The sudden departure of Tang Fei (唐飛) from the premiership and the resignation of the Cabinet will cause only a temporary blip in Taiwan's economic landscape and give President Chen Shui-bian's (陳水扁) stumbling administration a chance to right itself through the appointment of a new cabinet, according to observers.
While Tang's departure rattled the bourse down to a 20-month low yesterday, its impact will be limited to the short-term and the health of Taiwan's overall economic situation will be dependent on how well Chen manages to form a new and more cohesive Cabinet, according to Wang To-far (
Wang said that disagreements within and between ministries have caused confusion among the public about the direction of government policy.
Most notably of course was debate over whether to complete the Fourth Nuclear Plant, with the premier firmly opposing the president's stance and the heads of other ministries pitching in with conflicting views on the issue.
"If the DPP can learn from this ... [and realize] the need to communicate clearly and achieve some consensus ... citizens will have much greater confidence in the government and uncertainty will be reduced to a minimum," Wang said.
Wang's sentiments were echoed by Paul Cassingham, president of the American Chamber of Commerce, who said, "Hopefully the changes that are coming in the Cabinet will enable it to move forward as a unified group and better ensure that policy pronouncements are properly coordinated within the Cabinet team before they're made public."
Cassingham also believes that the negative effects of the reshuffle will be limited to the short-term, adding that foreign investor sentiment should remain largely unaffected as it is "driven much more by medium and long-term outlooks."
"Taiwan is going through very significant political changes for the first time and it's totally natural in that sort of pioneering context that there's going to be some adjustments," Cassingham said.
"The important thing to remember is that the economy here according to the statistics remains quite strong, and we're still looking at something north of 6 percent annual growth -- and that's very good territory to be in," he said.
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