Long lines at department stores in Taipei’s bustling downtown area around Mother’s Day used to be a good way to verify soaring retail growth, but this year — regardless of the deep discounts being offered by cash-strapped shops — trade is much slower.
Empty shopping malls mean that Mother’s Day this year could be the toughest season that retailers have seen since the 2008-2009 financial meltdown, with consumers tightening their belts amid escalating consumer prices and stagnating wages.
Some people may say that a 9 percent electricity rate hike, or an additional NT$24 per month on the average household bill this summer, alongside the cancelation of fuel subsidies, will not significantly impact average households. However, as prices for food, transportation and other bare essentials are also increased, consumers are beginning to feel the domino effect of higher fuel and electricity charges.
In addition, dismal projections for consumer prices further weakens the willingness to spend. A forecast by the Directorate-General of Budget, Accounting and Statistics (DGBAS) has shown that inflation is set to increase by 1.94 percent this year, but any natural disasters — such as typhoons that usually hit in the summer and fall — will push prices even higher.
Taiwan’s meager economic growth this year also adds to people’s suffering, with slower GDP growth potentially leading to payroll declines and a bleak job market. GDP is expected to expand at a slower annual rate of 3.38 percent, rather than 3.85 percent, DGBAS said earlier this year, blaming weak export growth and a private consumption slow-down.
The arrival of stagflation — the coexistence of high inflation and low GDP growth — is likely to further add to the nation’s Misery Index (the result of consumer price increases plus the jobless rate), which was at 5.61 percent last month. (In 2008, the index spiked to 7.67 percent, the highest since the 1981 global oil crisis, which prompted an increase in fuel and electricity prices).
In 2009, during the peak of the global financial crisis, Taiwan’s GDP nosedived to minus 1.81 percent, while consumer prices dipped to minus 0.87 percent. That meant people earned less, but they were under less pressure as the cost of living was also in decline.
More importantly, the government issued consumer vouchers of NT$3,600 per person in November 2008 in a bid to stimulate sluggish private consumption and weak growth. Although the policy only added between 0.3 and 0.5 percentage points to Taiwan’s GDP in 2009, lower than the government had estimated, it was at least an attempt to kick-start economic growth and to improve people’s lives.
Now, with a run-up of state deficit and state-run companies on the verge of imploding, the government is squeezing the public. In addition to hiking fuel and power rates, the government has also rushed to resume a capital gains tax on securities transactions in the name of building a fairer taxation system. The tax proposal, submitted in its final version to the Cabinet recently, has adversely affected the TAIEX.
Obviously, the public’s welfare is not ranked as highly as that of government officials.
Much-needed industrial reforms — an upgrade needed to add value to industries in low-margin manufacturing — has also been put aside. This decision will jeopardize Taiwan’s global economic robustness at a time when its trading competitors are gearing up to strengthen their technological capabilities and broaden their product lineup.
This has been reflected in the first-quarter GDP figures: Taiwan posted 0.36 percent annual economic growth for the last quarter, lagging behind South Korea’s 2.8 percent and Singapore’s 1.6 percent annual growth. The government should take this as a warning and refocus on boosting growth, rather than boosting prices and taxes through unacceptable means. The government needs to think things over before major social unrest unfolds.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations