Deregulation and liberalization have been the focus for markets recently and the Cabinet is once again making a case that reform is necessary for long-term economic development. The government’s problem lies in its poor policy execution and inefficient bureaucracy, leaving it with a string of empty promises.
On Wednesday, Premier Jiang Yi-huah (江宜樺) finalized the government’s third-party payment policies at a Cabinet meeting, allowing non-bank payment processors to provide online transactions on behalf of merchants and consumers. Under the plan, non-banks will be allowed to provide third-party online payment services pursuant to the Act on Issuance and Management of Electronic Monetary Cards (電子票證發行管理條例), with the maximum amount allowed in online stored-value accounts set at NT$10,000 (US$334) each. Businesses offering such services must have at least NT$300 million in paid-in capital.
By the end of the year, the Financial Supervisory Commission (FSC), the Ministry of Economic Affairs and other government agencies will draw up new legislation and management guidelines for e-commerce and third-party payment services.
On Thursday, the Cabinet approved the Council for Economic Planning and Development’s proposal for establishing “free economic pilot zones” in Taiwan. With the planned deregulation in the flow of goods, talent and capital, the government aims to develop intelligent logistics, international medical services and value-added agriculture and industrial innovation centers in Taiwan. Other industries suitable for liberalization that have growth potential, such as financial services, will also be considered for inclusion in the zones in the future. The Cabinet’s next step is to enact a special law governing the zones, which will include large-scale deregulation measures and tax incentives, pending legislative approval.
In view of the underdeveloped service sector, the slow progress in industrial transformation and a lackluster track record in attracting foreign investment, the Cabinet’s plans for third-party payment services and pilot zones show policymakers’ desire to stimulate economic growth. The government has removed roadblocks to pursue the development and competitiveness of domestic financial services and electronic commerce providers through a partial Cabinet reshuffle, especially the removal of former FSC chairman Chen Yuh-chang (陳裕璋), who had been at odds with economy and technology officials over several issues.
As promising as the government’s plans are, proper execution of the plans remains a challenge. The government has not divulged much information about the contents of its policies, nor the operational conditions and complementary measures for companies. Businesses are wondering whether the government’s policies and the scope of deregulation are viable — that is, whether the Cabinet’s plans make sense.
There are complaints from e-commerce businesses that the ceiling of NT$10,000 for individual online stored-value accounts is too low. Also, there are worries that the pilot zones plan will be a privilege only a few businesses can enjoy, rather than being a platform allowing companies to upgrade their operations to provide high-end services on a level playing field.
It is understandable that the government aims to further the nation’s development through deregulation and liberalization at a time when the global and domestic economies remain weak. Taiwan does need reform policies and visionary plans to revitalize itself, but it also demands a government with more efficient civil servants, less red tape and a strong ability to implement policy.
A survey released by the German Trade Office Taipei last month warned that Taiwan is losing its competitive edge to China in terms of business friendliness and government efficiency. Personnel recruitment is posing the biggest challenge. Before the Cabinet can confidently voice optimism about its plans, it must solve its bureaucratic inefficiency.
Because much of what former US president Donald Trump says is unhinged and histrionic, it is tempting to dismiss all of it as bunk. Yet the potential future president has a populist knack for sounding alarums that resonate with the zeitgeist — for example, with growing anxiety about World War III and nuclear Armageddon. “We’re a failing nation,” Trump ranted during his US presidential debate against US Vice President Kamala Harris in one particularly meandering answer (the one that also recycled urban myths about immigrants eating cats). “And what, what’s going on here, you’re going to end up in World War
Earlier this month in Newsweek, President William Lai (賴清德) challenged the People’s Republic of China (PRC) to retake the territories lost to Russia in the 19th century rather than invade Taiwan. He stated: “If it is for the sake of territorial integrity, why doesn’t [the PRC] take back the lands occupied by Russia that were signed over in the treaty of Aigun?” This was a brilliant political move to finally state openly what many Chinese in both China and Taiwan have long been thinking about the lost territories in the Russian far east: The Russian far east should be “theirs.” Granted, Lai issued
On Tuesday, President William Lai (賴清德) met with a delegation from the Hoover Institution, a think tank based at Stanford University in California, to discuss strengthening US-Taiwan relations and enhancing peace and stability in the region. The delegation was led by James Ellis Jr, co-chair of the institution’s Taiwan in the Indo-Pacific Region project and former commander of the US Strategic Command. It also included former Australian minister for foreign affairs Marise Payne, influential US academics and other former policymakers. Think tank diplomacy is an important component of Taiwan’s efforts to maintain high-level dialogue with other nations with which it does
On Sept. 2, Elbridge Colby, former deputy assistant secretary of defense for strategy and force development, wrote an article for the Wall Street Journal called “The US and Taiwan Must Change Course” that defends his position that the US and Taiwan are not doing enough to deter the People’s Republic of China (PRC) from taking Taiwan. Colby is correct, of course: the US and Taiwan need to do a lot more or the PRC will invade Taiwan like Russia did against Ukraine. The US and Taiwan have failed to prepare properly to deter war. The blame must fall on politicians and policymakers