The number of firms and factories ceasing operations has been rising every month since May last year, an indication that the current economic slump has seriously effected the development of local industries, a Chinese-language newspaper and an opposition lawmaker said over the weekend.
The paper said that 1,341 factories were shut down in March, a fourfold increase over the same month last year, and the number of factory closures this year is expected to break the record of 6,788 reached during the 1998 regional financial crisis.
Last year, 4,995 factories were shut down across Taiwan, up 25.44 percent from the 1999 level of 3,982, with more than 100,000 people out of work.
Two primary reasons for the closures are a dramatic slowdown in factory orders from overseas coupled with an exodus of manufacturers to China and other locations. Companies are mainly in search of cheap land and labor for their operations.
Meanwhile, an opposition legislator decided to go on a witch hunt by comparing the performance of the previous government with the Chen administration.
New Party lawmaker Lai Shyh-bao (賴士葆) said yesterday, along with National Taiwan University professor Tu Chen-hua (杜震華), that Taiwan's economic progress is fast losing its steam under President Chen Shui-bian's (陳水扁) administration.
Both Lai and Tu called on the government to reduce the number of foreign workers allowed into Taiwan and assist businesses by removing investment obstacles.
Taiwan's unemployment rate hit a 15-year high of 3.89 percent in March and it is expected to exceed 4 percent in April. The economist-turned lawmaker attributed the rising unemployment rate to the sagging economic activity by private firms, gauged by 18 criteria.
* Some 1,340 factories were shut down in March, a fourfold increase over the same month last year.
* Last year, 4,995 factories were shut down, up 25.44 percent from the 1999 level of 3,982.
* The number of factory closures this year is expected to break the record of 6,788 reached during the 1998 regional financial crisis.
The criteria, including the number of companies established, the number of factories closed, the revenues of business tax levied and the growth of private investment reached, is being used to compare economic activity under the Chen's government between June last year and last March and that during the time of KMT government between 1997 and May of 2000.
For instance, Lai said that the number of newly established firms under the new administration is 480 less per month than under the previous administration, while the number of business folding under the new administration is 233 more per month than that under the previous administration.
The number of factories ceasing operations is 169 more per month, he said.
Other notable indicators of the weakening economy include a drop in revenue from business taxes, which have fallen from an average of NT$20.8 billion (US$650 million) to NT$17.5 billion (US$546 million) per month; loans extended by financial institutions to private firms has been pared back by 2.07 percent per month; and the growth of private investment is 5.81 percent less per month under the new administration than that of the previous administration.
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