Every economic policy has advantages and disadvantages. Sound policymaking involves a balance so that benefits are maximized and drawbacks minimized. A corollary of this is that policymakers ought not take significant risks to gain small advantages.
President Ma Ying-jeou (馬英九) and his administration are focusing on only the benefits of their cross-strait economic and trade policies and ignoring their disadvantages.
The result of this approach is that necessary precautions for the possible negative consequences of these policies are being ignored.
If this behavior only applied to the occasional policy, it would be understandable and forgivable.
OVERLOOKING
But there is growing evidence that the Ma administration is overlooking almost every possible negative consequence of its cross-strait initiatives.
Direct cross-strait flights are one example of this approach. Ma has repeatedly said that the flights would make it easier to sell Taiwanese produce to China and would therefore benefit Taiwanese farmers.
However, he has neglected to mention that the reverse is also true: Direct flights will make it easier for China to sell its produce in Taiwan — thus adversely affecting the domestic agricultural industry.
The fact is that the amount of produce and processed agricultural products that China exports to Taiwan already exceeds the amount that Taiwan exports to China by a factor of five to six.
With the convenience of direct cross-strait links, it is very likely that this situation will persist. China will continue to sell five or six times more produce and processed goods in Taiwan than Taiwan sells in China.
COVERING UP
However, the Ma government has tried to cover up the repercussions of its poorly designed policies and has managed to convince the public that direct flights will be a complete success as far as Taiwanese farmers are concerned.
The government has also failed to take necessary precautions against the negative consequences that will follow from this.
The Ma administration promotes direct flights by saying that they are likely to attract more Chinese tourists, but again it has avoided mentioning that it will also be more convenient for Taiwanese tourists to visit China.
Considering that a three-day trip to China currently costs less than a trip to Kenting (墾丁), Hualien or Taitung, many holidaymakers are likely to prefer taking their vacation in China rather than staying in Taiwan.
ABOLISHED
In addition, the government recently abolished regulations stipulating that public servants could only apply for subsidies using their Citizen’s Travel Card (國民旅遊卡) while traveling abroad. This will have a serious impact on the development of the domestic recreation and tourism industries.
Moreover, those traveling to China will bring back low-priced products.
This will in turn harm the nation’s retailers.
The Ma administration isn’t taking this likely fallout seriously, and the result is that it has not mapped out complementary measures to reduce the impact.
Many such incidents demonstrate that the Ma administration and associated individuals have attempted to conceal the risks of the government’s cross-strait policies by exaggerating the benefits.
Chen Po-chih is chairman of Taiwan Thinktank.
TRANSLATED BY TED YANG
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