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.
Furthermore, unemployment is worse than it appears. According to official statistics, the unemployment rate in November shrank to 5.8 percent, but there is cause for skepticism. Investigations into unemployment by the Directorate-General of Budget, Accounting and Statistics are carried out according to International Labor Organization standards, but distortions often occur because of cultural differences, which means the real unemployment situation cannot be ascertained.
For example, many people who have been unemployed for a long time have withdrawn from the labor market, while others have not started looking for jobs yet. Some workers also receive hourly wages that are unacceptably low yet have not been included in the government’s narrow definition of unemployment. Also, because the investigation was carried out by way of home visits, many of the unemployed who live on the streets or have no fixed residence were not interviewed, while others are unwilling to admit that they are unemployed out of shame.
In addition, the 100,000 or so short-term job opportunities offered by the government mean that unemployment data are somewhat skewed.
The biggest culprit behind the nation’s economic woes is the Ma administration’s blind and stubborn promotion of its pro-China policies. The government has not improved the domestic investment environment, which has caused many businesses to leave Taiwan.
Instead, it has loosened all reasonable restrictions and removed safety vents, in effect forcing industries, technology and manpower to move to China and causing structural problems in industrial development and unemployment. Taiwanese businesses moving to China have taken with them funds, technology, experience and job opportunities; China-based Taiwanese businesses are exploiting cheap labor and low operating costs to compete with local Taiwanese industries and thus hurting Taiwan’s economy.
As long as the government’s pro-China policies are promoted, it will be impossible for the economy to pick up and unemployment will keep rising.
Most Taiwanese are already paying for the vicious cycle and negative impact caused by Taiwanese businesses moving to China. However, recent reports about the government allowing businesspeople to invest and set up factories there in high-tech industries such as panels, wafers and mid to high-level packaging and testing, make it clear that the Ma administration will continue on the wrong road until it is too late. It is determined to make the public suffer the consequences of its foolish actions on the road to eventual unification.
TRANSLATED BY DREW CAMERON
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