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.
A gap appears to be emerging between Washington’s foreign policy elites and the broader American public on how the United States should respond to China’s rise. From my vantage working at a think tank in Washington, DC, and through regular travel around the United States, I increasingly experience two distinct discussions. This divergence — between America’s elite hawkishness and public caution — may become one of the least appreciated and most consequential external factors influencing Taiwan’s security environment in the years ahead. Within the American policy community, the dominant view of China has grown unmistakably tough. Many members of Congress, as
The Hong Kong government on Monday gazetted sweeping amendments to the implementation rules of Article 43 of its National Security Law. There was no legislative debate, no public consultation and no transition period. By the time the ink dried on the gazette, the new powers were already in force. This move effectively bypassed Hong Kong’s Legislative Council. The rules were enacted by the Hong Kong chief executive, in conjunction with the Committee for Safeguarding National Security — a body shielded from judicial review and accountable only to Beijing. What is presented as “procedural refinement” is, in substance, a shift away from
The shifting geopolitical tectonic plates of this year have placed Beijing in a profound strategic dilemma. As Chinese President Xi Jinping (習近平) prepares for a high-stakes summit with US President Donald Trump, the traditional power dynamics of the China-Japan-US triangle have been destabilized by the diplomatic success of Japanese Prime Minister Sanae Takaichi in Washington. For the Chinese leadership, the anxiety is two-fold: There is a visceral fear of being encircled by a hardened security alliance, and a secondary risk of being left in a vulnerable position by a transactional deal between Washington and Tokyo that might inadvertently empower Japan
After declaring Iran’s military “gone,” US President Donald Trump appealed to the UK, France, Japan and South Korea — as well as China, Iran’s strategic partner — to send minesweepers and naval forces to reopen the Strait of Hormuz. When allies balked, the request turned into a warning: NATO would face “a very bad” future if it refused. The prevailing wisdom is that Trump faces a credibility problem: having spent years insulting allies, he finds they would not rally when he needs them. That is true, but superficial, as though a structural collapse could be caused by wounded feelings. Something
RSS