Yet another item has been added to the long list of economic promises that have fallen through during President Ma Ying-jeou’s (馬英九) tenure. On May 24, the Directorate-General of Budget, Accounting and Statistics (DGBAS) cut its GDP growth forecast for Taiwan this year to 2.4 percent, down from its February estimate of 3.59 percent.
This is an official declaration of the government’s failure to keep annual growth above 3 percent. After pledging last year that the economy would grow by at least 4 percent, the government revised its forecast downward no fewer than nine times, to a promise of just 1 percent in the end.
Instead of taking time to reflect, the Ma administration did the same thing again by announcing a GDP growth target of 3.59 percent at the start of this year. Then Minister of the Council for Economic Planning and Development Kuan Chung-ming (管中閔) pushed the target even higher with his talk of achieving a “golden crossover” by raising growth above 4 percent while getting unemployment below 4 percent.
Who would have thought that, with Kuan’s words still ringing in the public’s ears, the forecast for first-quarter growth would tumble well below those figures, with no hope of achieving 3 percent growth for the whole year?
“It’s the economy, stupid” is a very apt commentary on Ma’s performance. After The Economist branded Ma a “bumbler” in November, it was not long before the word was on everyone’s lips. Economics is the weakest link in Ma’s governance, and the economy presents the biggest stumbling block for Taiwan’s development. The catchphrase: “It’s the economy, stupid” is an accurate description of this government’s incompetence and a strong hint about what, or who, is primarily responsible.
Nonetheless, Ma thinks he is doing a good job and prefers to blame others for the nation’s problems. Confronted with how unpopular he is, instead of looking in the mirror, he chastises the public for resisting reforms, and blames the nation’s dismal economy on the mess supposedly bequeathed to him by the previous administration.
Setting aside the rights and wrongs of Ma’s predecessor, Chen Shui-bian (陳水扁), in the second quarter of 2008, which is when Chen passed the baton to Ma, Taiwan’s annual growth rate stood at 5.66 percent, whereas the average growth rate since Ma came to power has stood at a mere 2.68 percent. Clearly, Taiwan’s economy has gone downhill under Ma’s tenure.
Nonetheless, Ma said in a recent interview that he has not given up on his “6-3-3” pledge to achieve 6 percent annual GDP growth, US$30,000 average per capita income and less than 3 percent unemployment by the end of his second term in 2016, and that he is still trying hard to achieve those targets.
However, considering that the average annual growth rate for Ma’s years in office so far stands below 3 percent, it seems unlikely that he can score above 9 percent growth for each of the next three years, which is what it would take to get an average of 6 percent. It seems that Ma and his government just cannot shake the habit of telling tall tales without so much as a blush.
The Ma administration’s biggest mistake has been leaning too heavily toward China and thinking of China as a panacea that can cure all ills. It is true that for a while China played the role of workshop of the world and many multinational corporations chose to locate their production bases there. However, with the rise of emerging and frontier markets over the last few years, many companies from advanced countries have moved their production bases elsewhere.