Tue, Jan 08, 2013 - Page 8 News List

2012: The year faith was lost in Ma

By Lu Shih-hsiang 盧世祥

The year 2012 is over. It was an unbearable year for the people of Taiwan, and it all began with the election of the wrong president.

A re-elected president, a new Cabinet and a new legislature all took office at the beginning of the year, but over the year these government officials and elected representatives fell short of public expectations.

Taiwanese saw the economy take a dive, increasing public hardship, social unfairness, political corruption, Chinese intervention and the nation’s marginalization in the international community.

Although the world did not end on Dec. 21, an atmosphere of pessimism swept the nation in the face of all these crises.

Perhaps the economy and people’s living standards suffered most.

President Ma Ying-jeou (馬英九) said late last year that he could see the light at the end of the tunnel. It is no surprise to hear a president stress that things are looking good, but his remarks highlighted the fact that the nation’s economy had hit rock bottom.

How bad was the situation? Early last year, the Ma administration estimated the annual economic growth rate for the year to reach 4.58 percent, but that figure was adjusted downward nine times over the year: By the end of the year it was questionable if it would even reach 1 percent.

This performance was worst among not only the four Asian Tigers, but of all of the 12 major Asian countries.

Due to the economic downturn, the public suffered. Taiwan’s unemployment rate was the highest in East Asia and the average wage level fell back to the level of 14 years ago.

Both white and blue-collar workers were frustrated, and about 93 percent of white-collar workers wanted to find an extra job on the side.

Young Taiwanese were hardest hit, as unemployment among those in their 20s reached as high as 14 percent, while a low monthly salary of NT$22,000 (US$690) became the norm among those who did have a job.

What made those at the bottom even more miserable was that fuel and electricity prices were hiked in the spring, which caused a chain reaction of price hikes as public anticipation turned into a self-fulfilling prophecy, greatly increasing the daily expenses of wage earners.

In addition, both people who preferred to dine out and people who had their meals at home suffered from the impact of the strong push for US beef after the import ban was lifted.

After complaints from the public, the government spent several months before finally proposing a distorted version of the capital gains tax on securities transactions, which drew strong criticism from stock investors. Before the government had even profited from the new tax, it suffered from the reduction of the securities transaction tax.

Part of the reason for the economy’s dark prospects was the incompetence of those in power and the problematic industrial development mode.

Many Taiwanese companies invested in China in an effort to reduce costs and expand their scale, but the lack of innovation and the low profits of contract manufacturers meant that this strategy became unsustainable.

The reason for the economic slowdown, then, was not the economic cycle or external factors. Rather, it was a fundamental problem of development strategy. If adjustments are not made in a timely fashion and Taiwan continues to lean toward China, Ma’s claim that he sees the light at the end of the tunnel will simply be a deception to himself as well as everyone else.

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