typical capitalist elimination of the unfit. Unfortunately during the current global recession Taiwan's economic and industrial competitiveness has clearly declined.

During the Asian financial crisis, a domestic financial crisis, or the financial tsunami, the economy declined. But now no matter how competitive a business might be, it can still fail. At times like these, all that a government can do is address the emergency. It tries to save every industry, sound or unsound, in order to avoid affecting the situation overall. This includes industries having difficulty adapting, or facing a loss of capital, or whose markets have contracted.

At least this downturn does not mean across the board austerity and recession. Its causes are clearly related to industry and business competitiveness. The government must not rush to rescue troubled businesses. It should not adopt emergency measures and rush to inject capital. Instead it should allow businesses without a future to fail. It should allow sunset industries to fade away. The government's focus should be on how to strengthen the constitution of the economy and industry as a whole.

The government has stressed policies that facilitate FTAs and economic and trade liberalization. President Ma said "History teaches us that liberalization brings hope, but that protectionism brings atrophy." We agree. But we must also warn the government. So-called "liberalization" is not the low level "liberalization of goods and trade" of 20 years ago. It is the comprehensive liberalization of laws, capital, skilled labor, and government regulations. The fact is, society has consistently resisted such liberalization. The government often says one thing while doing another. Take overt and covert restrictions on the importation of foreign and Mainland labor. Take controls over corporate equity transactions and the buying and selling of "official discretion." Take restrictions on domestic business investments on the Mainland -- the way they are approved or rejected. These policies and practices stand in the way of liberalization. They persist in many industries. The government must review these first. It must liberalize far more than it has. Taiwan's economy and industry must be subjected to greater market discipline.

We warn the business community and the public. The government may sign an infinite number of FTAs. But they are not a panacea that will ensure exports. They invariably involve other costs. We must liberalize. If we do not, we will commit economic suicide. Businesses and the public must accept the challenges. They must increase their own competitiveness. We are currently in a recession. We cannot sit and wait for the dawn. We cannot hope that the economy will improve and that our problems will disappear. We must recognize the warning signs for Taiwan's competitiveness. Otherwise, when the global economy picks up again, others will be eating steak, and Taiwan will be eating table scraps.

因應當前經濟情勢 救窮優於救急
    2012-08-20 01:03
    中國時報

　行政院主計總處上周公布最新經濟情勢，今年經濟成長率下修到一．六六％，此數字很可能在四小龍中敬陪末座；行政院也早已緊急動員，提出各項因應對策，希望讓台灣安度這次的景氣谷底。對這次的景氣低潮，期望政府能跳出過去的思維；雖然俗語是說「救急不救窮」，但對這次景氣低潮的成因，政府對策應該是「救窮優於救急」。

　今年的經濟成長率，由最初樂觀的四％以上，逐季下修到今天的一．六六％，其最大因素當然是國際經濟急凍的大環境因素。歐債危機不止，讓歐盟經濟陷入衰退，今年經濟成長率為負成長○．三％。美國市場持續疲弱，經濟成長下修為二．一％。甚至持續二位數高成長的大陸，也減速慢行，經濟成長率跌破八％，預估今年只有七．七％。其餘四小龍的經濟成長也正修到二％上下。台灣的出口占ＧＤＰ的七成，國際景氣走緩，台灣也不可能一枝獨秀。

　但如仔細看看各項經濟數據，台灣從原本期望的四小龍之首，變成今日的四小龍之尾，並不全然只有國際因素，台灣的競爭力下滑也是重要因素。台灣一到七月的出口衰退了五．八％，在四小龍中高居首位，其餘三小龍都還是正成長。其中台灣的資通訊產品─即一般所謂科技產品，更一口氣衰退了二成以上。即使不看數據，看看國內主要的科技產業，ＤＲＡＭ產業已在全球淘汰賽中出局，僅存一息的企業還不知如何善後；面板雖仍保有一定的全球市占率，但技術已落後，財務也虧損，如何再起仍在奮戰。ＬＥＤ與太陽能落入困境，ＰＣ與智慧型手機也陷入低潮。

　如果以一般商家作比喻，景氣強強滾時，本來就是不論競爭力好壞高低，企業大都能賺錢，但景氣下滑、市況變差，首先倒下去的一定是競爭力較差的企業。這是典型資本主義淘汰賽。遺憾的是這波全球不景氣中，看得出台灣經濟、產業的整體競爭力，的確遜人一籌。

　過去，在亞洲金融風暴、本土金融風暴或金融海嘯時，整體景氣急凍，這時不論競爭力好壞高低的企業，都有可能倒下。這種節骨眼，政府多半只能把全部心力放在救急上，對運轉有問題、面臨抽銀根、業務緊縮的企業，不分好壞的盡量拯救，以免牽一髮而動全身。

　但這次的不景氣，至少不是全面性的緊縮與低潮，且其成因已明顯與產業、企業的競爭力有關，這時，政府對陷入困境的企業，不該急著又是紓困、又是挹注資金的救急措施，反而該考慮放手讓已無希望的企業倒閉、讓窮途末路的產業淡出，政府該著重者是如何調整經濟與產業的體質。

　在各種總體政策中，政府不斷強調者是加速ＦＴＡ、強化經貿自由化；馬總統甚至說「自歷史經驗可知，開放帶來希望，閉鎖帶來萎縮」，我們非常同意這番話；但我們也要告訴政府，以台灣目前經貿的開放與自由化程度，所謂的「開放與自由化」，已不是廿年前的「貨品、貿易的開放與自由化」這麼「低階」的開放而已了，而是包括法令、資金、人才、政府管制等各方面的進一步開放。這方面，事實上社會一直有抗拒之心，政府也時常「說一套、作一套」。例如對外籍人才（包括大陸人士）來台的有形無形之限制；對企業股權交易、買賣的「自由心證式」的管制核准制；對國內企業赴大陸投資的限制審核，這些「反開放、反自由化」的行為與政策，事實上仍普遍存在各產業中，政府是該優先檢討這些領域，作更大幅度的開放，讓台灣經濟與產業接受更強的淬鍊。

　此外，我們也要告訴企業界與社會大眾，政府即使能成就再多的ＦＴＡ，這也絕對不是出口的萬靈丹，更是要付出其他代價；只是，不走這條路更是死路一條。民間企業與民眾，都要有接受挑戰、提升自己競爭力的決心與作為。如果這次不景氣，大家還存著「等待黎明」、景氣好了就沒問題，未體認到台灣的競爭力警訊，未來當全球景氣回升時，可能是別人吃牛排，台灣也只能吃肉屑！