The president’s to-do list
Presidents are often forced to react to events. An effective president can capitalize on these events and build a reputation for being a shrewd leader. However, failure to respond appropriately exposes a leader’s shortfalls.
The fear is that President Ma Ying-jeou (馬英九) will achieve little in his second term. The Legislative Yuan is likely to remain in political gridlock. Although the Chinese Nationalist Party (KMT) has a majority in the legislature, Ma does not appear to have full reign of his party. As Ma will step down in 2016, KMT lawmakers have to secure their interests, which are not necessarily aligned with Ma’s.
To achieve more, Ma needs to push the following agendas:
The capital gains tax on securities transactions. If necessary, Ma needs to press the KMT to pass its version of the bill. Sure, the KMT and Ma may be construed as unyielding; however, any delay may stop the stock exchange from exceeding 8,500 points.
If passing the KMT’s bill results in a favorable outcome, Ma can take the credit.
Second, Ma should articulate a concrete economic blueprint on the currency, the Economic Cooperation Framework Agreement (ECFA) and business regulations.
The devaluing of the yen has, in the short term, boosted Japan’s economic growth and the Nikkei.
Whether such an inflationary policy is an appropriate measure merits further observation. However, the public can identify with such a policy, which can be translated into concrete action. Ma needs to abandon his government’s flowery language and embellishments.
As Taiwan is an export-oriented country, the government should re-evaluate the current exchange rate. This entails reviewing the cost-benefit analysis of each specific industry in Taiwan.
It has been three years since the signing of the ECFA. The government should apprise the public of its benefits and shortfalls.
Although China is Taiwan’s largest trading partner, Taiwan must seek to secure its own economic interests, understand the trajectory of the economic relationship and prepare contingency plans.
Lastly, Ma should engage a committee to review and revamp Taiwan’s business regulations. This is an overhaul, but a necessary project. The International Institute for Management Development has lowered Taiwan’s global competitiveness ranking this year to 11th place. Reasons given for the drop are tighter business legislation compared with other countries and decreasing productivity. Although the nation should not simply undergo liberalization at the expense of people’s livelihoods, the government needs to explore areas that can make the island more investor-friendly.
Of course Ma needs the support of all parties. He needs to invite opposition party leaders to engage in high-level talks to jointly iron out what they can work on.