On Oct. 23, the Directorate General of Budget, Accounting and Statistics (DGBAS, 主計處) announced that the jobless rate hit an all-time record of 5.26 percent in September. The figure has risen for 13 months in a row. It was also the first monthly rise ever for September. Meanwhile, the Council for Economic Planning and Development (CEPD, 經建會) said economic indicators flashed the "blue light" -- indicating recession -- for the 10th consecutive month.
Taiwan's competitiveness ranking, however, actually improved to No. 7 in the worldfrom No. 10 last year, according to the Global Competitiveness Report 2001 published on Oct. 20 by the Geneva-based World Economic Forum. It is to be hoped that the nation can learn a lesson from the ranking at a time when it is undergoing an economic downturn.
The WEF's report is divided into two parts: the Growth Competitiveness Index (GCI), which examines a nation's medium term (five to eight years) prospects for economic growth and the Current Competitiveness Index (CCI), which evaluates a nation's current economic fundamentals based on its productivity and prosperity. Both indices are derived from per capita GDP.
The GCI is comprised of three sub-indices: the level of technology, the quality of institutional policies and macro-economic conditions. The CCI is comprised of two sub-indices: the maturity of company operations, and the quality of the domestic business environment. Among the above five sub-indices, Taiwan ranked highest in terms of technology -- behind only the US, Canada and Finland. This clearly shows that Taiwan's high-tech industry has laid a solid foundation and is not inferior to those of the world's advanced countries.
But Taiwan ranked 24th in the category of institutional policies -- arguably the weakest link in the nation's economic development. Not only are the government's actions and policies unhelpful to local enterprises, but they are stumbling blocks to the productivity of local enterprises and the competitiveness of the nation as well.
If we look back at the nation's major financial and economic policies in recent years, the DPP government's crass conduct in halting construction of the Fourth Nuclear Power Plant (核四) seriously damaged its credibility in the eyes of foreign businesses. The government also reduced standard working hours from 96 to 84 hours per two weeks. That further worsened the economic situation facing traditional industries and threw more people out of work. Meanwhile, inadequate infrastructure has led to serious flooding whenever it rains heavily, dampening businesses' willingness to invest here.
We could look to Finland as an example of what can be achieved. The nation ranked at the top of both the GCI and CCI indices. Its outstanding performance, especially its political maturity and the way that its government operates, are exactly what Taiwan urgently needs. There are many political parties in Finland and severe political strife among parties with divergent ideologies. Because of the mature, democratic political culture, however, they are able to negotiate and communicate with each other in order to protect the nation's overall interests. A coalition government was formed by five political parties two years ago and it has operated stably and smoothly.
In contrast, Taiwan's parties are putting all their effort into political conflict. They can apparently get away with anything -- including demonizing their rivals -- to win elections. The only thing they care about is votes, not the nation's long-term economic development.
To all the political parties and politicians in Taiwan I want to say: repent and be saved!
Lee Jen-sin is an associate professor at the department of finance of I-shou University.
Translated by Eddy Chang
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