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Which way to go with investment still unclear

`When I see the government making "invest in Taiwan first" one of its priorities while stressing the necessity of the "go south" policy, I can't help but worry.'

A few days ago, President Chen Shui-bian (陳水扁) again promoted his "invest in Taiwan first" policy -- a key policy conclusion from the recent Tashee resort meeting. He also stressed that ministers and vice ministers will be responsible for pushing the policy forward. This is a fourth addition to Chen's "three priorities" -- investment first, economy first and Taiwan first.

Within 24 hours of Chen's declaration, however, Premier Yu Shyi-kun held a ministerial meeting to promote the "go south" policy. Not only did he establish a ministerial coordination committee, but he also decided he would head it. It's evident that while Chen is encouraging an "invest in Taiwan first" policy, it may not be a desirable strategy for many entrepreneurs. Moreover, it is not clear whether "invest in Taiwan first" or "go south" has priority.

I remember when former president Lee Teng-hui (李登輝) was promoting his "go south" policy, the New Society Foundation (新社會基金會) held a conference in 1994 to study the nation's investment environment, as well as the formation and influence of the "go south" policy. Then I-Mei Foods Co president Henry Kao (高志尚) -- as a representative of local traditional industry -- made a simple but inspiring comment on the exodus of Taiwanese businesses. "Many businesses have no choice but to make investments abroad," he said. "Who would invest in those unfamiliar places if the domestic environment is good for their business development?" His words clearly expressed the helplessness of some local businesses investing abroad.

I believe most local businesses will naturally make Taiwan their first choice for investment -- if domestic production and labor costs were not so high, development policies for industries not so obscure, the distribution of resources not so uneven and the political situation not so unstable. China, the US, Southeast Asia and other places would seem a lot less desirable.

When I see the government making "invest in Taiwan first" one of its priorities while stressing the need for the "go south" policy, I can't help but worry. Will the government throw its resources into the "go south" policy based on obvious diplomatic considerations and thereby ignore the necessity and urgency of improving the domestic invest-ment environment? The failure of Lee's "go south" policy and the gradual decrease in domestic investment are good examples. Those in power must carefully calculate and distribute the government's resources to these policies. They must evaluate the effectiveness of these policies so as not to repeat mistakes made by their predecessors.

How can the government find a balance between "invest in Taiwan first" and "go south?" This is a serious issue. After all, it's easy to shout slogans. But the key question is how to realize these slogans. This is also an important index by which the public can measure the government's ability.

Huang Kwei-bo is an assistant professor in the department of diplomacy of National Chengchi University.

TRANSLATED BY EDDY CHANG
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