Uncertainty is bad: expert

Economists yesterday voiced concern over the ongoing post-election chaos, urging the government to resolve the dispute before it affects the recovery of Taiwan's economy.

"The worst enemy of the business community is uncertainty," Charles Kao (高希均), an economist and the publisher of the Chinese-language Commonwealth magazine, said yesterday during a luncheon held by European Chamber of Commerce Taipei (ECCT).

"The ruling Democratic Progress Party upholds the so-called `Taiwan First' policy, but the fact is the policy cannot be sustained without a robust economy ... as a result, the new government must put the economy first and put aside political ideology," Kao said.

Citing statistics such as the falling jobless rate and the rising economic growth rate from the Directorate General of Budget, Accounting & Statistics, Kao said local and overseas investors are upbeat about the outlook of the nation's economy, but if the political dispute drags on much longer, Taiwan may have difficulty convincing investors to stay.

Besides calling on the new administration to restore government credibility and reconcile domestic unrest, Kao suggested improving the relationship with China is needed in view of the huge amount of trade between the two sides. The realization of direct cross-strait transportation that business groups have been pressing should certainly be put on the top agenda, Kao added.

China has outpaced Japan and the US to become Taiwan's largest importer in recent years. Last year, Taiwan exported nearly US$49.77 billion worth of goods to China, according to statistics from the Ministry of Economic Affairs.

Chen Tien-jy (陳添枝), president of the Chung Hua Institution for Economic Research (CIER, 中經院), who was also invited by the ECCT to give a speech yesterday, echoed Kao's proposals, saying Taiwan is well-positioned to take advantage of China's booming domestic demand as it possesses an edge in geography, language and culture.

China is required to lift bans on foreign investment next year as part of its WTO accession agreement.

As China is speeding up its process to digitalize its broadcasting system by 2008, when it will host the Olympic Games in Beijing, Taiwanese liquid crystal display screen (LCD) makers have another huge opportunity, Chen said.

Taiwan controls critical technology for flat-panel making, and is the world's largest supplier of flat-panel screens. AU Optronics Corp (友達光電) and four local LCD screen makers will account for 49 percent of global spending on LCD-making this year, overtaking South Korea as the world's largest LCD supplier, researcher DisplaySearch said earlier this month.

However, Chen said that as long as President Chen Shui-bian (陳水扁) was in power, his administration will make slow progress on cross-strait issues, which will further curtail trade dependency on China.

In view of the predicament, Kao suggested that the new Chen administration use business experts and industrialists such as CIER Chairman Vincent Siew (蕭萬長), Acer Inc chairman and CEO Stan Shih (施振榮) and Deputy Legislative Speaker Chiang Pin-kung (江丙坤), who is also a former minister of economic affairs, to hold important positions to improve the nation's economy.