Council for Economic Planning and Development (CEPD) Minister Christina Liu (劉憶如) wants to focus on domestic investment to drive economic growth, but the council’s priority should instead be improving the nation’s investment environment and economic structure, economists said yesterday.
“Without an attractive investment environment, the council’s efforts to create investment in Taiwan will not have their intended effect,” Hu Sheng-cheng (胡勝正), a research fellow at Academia Sinica, said by telephone.
Hu, who chaired the council from May 2004 to January 2007 under former president Chen Shui-bian (陳水扁), said that it was acceptable and understandable for the council to help foster domestic investment, because the Ministry of Economic Affairs has not focused much on service--oriented industries previously.
However, the council should look into issues in the current investment environment rather than the investment itself, Hu said.
Last week, several lawmakers questioned the benefits of the council’s “Invest in Taiwan” project, even though Liu said the project has attracted NT$1.1 -trillion (US$38.08 billion) in potential -investments since its launch in August last year.
Democratic Progressive Party (DPP) legislators Su Chen-ching (蘇震清), Chen Ming-wen (陳明文) and Lin Tai-hua (林岱樺) said the council had focused too much on a single project, while failing to execute its original role of designing the nation’s overall economic development plan and helping coordinate the efforts of different government agencies.
“Taking Kuokuang Petrochemical Technology Co’s (國光石化) planned naphtha cracker project as an example, the key point is policy consistency and execution if the government wants to attract more investment here,” Hu said.
Another economist said the nation’s export-oriented economic structure is another issue restricting the growth of domestic investment.
“As long as the structure -remains, foreign investors will not show more interest in investing in Taiwan, even if the government has lowered the business income tax rates and the loan rates,” the economist said by telephone on condition of anonymity.
Because exports account for about 75 percent of Taiwan’s GDP, compared with a combined 25 percent share by domestic consumption and investment, the economist said exports would remain the most important sector for Taiwan in the near term.
“In terms of investment, the government has already done what it can,” he said.
However, economists praised Liu’s aggressiveness and positivity, which has helped distinguish her from many other government officials.
“I do respect her positivity. Nonetheless, it is more important to achieve some actual results,” Hu said.