The first and second rounds of the presidential debates have been held. The purpose of such debates is to present the truth and help direct policies onto the right path. Therefore, more in-depth discussion should now take place with respect to some of the issues not fully elaborated during the debates.
In particular, we hope that the political parties and the public will carefully examine the candidates' proposals so that the people can understand the strong and weak points of the candidates' campaign platforms and policy-administration capabilities.
Focusing on the issues discussed during the first debate, it is worthwhile to examine the debate in terms of economic growth and who should be held responsible for recent unsatisfactory economic growth, if it is truly unsatisfactory.
Chinese Nationalist Party (KMT) Chairman Lien Chan (
On the other hand, the Democratic Progressive Party (DPP) sometimes uses the fact that our growth rate is higher than those of other high-income-earning countries to argue that we are not so bad off after all.
KMT Vice Chairman Chiang Ping-kun (
It is wrong to compare Taiwan with countries in which incomes are only around one-tenth of incomes in Taiwan.
For the same reason, it is not accurate for Chiang to say that it is best to measure economic growth against economic growth in the past. This is because it is impossible to compare a person's growth at the age of 20 with his or her growth at the age of 10.
Looking at the issue this way, while Chen's comparison of Taiwan with other countries grouped among the "four little dragons" of Asia is not entirely accurate, it is a more reliable way to go. Such a comparison indicates that our performance is indeed no worse than that of the other "little dragons." In other words, the KMT-People First Party (PFP) camp should no longer accuse the DPP of incompetence in economic policy.
The over-extension of loans by financial institutions has created a capital-shortage phenomenon and has generated problems for many business enterprises. This has been a major reason for the lack of economic demand domestically. Chen accused the pan-blues of pulling the government's leg by boycotting the approval of the Financial Reconstruction Fund to deal with the loan extension and loan-default problems. Lien, on the other hand, said that the percentage of loans going into default during the KMT era was only around 4.8 percent, and that it was only after the DPP came into power that the figure climbed to 8.04 percent.
Lien said the default problem was created by Chen and therefore he should take care of it. This is also an inaccurate statement. Many problems created during the KMT era, such as an excessive number of banks and poor management, were merely inherited by the DPP. The opposition parties should not stand in the way of corrective and remedial policies and then ask the DPP or Chen to take care of the problems alone.
In addition, problems in the finance sector have long existed. The nation's financial institutions are poorly run and supervised. Many loopholes exist concerning the internal management of many business enterprises as well. As a result, many businesses have been sucked dry financially and many financial institutions are on the verge of collapse. Many of the loans in default today already existed at the time of the local financial crisis in 1998. However, at the time, the KMT relied on postponing the due dates of the loans as a way to help out businesses. Some banks actually covered up their problems, keeping the public and the government's supervisory agencies in the dark.
Statistics indicate that after 1999 the finance sector extended only minimal loans to the private sector.
Today's existing defaulted loans were mostly made before 1997. The KMT and PFP should no longer shirk their responsibility for the loan defaults. Nor should they obstruct the government's efforts to engage in re-
structuring of the finance sector.
The most fully-elaborated economic policy presented during the first debate was Lien's proposal to offer a preferential 18-percent interest rate for 50 percent of the pensions for seniors paid by labor insurance. The first problem with this policy is the funds required for implementation. Chen and the pan-purple alliance both think this will require NT$100 billion, creating a major hole in the treasury. But Lien believes that only NT$9 billion will be needed. The gap in the funds is a grave problem.
Both sides need to clearly explain to the people how they calculate their figures so that the people can decide for themselves more objectively whether to support such policies. At the same time, the people should be able to appraise the policy-implementation abilities of the two sides based on the accuracy of their respective calculations.
Lien made some effort to explain his calculations regarding his interest-rate plan during the debate. He deserves recognition for making an attempt. However, his explanation demonstrates a major flaw with the policy -- that is, many workers will suffer from unequal treatment under his plan. Lien indicated that the policy will benefit about 140,000 workers. This number is only a small fraction of retired workers, suggesting that most workers will not enjoy preferential treatment.
Lien said that not all workers will necessarily get the money and that only about 40 percent will reap any benefit. In other words, retired workers who cannot receive senior pensions as a result of unreasonable provisions in the labor law would not be able to enjoy preferential treatment to begin with.
Workers who are not qualified for such pensions are the real socially-disadvantaged workers who need the help of the government. If those who receive senior pensions use the money to start a small business because they do not have enough savings, they would not be able to enjoy the preferential interest rate either. In conclusion, this policy cannot help those who need help the most, so it is a policy that fails to conform to the spirit of justice and fairness.
The above-described policy was inspired by the preferential18-percent interest rate that applies to the pensions of civil servants. However, that policy has not only received harsh criticism from all sectors, but even the KMT decided when it was in power that people who retired after 1995 would no longer enjoy such preferential treatment. It is indeed puzzling that Lien has proposed such an unreasonable policy.
During the debate, Lien said that preferential interest rates for civil servants, teachers and members of the military originated during a very unique time in history. However, since the time is now different, why give more workers such preferential treatment? When the 18-percent interest rate was first extended, the prevalent market interest rate was more than 10 percent. The government only had to subsidize a small amount. Now that the market interest rate is only about 1 percent, the government would need to spend huge sums of money on the 18-percent rate.
The financial burden on the government is not very fair. That is why people oppose preferential rates.
Even more worrisome is the fact that when Lien first proposed this policy, public opinion was very much against it. Yet the KMT and PFP have shown no sign of changing their minds. The fact that such a policy is being proposed indicates that the analytical and research abilities of the pan-blue's advisors on financial and economic policies are not very good. This will lower the general public's appraisal of Lien and Soong's policy-implementation ability.
Hopefully, both the pan-green and pan-blue camps will present enough substance during the rest of the campaign for the voters to know how to cast their votes.
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