It is perfectly normal for economic data to fluctuate and for the economic climate to go up and down.
However, in more cases than not, Taiwan’s real economic performance has been worse than expected and the downward revision of growth forecasts has become a routine occurrence.
This suggests that there is a problem with the fundamentals of the economy. Quite simply, it is an issue that cannot be ignored.
President Ma Ying-jeou (馬英九), however, continues to ignore economic warning signs.
Instead, he maintains an inflated opinion of himself and his government’s achievements. Ma diverts attention to other matters or selectively releases information in an attempt to cover up the increasing risk of economic collapse.
Still, numbers speak louder than words. The nation’s economic growth forecast for this year has been revised downward from 3.59 percent to 2.4 percent, a drop of about 30 percent.
Last month, the Council for Economic Planning and Development’s economic monitoring indicators were at “yellow-blue” for the eighth consecutive month.
In addition, according to Switzerland’s International Institute for Management Development, Taiwan’s global competitiveness dropped from seventh to 11th place this year.
The nation’s constant downward spiral first reared its ugly head last year, but this was still not enough to wake up Ma, who has been seen dozing during important meetings.
Ma keeps claiming that economic growth in the first quarter of this year was the second-highest of the four Asian Tiger economies — that his government is doing better than any previous government.
Such comments, and the refusal to reflect on his performance, prove the commentators who say Ma is incapable of leading the nation to be right.
In the face of our current economic woes, Premier Jiang Yi-huah (江宜樺) recently rolled out the seventh short-term economic stimulus package since Ma took office. This time it involves spending NT$3.2 billion (US$106.9 million) to rescue the economy. Such a response clearly shows that the Ma administration is at its wits’ end.
Over the next three years, the economy will likely enter a period of prolonged sluggish growth.
The Ma administration’s seven economic stimulus packages have become successively smaller — from previously promising NT$500 billion to now offering a mere NT$3.2 billion. From expanding infrastructure and cutting unemployment rates to merely offering subsidies on gas containers and gas stoves during the warm season. They have lost all power to be of any use, except perhaps as the butt of jokes.
The main reason for this mess is the Ma government does not understand the need to save money. It wastes money and is corrupt to the core. In addition, it is incapable of reviving the economy as government revenue falls. It cannot increase spending and it does not understand the need to cut expenditure. Instead it ends up raising huge government debt.
In just five years, the Ma administration has raised more debt than its predecessor did in eight, and is now close to the legal upper debt limit.
This means it has no more funds for infrastructure or to expand internal demand. The NT$3.2 billion stimulus plan is laughable, like trying to end a drought with a few drops of water.
To save the economy, the government must move beyond focusing on trivialities and band aid solutions. It needs to see the bigger picture, get a grip on global economic trends and implement structural reform to reshape the economy.