Sun, Jan 03, 2010 - Page 8 News List

THE LIBERTY TIMES EDITORIAL: Putting the economy in perspective

The people of Taiwan are still suffering the effects of the global financial crisis with unemployment rates rising and salaries shrinking. Yet President Ma Ying-jeou’s (馬英九) government announced that the monitoring indicators for Taiwan’s national economic climate are now “yellow-red” (or “slightly overheating”), with the total score for the index rising to 37 points last month, the highest in five years. The Ma administration’s poor governance means it has failed to improve living standards, yet it remains confident of its performance. We don’t know whether to laugh or cry when the government cheats the public by giving it a Christmas “present” in the form of news about “yellow-red” economic indicators.

With all industries affected by the sluggish economy and the public having a hard time making ends meet, it is outlandish to declare that the index for the nation’s economic climate is “yellow-red,” just one step away from a “red” light, which represents economic overheating. Despite its inability to inject life into the economy, the government says economic data are improving.

Because the data are so ludicrous and removed from reality, not even government officials dare back these figures. Hung Jui-bin, (洪瑞彬) director-general of the Council for Economic Planning and Development’s economic research department, said that Taiwan’s economy was at its lowest last year, but that because of the lower value for the same period a year earlier, all that is clear is that we are now seeing a recovery from a plunge, which cannot be interpreted as economic overheating.

This great leap in the nation’s economic indicators was mainly the result of customs-cleared exports and the industrial production index, which were negative in October last year. Because of the very low value figures for November 2008, however, these two areas saw double-digit growth last November.

These two areas contributed four points each to the economic index and this is what caused them to jump from “green” to “yellow-red.” The economic growth rate was a negative 7.1 percent in the fourth quarter of 2008, while the volume of exports fell 23 percent year-on-year in November 2008 and 41 percent the next month. It seemed as if the economy had fallen into an abyss. Now the economy has revived slightly, and although it is not much, it is naturally a great improvement over 2008. It is therefore delusional to raise the index to “yellow-red.”

No wonder the struggling public sees no sign of recovery.

The global economy is slowly starting to work its way out of the recession because major countries around the globe have injected large amounts of money into the capital market, despite the huge costs involved, to boost liquidity. But the recovery is weak because capital injections are not the same as an increase in production, sales and labor. No employment opportunities have been created and there has not been much effect on the consumer market. This is what is referred to as a “jobless recovery” that only benefits certain industries and a few social groups, increases the gap between rich and poor and exacerbates social tension.

The economic climate shows all these characteristics, with a “yellow-red” index being announced even though unemployment remains unresolved and industries are fighting to survive.

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