We were glad to see high up in the American Cham-ber of Commerce's annual white paper on doing business in Taiwan the absurdity of Taiwan being bound under its WTO commitments to allow importation of large motorcycles, but the Ministry of Transportation's refusing to license such machines for the road. Not because, at this newspaper, we have a collective yearning to imitate the young Marlon Brando in The Wild Ones -- well, not all of us -- but because there could be no finer example of the kind of legalistic pettifogging that has for so long been one of the chief characteristics of Taiwan's government. One of the things that puzzles us is why after two years of DPP government this should still be so.
With the KMT in power of course there was an obvious tension between its business elite, who had grown fat on cheap money from government-controlled banks invested in smokestack industry protected by high tariffs, and the kind of step-by-steep economic opening that those in government preached. The result was a St. Augustine-like paradox: Oh God give us open markets and make us an international economic player -- but not yet.
But given that the DPP has nothing like the vested economic interests of the KMT, why is the situation, after two years of DPP government, virtually indistinguishable from what has gone before. Most of AmCham's criticism is familiar to anyone who has read the organization's last three reports. Why has so little changed?
The answer has to be that there is neither an understanding of where Taiwan is going, an understanding of what needs to be done to get there nor the political will to make such things happen.
Part of the problem is that after years of central planning which served Taiwan well, its bureaucrats just can't bring themselves to open the doors. And there is no political determination to make them. So little change has been made in the past two years to suggest that it is business as usual at the Ministry of Economic Affairs -- the buying-off of criticism by the KMT's powerful business-sector cronies by not rocking their boats. If Taiwan is going to pander to a lobby, however, it is not this one it should be lis-tening to.
Taiwan's future is going to be determined not by 10-year plans on biotech development or whatever is the "next big thing" after electronics, but by the country's ability to become a world-class center for services. If the economy is to mature it will inevitably follow the trend of all developed countries away from a heavy reliance on manufacturing and toward a larger service sector. To be a regional player means full implementation of the spirit, not just the letter, of WTO agreements, a specific government agency tasked with policing WTO compliance, an end to flagrant intellectual property right (IPR) violations -- how can you build a "knowledge-based" economy when that knowledge can be stolen by anyone with virtual impunity? -- and an end to the ridiculous practice of keeping foreign know-how out of the country as a way of protecting the ineptitude of locals -- you also can't build a knowledge-based economy if you keep the people with the knowledge from coming and working here.
Free trade has to be action that brings about a state of affairs that will benefit everyone. Unfortunately it has usually been see as a theory, paying lip service toward which will win Taiwan political -- not economic -- friends abroad. What is needed now is someone with the vision to understand what an open market regime must be, the political will to push through the measures that will be needed and the brutality to stamp on the toes of many of the current business elite. And he, or she, had better be found soon because time, as AmCham noted, is running out.
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