The first half of the year has come and gone almost without a trace, but we still have no clue if the economy will start to rebound this quarter after struggling through the first two quarters.
The continued uncertainties in the global economy underlined by the European debt crisis, the US’ weak economic recovery and slowing growth in China have resulted in worse-than-expected export growth for Taiwan over the past six months, and consumers have responded by becoming conservative about their spending. Consequently, some economic research institutes have lowered their GDP growth forecast for the nation to below 3 percent this year, and the Directorate-General of Budget, Accounting and Statistics is likely to follow suit when it updates its forecast at the end of this month.
Meanwhile, several executives of local technology companies have taken note of Samsung Electronics Co’s aggressive business expansion and South Korea’s model of economic development, suggesting that Taiwan should learn from Seoul’s firm support of domestic industries and its ambition to secure free-trade agreements with other countries.
The United Daily News Group last week organized a financial and economic forum, where business leaders, industry professionals and academics shared their concerns about the nation’s economic prospects and warned against irresponsible partisan politics and a directionless government that is liable to sacrifice the nation’s competitive edge and long-term prosperity.
Unfortunately, in today’s Taiwan, if you are so naive as to believe that the government and legislators can understand the nation’s development woes and figure out what to do about the economy, more fool you. Moreover, if you should ever have doubts about the nation’s long-term goals of free trade and economic liberalization, do not expect the government to be solely responsible for this matter, because the nation as a whole — including its people and businesses — is not yet ready for this move, despite the concerns about Taiwan’s over-reliance on the Chinese economy.
There is no doubt that some small industries, especially in the agricultural sector, would get hurt in the nation’s pursuit of further trade liberalization — either from the Economic Cooperation Framework Agreement that Taiwan signed two years ago with China or the free-trade talks the nation is conducting with other countries. Indeed, some will benefit from the trade liberalization process and others will have to pay for it. However, it is the public’s fear of the impact of overall trade liberalization and the government’s populist policies toward certain industries that prevent the nation from becoming a key base of services operations and manufacturing.
Make no mistake, income inequality and poverty exist in Taiwan and the nation’s capitalist market economy does need some fixing, but we should not compromise a belief in seeking a freer market and a society where people can care about the ethics of commerce such as fair trade and trade justice.
To get rid of protectionist sentiment and fears about trade liberalization, governments around the world have worked hard to strengthen their people’s sense of identity with the global community. Many have also taken pre-emptive measures to help upgrade their industries and address changes in their job markets, which is a painful and time-consuming process.