Maintaining One Percent Growth: The Worst is Yet to Come

Maintaining One Percent Growth:
The Worst is Yet to Come
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
November 30, 2012

Summary: The year 2012 is coming to an end. We thought we could make a full recovery. But a series of "unforseen eventualities" scotched that. Even maintaining a 1% growth rate is no longer a certainty. But suppose we are successful in maintaining a 1% growth rate? The worst is yet to come. The government cannot afford to let down its guard.

Full Text below:

The year 2012 is coming to an end. We thought we could make a full recovery. But a series of "unforseen eventualities" scotched that. Even maintaining a 1% growth rate is no longer a certainty. But suppose we are successful in maintaining a 1% growth rate? The worst is yet to come. The government cannot afford to let down its guard.

Last week, the Directorate General of Budget, Accounting and Statistics (DGBAS) released its latest economic forecast. It revised its economic growth rate for the year slightly upward, to 1.13%. Barring unforseen eventualities, we should be able to achieve a 1% growth rate. The embarrassing string of nine downward growth rate revisions should end here. More importantly, the DGBAS forecast for next year's economic growth rate may be raised to 3.15%. The main reason is a palpable economic recovery in the US and Mainland China. This and the rapid introduction of new technology products may increase Taiwan's exports and lead to renewed investments. Perhaps the worst is over. But such a conclusion does not explain the struggle to survive that domestic industries are undergoing today. The glowing DGBAS forecasts for this year are far from persuasive.

Consider the unemployment rate. We thought seasonal unemployment for new job seekers had peaked. The October unemployment rate was supposed to drop back down. Instead it went even higher. The magnitude was not large. But it was still an aberration. Workplace business contractions or closures led to drastic increases in unemployment for four straight months. The layoffs at ProMOS Technologies and other companies are cold, hard numbers. They constitute a warning signal. None of these are isolated events. The economy is deteriorating. The end of the year is looming. We hoped to stall for time, but time has run out. More and more companies are being forced to lay off their workforce. Will the unemployment rate increase even more before the year is out? That remains to be seen.

Consider economic growth. The unemployment rate is considered a trailing economic indicator. When the economy bottoms out and begins its recovery, cyclical unemployment improves, but two, three, or even more months later. We are now approaching the new year. Businesses weed out the unfit. Even those who are employed are seeking better jobs. Therefore they are entering and exiting the labor market at a rapid rate. This leads to frictional unemployment. Also, the Executive Yuan's four year employment promotion programs will expire at the end of this year. Many wage subsidies promoting employment will be canceled. Not all impacted jobs will be eliminated. But some will. Therefore unemployment will increase. Unemployment policy is a top priority for any government. Unemployment impacts more than income level and consumption. It undermines social harmony and social stability. Needless to say, the worst is yet to come.

DBGAS officials have belatedly begun describing Taiwan's sluggish and stalled economic growth as "anemic growth." The attempt to maintain a 1% growth rate is merely a pro forma ritual. Substantively it will not offset the inflation rate. Still less will it promote employment, increase consumption, or prosperity. We may be surviving. But we are not thriving. At any time an unforseen eventuality could throw us into recession. World Bank president Robert Zoellick spoke of "anemic growth." He stressed that the course of the world economic recovery would be very slow. That means a solid recovery for Taiwan will take time. Taiwan itself must be strong. It must also confront changes in the international situation.

Making ourselves strong is within our control. The economic momentum upgrade program, Taiwan business reinvestment in Taiwan program, and upcoming free trade zone pilot program, all have merit. But the government must not have only plans and programs. For one, personnel changes mean a lack of follow through. For another, being trapped in one's own framework means a lack of flexibility. The end result could be empty talk. Every year people on Taiwan shout slogans about "growing the economy." But in the end all we have to show for it is anemic growth.

Consider changes in the international situation. This is an even greater challenge. It is also the main reason the DBGAS repeatedly missed its economic forecasts for this year. At the end of last year, the international community was most concerned about the European debt crisis, specifically the debt service peak at the beginning of the year. They thought the global economy might be able to squeak by in 2002. The European debt crisis subsided because everyone anticipated it. But the most promising emerging Asian countries slowed sharply. The benefits from ruling administration changes in economic giants such as the U.S. and Mainland China failed to appear. The anticipated global recovery did not take place. The economic growth rate was adjusted downward, repeatedly. Similar changes may occur in 2013. The visible risks are the U.S. fiscal cliff and the severe debt crisis. But what about the invisible risks? Governments say the worst is over. They are attempting to calm the public. But they must not let their guard down.

慘烈「保一」：最壞時刻還沒過去
【聯合報╱社論】
2012.11.30

二○一二年進入尾聲，原本充滿復甦契機的一年，卻因一連串的「意外」而走調，經濟成長率連「保一」都竟成了岌岌可危的最卑微渴求。然而，即使成功「保一」，最壞時刻仍然沒有完全過去，政府絲毫不能鬆懈。

主計總處上周發布最新經濟預測，將今年全年經濟成長率微幅上修到百分之一‧一三，如無重大意外，應可保住「一」字頭，難堪的連續下修「九降風」或將就此止步；更重要的是，主計總處預測明年經濟成長率可拉高到百分之三‧一五，主因是近期美國、中國大陸的景氣復甦能見度提高，加上科技新品的上市腳步加速，可望帶動台灣出口、投資回溫，因而也由此做出「最壞的時候已經過去了」的結論。然而，此言不只偏離現今國內百業慘淡經營的景況，再對照主計總處今年不太光彩的預測紀錄，實在不具說服力。

就以失業率而言，原以為已安度社會新鮮人大量求職的季節性失業高峰，理應回降的十月失業率卻反向走高，幅度雖不大，卻已脫離常軌；究其原因，則是因為工作場所業務緊縮或歇業而導致的失業人數大增，而且是連四個月上升，顯示如茂德科技等大量解僱事件正化為冷酷的數字向社會示警：這些均不是單一事件；隨著景氣惡化及年關迫近，原想以拖待變但撐不下去、終被迫裁員的企業可能愈來愈多，失業率能否安度這個年關，仍是未知數。

從經濟活動的發展順序而言，失業率被視為落後景氣表現的指標，也就是說，景氣即使已觸底回升，這種循環性失業想要好轉，也是二、三個月以後、甚至更久的事；如今又到了年度交替之際，不只企業汰弱留強，受僱者也重覓良木，故而勞動市場進入、退出頻繁，摩擦性失業也將出現；再者，行政院推動四年的「促進就業方案」將於今年底到期，多項為促進就業而提供的工資補貼即將取消，與其關聯的工作就算不會全部撤減，也可能部分消除，如此一來，失業情勢不免會更加險峻。失業問題對任何政府而言都是最優先的政策課題，其衝擊的不只是經濟層面的所得與消費，更會傷害社會和諧與安定。準此而言，最壞時刻當然還沒過去。

尤其，主計總處官員最近才以「貧血式成長」，形容台灣經濟成長遲滯、動能不足的現象，「保一」只是形式上保住了成長局面，實質上抵銷不了物價上漲率，更不足以促進就業、增加消費及安居樂業，雖然續了命，但活得並不好，隨時可能因一個意外事件的突擊而陷入衰退。此外，語出世界銀行總裁佐立克的「貧血式成長」，原是要強調世界經濟復甦的歷程將十分緩慢，代表台灣經濟想要迎接堅實的復甦，將是一場長期戰，既須強健自身體質，也須應戰國際變局。

其中，強健自身體質的努力，可操之在己，目前擬就的經濟動能推升方案、吸引台商回台投資方案，以及即將公布的自由經濟示範區計畫等，都有可觀之處；但政府施政最怕只有計畫及方案，一來人事更迭、後繼無力，二來自陷框架、缺乏彈性，最終留下的仍是空談泛議；也正因如此，台灣才會年年高喊拚經濟，卻喊到陷入貧血式成長的不堪境地。

至於國際變局，則是更大的挑戰，也是主計總處今年經濟預測步步失算的主因。去年底時，國際間最擔心的經濟風險是歐債危機在年初進入償債高峰，咸認二○一二年全球經濟是「頭過身就過」；孰料，歐債危機的威脅因各方提早準備而消退，最被看好的亞洲新興國家卻大幅減速，預期中的美國復甦也推遲，加以美中兩大經濟體的政治換屆利多未現等，非但期待中的全球復甦未現蹤，經濟成長率更一再下調。類似但不同的變局也可能發生在二○一三年，看得到的風險是美國財政懸崖及纏綿病榻的歐債危機，但看不到的呢？政府此時說最壞時機已過，固是為了穩定民心，卻萬不可鬆了戒心。