Since President Ma Ying-jeou (馬英九) took office, his administration has set the economy right at the top of its agenda. Against all odds, the GDP has risen, and is expected to grow by 8 percent this year. However, little of this is trickling down to the general public and the poverty gap has widened. According to the latest Cabinet figures, there is a 66-fold wealth disparity in Taiwan this year, an all-time high.
In 2008, those in the top 5 percent of the income pyramid enjoyed, on average, an annual income of NT$4.5 million (US$140,530). The bottom 5 percent only earned an average of NT$68,000. In 1998, the highest incomes were only 32 times more than the lowest.
Unemployment shot up as a result of the financial crisis and the salaries of those who managed to keep their jobs fell. Middle and low-income earners were hit badly, but the fat cats were left sitting pretty. Now that the economy is improving at an encouraging 8 percent rate, we are still not seeing a concomitant increase in salaries. To exacerbate the situation, commodity prices have been rising, pushing up the price of goods on the shelf. Middle and low-income workers are, therefore, being hit with a double whammy.
The culprit is evidently the triangular trade model in which orders are received in Taiwan and the goods manufactured in China. The percentage of trade carried out in this way has risen from 13 percent in 2000 to 50 percent in June this year. As a result, exporters and their shareholders, not the general public, are seeing the fruits of this economic growth. The poor struggle to make ends meet and the rich continue to get richer on the back of the labors of the poor.
This problem has been worsened by a big cut in inheritance, business and income taxes. Instead of investing the resulting surplus in productive industries, the rich have been speculating in real estate, pushing property prices higher. The cost of a home in Taipei City now equates to more than 11 years of salary for the average employee. People who don’t already own a home have no hope of ever owning one, and this hopelessness is fueling popular resentment.
A widening income gap has many undesirable results. It is generally accompanied by increasing disparity between regions, especially between urban and rural areas. These two factors chase one another, forming a vicious cycle. Second, upward mobility is slowed down or choked off completely. People with lower incomes despair of ever improving their lot. Such people feel trapped and exploited, leading eventually to grave social crises. The recent wave of resentment toward big business is a sign of this growing discontent.
One of the roles of government is to uphold social justice by distributing the fruits of economic development. The Ma administration stresses economic growth, but only the rich are gaining from it. Meanwhile, the middle and working classes are feeling increasingly exploited. Now that Taiwan and China have signed the Economic Cooperation Framework Agreement (ECFA), working people in Taiwan face even more direct competition from Chinese commodities and labor.
The government’s economic policies have just added fuel to the fire. The more the government pushes for economic growth, the more working people feel they are losing out relative to the wealthy minority. The income gap is creating an M-shaped society in which the middle class is eroding. The result is a loss of social cohesion and a breakdown of consensus that supports the existing social order. As the state loses its moral authority, we are likely to see growing discontent and social unrest. The ever-widening income gap will be an important issue in the November special municipality elections. If the Chinese Nationalist Party (KMT) government fails to deal with this issue, it could face a major upset at the polls.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
As Maldivian President Mohamed Muizzu’s party won by a landslide in Sunday’s parliamentary election, it is a good time to take another look at recent developments in the Maldivian foreign policy. While Muizzu has been promoting his “Maldives First” policy, the agenda seems to have lost sight of a number of factors. Contemporary Maldivian policy serves as a stark illustration of how a blend of missteps in public posturing, populist agendas and inattentive leadership can lead to diplomatic setbacks and damage a country’s long-term foreign policy priorities. Over the past few months, Maldivian foreign policy has entangled itself in playing
A group of Chinese Nationalist Party (KMT) lawmakers led by the party’s legislative caucus whip Fu Kun-chi (?) are to visit Beijing for four days this week, but some have questioned the timing and purpose of the visit, which demonstrates the KMT caucus’ increasing arrogance. Fu on Wednesday last week confirmed that following an invitation by Beijing, he would lead a group of lawmakers to China from Thursday to Sunday to discuss tourism and agricultural exports, but he refused to say whether they would meet with Chinese officials. That the visit is taking place during the legislative session and in the aftermath