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Industrial groups warn against strike

The nation's major industrial groups yesterday called on the anti-President Chen Shui-bian (陳水扁) group not to go on strike, warning that the drastic measure would hurt Taiwan's economic growth and cause long-term political instability.

The warning came after Shih Ming-teh (施明德), leader of the sit-in campaign to oust Chen, said on Thursday that they would consider launching a nationwide strike to force Chen to step down.

"We respect different political stances, but we are shocked and deeply worried about the proposal of staging a strike as a major appeal," said the nation's six major industrial groups in a joint statement released yesterday.

The six industrial groups include the Chinese National Federation of Industries (工總) and Taiwan Electrical and Electronic Manufacturers' Association (電電工會), which represent at least 14,000 Taiwanese companies in the electronic and traditional industries.

A massive strike would "severely dampen foreign and local investor's confidence causing a loss of export orders and freezing industrial activities," the statement read.

On Thursday, Minister of Economic Affairs Steve Chen (陳瑞隆) warned that Taiwan's economy could not afford a strike as such a move would severely affect investor confidence and impact investment in Taiwan, leading to an economic slow-down from which all would suffer.

The nation's economy will suffer NT$30 billion (US$910.9 million) a day in lost production value in the event of a nationwide strike, according to an estimate by the Taiwan Institute of Economic Research (台經院).

But, experts did not expect an immediate impact to come.

"The strike will heighten the stand-off between people with different political tendencies, which will hurt investor's confidence and thereby Taiwan's stock market," said Cheng Cheng-mount (鄭貞茂), a senior economist at Citigroup's Taiwan branch.

But as no substantial plan regarding the scale and duration, of any strike was made by the anti-Chen group, it would be difficult to say how seriously any action would hurt Taiwan's economy, Cheng said.

Cheng said currently the nation's annual growth of 3.9 percent in gross domestic product (GDP) he forecast for this year would renew unchanged.

Andrew Teng (鄧安瀾), an analyst with Taiwan International Securities Corp (金鼎證券), said political instability has put investors on the sidelines over the past week, citing thin turnover.

But, Teng said, he did not expect an immediate impact on the stock market as the campaign to throw out President Chen has not to a decision to stage a strike.

"Besides, with foreign investors' support, I don't expect the TAIEX to plunge," Teng said.

Overseas fund managers bought a net of NT$21 billion worth of local shares during the past five trading sessions, representing their long-term faith in local stocks, according to Teng.

The TAIEX index fell less than 2 percent since the beginning of the week to 6,681.09 points yesterday.
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