EDAC anniversary a time to reflect

Business leaders voiced mixed reactions as government officials congratulated themselves yesterday on the one-year anniversary of the Economic Development Advisory Conference (EDAC, 經發會), saying the government had much more to do.

Stan Shih (施振榮), the chief executive officer of the Acer Group (宏電), said the domestic investment environment has improved since last year. But he said that direct shipping links with China would go a long way toward helping business become more competitive.

Another tech-sector pundit said the conference's promise of greatly liberalized rules for trade with China have gone unfulfilled.

Huang Chung-jen (黃崇仁), chairman of the Taipei Computer Association, said the government has achieved some of EDAC's 322 recommendations, such as reducing the value-added tax on land by 50 percent and the lifting of a ban on investment in 8-inch wafer production sites in China.

He gave the government a score of 70 points for its efforts in implementing the conference's recommendations, although he echoed the other business leaders in saying the government still needs to push ahead with the EDAC's recommendation of launching direct shipping and air links across the Strait.

Vice Premier Lin Hsin-yi (林信義) said that "The government has done all it could to improve the nation's economy."

Upholding an implementation rate of over 93 percent, Lin, however, said that the government needs to work harder to address the public's lack of confidence in the local economy, reduce the government's budget deficit, combat the nation's rising unemployment rate, improve the local investment environment, and promptly deal with non-performing loans and a credit crunch that has resulted from painful financial reforms.

If fully implemented, the EDAC's resolutions may contribute to the nation's economic growth rate by adding 0.98 percent to the GDP annually, while also helping to cut the jobless rate by 0.35 percent annually until 2008, officials said.

Improved figures

A statement by the Presidential Office forecast that exports would continue to rise and private investment and consumption would continue to strengthen. It said that a total of 25,000 jobs have been created since last year.

Stimulated by preferential rental policies, 57 enterprises have applied for use of 39 hectare of industrial land, prompting a total of NT$19.5 billion in investments, while 28 enterprises plan to set up their international headquarters in Taiwan, the statement said.

Stressing the importance of financial reform, Minister of Finance Lee Yung-san (李庸三) said that the president has instructed the ministry to study the possibility of allowing foreign banks to purchase stakes in state-owned banks in a bid to inject more foreign competition into the market.

Facing a possible double-dip recession in the US, Ho Mei-yueh (何美玥), a vice chairperson in the Cabinet-level Council of Economic Planning and Development, said that economic uncertainty in the US and Europe may impact Taiwan's economy.

As a result, she suggested that Taiwan place more of its focus on trade and investment in Asia.

"In addition to financial reforms, technological and financial breakthroughs will be the key to our economic survival," she said.

The brainchild of President Chen Shui-bian (陳水扁), the EDAC invited heavyweights from political, business and academic circles to map out a course of action to beef up sagging industrial competitiveness, a weak investment environment, an ailing and corrupt financial sector, growing unemployment and cross-strait economic and trade relations.