Mon, Nov 07, 2005 - Page 8 News List

Editorial: Conference won't cure nation's ills

In a bid to revitalize the nation's sluggish economy, President Chen Shui-bian (陳水扁) announced last week that a second Economic Development Advisory Conference will be held early next year. The conference comes in response to a call from six major business and industrial groups, and will review developments in the nation's trade, finances and cross-strait exchanges.

Taiwan last held such a conference in August 2001. It gathered together some 300 business leaders, academics and politicians who reached consensus on 322 issues -- including halving the capital-gains tax on real-estate profits and opening up the nation's stock market more to foreign investment. According to the latest government documents, an impressive 90 percent of those recommendations have been implemented.

This second conference comes at a time when the nation's export dominance in the world market has fallen, the local bourse has been the worst-performing stock market in Asia and both domestic investment and consumption have stagnated.

The government plans to hold the conference after the Dec. 3 local government elections, hoping that the recent political turmoil will by then have settled down. Unfortunately, the political deadlock is likely to continue after those elections. Seeing no political reward in cooperation, opposition parties will almost certainly boycott any economic initiatives brought by the ruling DPP through at least the 2008 presidential election.

Some have argued that Taiwan's economic problems persist because the government has failed to implement the remaining 10 percent of the last conference's recommendations, most of which dealt with cross-strait policy. But others say that the last conference's flawed policies, such as allowing more capital outflow to China, are precisely the cause of the nation's economic quagmire. Given such contradictory conclusions, reaching a political consensus on where to go from here looks like an impossible task.

The government's goal is laudable: It wants to use a national conference to solicit the collective public will and attempt to untangle political and economic issues. But given the nation's deep political polarization, trying to untie such knots is unrealistic. Moreover, there is already much that the government can do to improve the nation's investment and industrial environment, without the need for another conference.

Holding a conference will not be effective if the government only cares about the formalities and appearance of economic consensus, rather than tackling the thorny political issues that lie beneath. And when it comes to finding agreement on cross-strait policy, the government isn't likely to make much progress.

But what it can do is accelerate plans for free-trade agreements with major trading partners such as the US, Japan and ASEAN nations. Such agreements would reduce our economic dependency on China and prevent Taiwan from being marginalized.

The plan to hold a second national economic conference may be a genuine effort to boost the economy. But if politics prevails over economics -- as is likely -- the only thing the meeting is likely to produce is a lot of hot air.

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