Everyone has been holding high hopes for the economic situation following the Lunar New Year. The well-known US think tank The Conference Board predicts that the global economy will grow by 5 percent this year, the most promising outlook in 20 years. The US economy may even expand by 5.9 percent. Taiwan's economy is also expected to flourish, and we shouldn't be asking whether the economy will take a turn for the better, but rather by how much it will improve.
Taiwan's economy is improving after a spell of bad luck. The signs of this change began appearing during the second half of last year, and thanks to a strong revival during the fourth quarter, annual economic growth reached 3.2 percent -- the strongest performance among the four Asian tigers. The economic situation heated up even more following the Lunar New Year, as reflected in the economic monitor indicators, flashing yellow-red for the first time in four years, and on the stock market, the window on the economy.
Although the economic situation is improving and the unemployment rate has dropped to below 5 percent, quite a number of people are still unemployed. From this perspective, we not only have to cut the unemployment rate, but also rebuild confidence before Taiwan's economy will be able to emerge from the shadows.
Looking at economic history, the most famous example of rebuilding economic confidence must have been set by US president Franklin Roosevelt, who brought about a radical change following the economic panic in 1930s America. Apart from proposing the New Deal, which was actively directed by the government using Keynesian economic policies, he placed special emphasis on rebuilding the public confidence that had been lost amidst the economic panic.
In his inaugural address, Roosevelt, one of the greatest US presidents of all time, had these unique words to say after having diagnosed the crumbling public confidence in the economy: "Let me assert my firm belief that the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance ... The people of the United States ... have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership ..."
It was this unrelenting strength that allowed the US to leave the economic panic behind. Public construction activities under the New Deal, such as healthcare, the building of bridges and roads and the planting of forests, were in fact a matter of psychological reconstruction serving to eliminate panic, stimulate public enthusiasm and rebuild economic confidence. Once this fighting spirit was aroused, latent strengths were immediately awoken and the economic panic was gradually eliminated.
The impact of the decline in Taiwan's economy in recent years can of course not be compared to the economic panic in the US 71 years ago. On the other hand, even though the economy is reviving, we cannot sit idly by and wait for the needed rebuilding of confidence. Apart from unemployment figures having to come down further, Taiwan has in recent years also had to face the challenge of globalization and China's economic attraction, and has consequently been compelled to make a forceful effort at achieving economic adjustment and transformation. Since this situation unavoidably leads to temporary pain due to frequent setbacks, we will not be able to complete the effort without strong determination.
Simultaneously, the transfer of political power has led to a surge of people predicting the demise of Taiwan. In the first debate between presidential candidates, someone even challenged the fundamental fact that the economy has improved. This kind of prejudiced view of the overall economic situation, seen through deeply-blue glasses, is running rampant in the legislature and media -- at a time when Taiwan, our common mother, is facing a political and economic social transformation, they call her old and ugly and say there is no tomorrow.
Therefore, when rebuilding confidence in Taiwan's economy and striving for stability and prosperity, the people of Taiwan must do what Roosevelt stressed 71 years ago -- register a mandate that they want direct, vigorous action and ask for discipline and direction under leadership.
Lu Shih-xiang is chief executive officer of the Foundation for the Advancement of Media Excellence and is a member of the Taipei Society.
Translated by Perry Svensson
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