President Ma Ying-jeou (馬英九) has been playing the reshuffle game. By forcing Liu Chao-shiuan (劉兆玄) and some in his Cabinet to step down and appointing Wu Den-yih (吳敦義) and Eric Chu (朱立倫) as the new premier and deputy premier and charging them to form a new Cabinet, he has attempted to alleviate public complaints and improve his own standing.
The new Cabinet was announced on Wednesday evening. In general, it seems to be old wine in new bottles.
The new Cabinet does not make up for Ma’s dour administrative style, his lack of efficiency in governance or his lack of daring and determination.
Instead, he has found himself another group of people to implement old policies. The result is a reshuffle that will not help revitalize the economy, which has been in a disastrous state since the second half of last year. Taiwan’s future continues to look uncertain.
The new Cabinet seems to have given many people renewed hope, but a closer look shows that the situation the government has created over the past year has left us with worse government debt and a larger deficit than expected.
Concrete economic benchmarks such as economic growth, the unemployment rate, growth in imports and exports and per capita GDP are all declining. As daily life gets harder by the day, the public is at wit’s end.
Will the new Cabinet adjust the government’s cross-strait policy? Will there be a change to the thinking that would leave Taiwan’s economy completely dependent on China?
If this distorted thinking is not thoroughly revised, we cannot see how the new Cabinet could usher in a wind of change and save Taiwan from suffering tremendous damage.
Pouring old wine into new bottles only deals with the manifestation of a problem, not the problem itself, so there is no reason for long-suffering Taiwanese to believe that this “remedy” will have any effect.
Appointing a new Cabinet when the president retains all decision-making powers means that nothing will change. With the cause of a sickness still in place, there will be no new medicine.
The government has two main afflictions: The economy and the cross-strait situation. Both are on the verge of becoming terminal.
On the economy, some indicators have improved.
The stock market index and the real estate market have improved slightly, but that is because interest rates are too low. The low cost of capital has created excess idle funds that have moved into financial markets, and this is the reason for the rising stock market and increasing real estate prices. It is, in fact, a bubble economy of sorts.
But there are deteriorating indicators, too: Unemployment for July reached a record high of 6.07 percent, and growth in the first quarter of the year fell to an unprecedented minus 10.13 percent. Further, exports for the first half fell by 32.1 percent and taxes for the January to August period were NT$205.3 billion below target, the highest figure for uncollected taxes for that period in any year.
These data again show that the economy has showed no signs of improving since the beginning of the financial crisis last year.
The stock market is a money game. A rising stock market offers a bit of pie in the sky; it doesn’t necessarily mean the economy is on the way back. For that to happen, the seeds of growth must first be planted in fertile soil.
To save the economy, the government must come up with ways of rewarding business investment.
It should offer tax and land benefits to companies that remain in Taiwan and hire local labor, and develop policies aimed at nursing industry in general, not just those that meet temporary political needs.
The high-tech industry has enjoyed tax deductions and exemptions — but it has still moved much of its operations to China. Meanwhile, traditional industries that provide most of the nation’s jobs must take on an extra tax burden. Future policy aimed at helping industry should make Taiwan’s interests its first priority rather than focus on a selected few.
Businesses that create jobs should receive benefits. Most important, the goal should be to create a complete industrial chain in which neither up, mid or downstream companies will find it advantageous to move overseas. This is the only way to create a cluster effect that strengthens competitiveness.
The fact is that when it comes to revitalizing Taiwan’s economy, the public can exert influence on which government policies are put in place. What it cannot do is dictate the vitality of global economic development. In this context, the Taiwanese and Chinese economies are competitors, not partners.
Pinning Taiwan’s hopes of economic development on China is a mistake. Cross-strait policies built on this poorly developed idea will only put Taiwan on the road to oblivion.
The members of the new Cabinet are clearly tools for the implementation of Ma’s unification policy.
With these people at the helm, it will be impossible to come up with a new strategy to find a way out for the economy. Such a government is unworthy of the hopes and expectations of the nation’s voters.
TRANSLATED BY PERRY SVENSSON
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