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Let consensus help lead the way

'The experiences of the UK and the US show that letting government investment lead economic development is not a simple economic plan.'

With its democratic transition, the nation has written a new page in its history and its deepened democracy has become a key asset when dealing with the international community. However, globalization means that developing democracy, bringing wealth and happiness to the public and building a fair and just society will be a challenge.

During campaigning ahead of the presidential election, relaxed economic policies, market deregulation, Keynesian infrastructure projects and an efficient, clean and capable government were the hopes of the mainstream public. This shows that the nation is moving toward neoliberalism. However, we should not ignore the contradictions and problems behind neoliberalism, but rather proceed with caution.

Relaxing policies and deregulating markets will allow people, goods and information to circulate more freely, so the nation should prepare for the risks such mobility creates. Economically, the opening should benefit local industry, not foreign capital. Socially, local labor should not be sacrificed for the sake of the market economy. The conflict between policy relaxation and labor interests is a dilemma. China and South Korea have sacrificed labor rights by relaxing policies to attract foreign capital, which is a kind of social time bomb. Taiwan should recognize and deal carefully with these contradictions and understand that the labor force in a democratic society is the foundation of a sustainable economy.

In terms of social balance, market deregulation will bring prosperity and growth to some places, but imbalances will grow as others lose out.

The nation should not think that improving the local investment environment is the only way to solve imbalances. Past experience has shown that strengthening competitiveness in disadvantaged areas magnifies social injustices.

The economic opening in Tibet has allowed outsiders to benefit greatly from the tourism industry, but tensions grew because locals lost out. A central government cannot blindly direct regional distribution without appropriate policies to prevent social division and inequality.

The government must also be more cautious about the contradictions and conflicts produced by government market intervention in combination with policy relaxation and market deregulation. There is a downside to policies based on ideas of efficiency, a clean and capable government and Keynesian infrastructure. With a rigid government system, capable bureaucrats may create further restrictions, but in a neoliberal system, administrative reform is challenging.

The Singaporean and South Korean governments, for example, have chosen laudable goals for national development. Singapore defines itself as a city of financial investment and international conferences, while South Korea defines itself as a country of cultural innovation and international conferences.

How should Taiwan define itself? This deserves in-depth discussion. The incoming administration has proposed an Asia-Pacific Regional Operations Center (APROC), which would require a large skilled and international force of skilled workers, in addition to financial liberalization, high-quality urban life, cheap and easily obtained land and office space and stable but flexible labor policies.

These issues involve educational, financial and economic factors. With the government as it stands, even the most capable administration would be unable to perform efficiently. Government reform is necessary.

Is the APROC project the core target for the nation to improve its competitiveness? If not, what should the goal of future development be? Cultural innovation, green energy and sustainable development? This issue cannot be resolved without gauging public opinion to look for directions, which is as important as improving government efficiency.

In the end, it is the ability of democratic societies to lead that is the most important force for progress.

The experiences of the UK and the US show that letting government investment lead economic development is not a simple economic plan. Rather, it entails re-examining the government, the relationship between central and local governments and public welfare.

“The third sector,” or nongovernmental, nonprofit sector, along with a new partnership between the public and private sectors and cooperation among local governments are all key Keynesian mechanisms.

This involves not only government reconstruction, but also key issues such as financial policy, public welfare and land redistribution. Without these, large, misplaced investments will lead to financial deterioration and damage to national competitiveness.

Since Taiwan has chosen the path of neoliberalism, it is the public’s responsibility to face the challenge united.

The government should promote fair trade, not free trade. It should relax restrictions, but not labor protections. It should invest in sustainable infrastructure projects. It should pursue administrative reform to ensure an efficient, upright and capable government.

Furthermore, it should continue to develop the nation’s democracy so that all social groups continue to engage in dialogue with one another. Let’s make communication and consensus the spirit of progress.

Hsu Yen-hsing is a doctoral student at the Graduate Institute of Building and Planning at National Taiwan University.

Translated by Eddy Chang