Economic Revitalization: The Old Tricks are Outdated

Economic Revitalization: The Old Tricks are Outdated
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 26, 2013

Summary: Liberalization and internationalization is a  three decades-old policy. This old policy has fulfilled its interim goal. Its mission has been accomplished. This old trick is no longer useful. Taiwan's economy should be booming, like that of Silicon Valley's. It should be nearly immune to downturns in the global economy. The old tricks are outdated. That is why were are in today's fix. The public feels stifled. Officials issue laments. With this in mind, what should the focus of future policy be? Our general direction should be abundantly clear.

Full Text below:

Recently Premier Chiang attended a breakfast meeting with industry and business leaders. He used the word "stifling" to characterize Taiwan's economic climate in recent years. Reactions to his remarks varied. On the one hand, the term "stifling" truly does sum up the current economic stagnation. On the other hand, hearing Premier utter these words of despair, made many feel even more helpless.

Between 2000 and 2008, Taiwan's economy was shackled by the Chen regime's Sinophobic "closed door" policy. For eight long years, economic growth stagnated, for no good reason. The industrial structure underwent no evolution. After much suffering, the ROC finally experienced a ruling party change in 2008. But five years after Ma took office, a sluggish global economy or inept government policies have left the situation unchanged. People may not understand their current predicament. But the Executive Yuan must assume responsibility. It must provide the public with a clear explanation. It must tell us how we got here, and how we should get out.

Last week Premier Chiang noted that the Executive Yuan sees a free economy and an innovation economy as the twin-tracks that will enable Taiwan to undergo economic transformation. On Taiwan, "innovation economy" is probably a new term. Two years ago Executive Yuan Science and Technology Advisor Dr. Curtis R. Carlson spoke on Taiwan. Carlson urged the Ma administration to quickly transition from an "efficient economy" to an "innovation economy." But two years have gone by. Most of the ministries charged with fiscal and economic policy have failed to change their ways. They continue to promote the old policies. The innovation economy probably strikes them as too strange. By contrast, they are accustomed to the rhetoric of economic liberalization and internationalization. They are unable to wrap their heads around the new concepts.

Thirty years ago, when Chiang Ching-kuo was president, the policy was "liberalization, internationalization, and institutionalization." It was promoted by then Premier Yu Kuo-hwa. Back then Taiwan was gradually establishing its own industrial base. It wanted to liberate itself from bondage to tariff protection, trade barriers, and exchange controls. In Britain, Conservative Party leader Margaret Thatcher had come to power. She promoted large-scale privatization of state-owned enterprises. In the United States, President Reagan echoed her sentiments. He vigorously promoted tax cuts and deregulation. In academia, the Chicago School was ascendant. These voices championing the free economy resounded not only domestically, but also abroad. The advocacy of free trade crossed international borders. Under just such pressure Taiwan began its policy of liberalization and internationalization. As Mr. Wang Chuo-jung sniffed, liberalization and internationalization are not really that wonderful. They are merely normal responses to pressure from Uncle Sam and other nations.

Economic liberalization and internationalization forced Taiwan to face real international challenges. It could no longer remain complacent. It could no longer rely on government subsidies to survive. This increased our economic competitiveness. But as Taiwan gradually moved towards economic openness, the economic environment underwent a major change. Competition between efficient economies gradually morphed into competition between innovation economies. Examples of this abound. They include Silicon Valley, Israel, Switzerland, and other success stories. Silicon Valley, Israel, Switzerland sorely lack natural resources. Their only strength is their large pools of human talent. The innovation economy does not depend on reductions in tax rates, land costs, and labor costs. It depends on an environment conducive to innovation. It connects with the middle and lower reaches of the value chain. It tolerates failure. It requires an atmosphere that can accomodate wave upon wave of technological change. Taiwan has undergone liberalization and internationalization. But that has little to do with the innovation economy. The two are unrelated. The administration has limited resources. It must prioritize and make trade-offs.

Economic liberalization is something we must work towards. But no country's economy is completely uncontrolled. The ROC has promoted economic liberalization for 30 years, Cross-Strait exchanges are a sensitive issue still difficult to broach. Otherwise, Taiwan's economy is largely free. Therefore what is the point of trumpeting Free Trade Zone Pilot Programs at this time? Does Taiwan want to promote fitness and health to Mainland tourists, makikng them its main customer base? Does it want to eliminate regulatory restrictions, and set up pilot operations? If so, why not simply set up an International Medical Zone? If Taiwan wants to develop a Nike style logistics business, it can seek business investment within the Aviation City. The government must make clear what is to done. Its planning must conform to regulations. It must choose a proper location. It must "seek truth from facts" and "Just do it!" It does not need silly names such as "Free Trade Zone Pilot Program." This will enable people to experience the benefits of government policies. The atmosphere will no longer remain stifling.

In short, liberalization and internationalization is a  three decades-old policy. This old policy has fulfilled its interim goal. Its mission has been accomplished. This old trick is no longer useful. Taiwan's economy should be booming, like that of Silicon Valley's. It should be nearly immune to downturns in the global economy. The old tricks are outdated. That is why were are in today's fix. The public feels stifled. Officials issue laments. With this in mind, what should the focus of future policy be? Our general direction should be abundantly clear.
   
中時電子報 新聞
中國時報 　2013.04.26
社論－經濟去憂解悶 不能再用老招
本報訊

    　行政院江院長日前在工商早餐會上，用「悶」這個字概括描述過去幾年台灣經濟的情況，許多人聽了都有複雜的心情感受。一方面，這個「悶」字確實刻畫出當前經濟死氣沉沉的膠著，另一方面，由行政院長嘴裡講出這麼無奈的話，人民心裡當然更感無力。

    　從二○○○年到二○○八年，台灣經歷了扁政府鎖國恐共錯誤政策的束縛，平白無故糟蹋了八年時間，在產業布局上一籌莫展。好不容易挨到二○○八年政黨再輪替，但是馬政府執政五年，不知是受到世界經濟大環境不振之波及、抑或是政府政策失能之影響，迄今還闖不出新局面。人民對當下困局或許不能釐清判斷，但是行政院恐怕就必須要負起責任，向大家解釋清楚「今日之困局何以致之，如何解決」。

    　江院長在上周一次公開活動中指出，行政院將自由經濟與創新經濟列為台灣經濟轉型的雙軌政策。創新經濟在國內大概是個新名詞，是前年行政院科技顧問卡森博士來台演講時提出；卡森建議馬政府要迅速從效率經濟模式轉型到創新經濟模式。但是兩年過去了，財經部會多數都還是依然故我，用舊思維推動舊政策。究其原因，恐怕是因為大家對創新經濟都太陌生了，而對效率經濟「自由化、國際化」的政策論述太習慣了，一時間還轉不過彎來。

    　三十年前蔣經國當總統時，「自由化、國際化、制度化」的三化政策，是由當時的行政院長俞國華所提出。那個年代的台灣正逐步在建立自己的產業基礎，想要從關稅保護、貿易壁壘、匯率控制的管制經濟束縛中脫身。在國際大環境面，英國有保守黨柴契爾夫人執政，推動大規模的國營事業私有化。在美國，則有雷根總統呼應，大力推動減稅與減少管制。在學術界，則是芝加哥學派如日中天之時。這些自由經濟呼聲不但在各國國內響徹雲霄，也跨國鼓吹自由貿易。台灣就是在這樣的壓力環境下，開始了自由化與國際化的政策。誠如王作榮先生所說，與其說自由化國際化是什麼了不起的政策，不如說那是對老美等國際壓力下的正常回應。

    　經濟自由化與國際化的功效，就是讓台灣面對真實的國際挑戰，不再坐井觀天、也不再靠政府奶水補助存活，增加了我們經濟競爭的實力。但是就在台灣逐漸走向開放之際，經濟大環境又產生了重大的改變，由「拚效率競爭」逐漸轉變為「拚創新競爭」。這種競爭典範移轉的實例，就是矽谷、以色列、瑞士等成功經濟模式的興起。矽谷、以色列、瑞士等地都是天然資源極度貧乏，其唯一的強項就是人才薈萃。創新經濟所倚賴的不是稅率土地勞工等投入成本的降低，而是型塑一個有利創新、媒合上中下游價值鏈、包容失敗、一波接一波技術變革的氛圍。雖然自由化、國際化與創新經濟並無杆格，但是這兩類政策畢竟是不同的。行政當局若是資源精力有限，那麼重點與取捨就值得斟酌了。

    　經濟自由化當然是要努力的方向，但是全世界並沒有哪個國家的經濟是全無管制的。台灣推經濟自由化已三十年，除了「兩岸」這個敏感罩門解不開、放不下之外，其他也沒什麼不自由了。準此，我們真的不很清楚，在今天這個時候再推自由經濟示範特區，究竟是要做什麼？如果台灣是要推以大陸遊客為主要客群的健美醫療，因此想排除法規限制，進行試點營運，那何不乾脆設置國際醫療專區。如果是要發展類似Nike品牌的運籌接單業務，那就在航空城裡針對此業務招商。政府要想清楚要做的事、規畫好要配合的法規、選擇好要設置的地點，就實事求是地去做，不需冠上自由經濟示範這種無聊名號；這樣，人民才會有感、才不會持續有悶氣的低潮。

    　總之，自由化、國際化已經是有三十年歷史的老政策了。這些老政策業已經完成了它們的階段性任務，是該功成身退了。老招老式如果真的有用，台灣經濟今天就該像矽谷一樣蓬勃，幾乎不受世界景氣影響。正因為老招已如弩末，才有今日之困局、人民之氣悶、官員之嗟歎。明乎此，未來施政重點該放在哪裡，當已思過半矣。