All three arrows of Abenomics have now been fired and only by flying together will they hit their targets. Building a more business-friendly environment is a key theme of Abenomics. If businesses fail to innovate and grow, it will be impossible to stimulate the economy and the Japanese New Deal will lose its sustaining motive force.
With fresh economic policies cooking on a high flame, it looks as though Japan’s economy is starting to heat up. By contrast, the 13 measures proposed by the Cabinet to rejuvenate the Taiwanese economy at the end of last month, which involve investing NT$3.24 billion (US$109 million) over five years, are widely viewed as a “cold dish.”
In the face of waning national competitiveness and a weakening capacity for innovation, Taiwan’s financial and economic officials need to, as Nobel Prize-winning economist Daniel Kahneman put it, be “thinking, fast and slow” about how to promote a policy package that is both visionary and effective, rather than employing start-stop piecemeal policies whose effects cancel each other out.
Only by achieving this will the nation’s business sector and the public be able to stop worrying about the deteriorating situation and only then will Taiwan have a chance of progressing from having a miserable economy to an upbeat, strong one.
Leonard Wang is a professor in the Department of Applied Economics at the National University of Kaohsiung.
Translated by Julian Clegg