On Feb. 19, National Development Council Minister Kuan Chung-ming (管中閔) told a radio station that there is no such thing as the Asian Tigers anymore. Although Kuan’s remarks were the result of his comparing national income per capita, he later extended this line of thinking by saying there are too many restrictions in Taiwan and that the economy is not sufficiently liberalized. It seems that he is intent on carrying out some major economic reforms, and one can only hope that the council, which has only just been established, will take him seriously and take action.
When Harvard University professor Ezra Vogel was asked whether he had misjudged the situation in his book Japan as Number One: Lessons for America, his clever answer was that he had talked about Japan “as” No. 1 and had not said that Japan “is” No. 1. In the same vein, the concept of the Asian Tigers — Taiwan, South Korea, Hong Kong and Singapore — was an idea used to refer to their potential, and it implied no guarantees that they would become “dragons.”
Becoming fixated on how great the nation once was and thinking that change is not necessary often becomes a major barrier to reform and a key to why progress is stunted.
It seems a long time since anyone talked about the Asian Tigers. Lately, there has been a lot of talk about the economic performance during the days of former premier Sun Yun-suan (孫運璿) and former economics minister Li Kwoh-ting (李國鼎). All the discussion has focused on comparing the present with the past, with a lot of criticism directed at how the nation now lacks policy direction.
Kuan’s remarks show that it is not that today’s finance officials do not know where the problem lies; but rather that they rarely come up with effective action. This is an important factor behind why Taiwanese have lost so much hope in President Ma Ying-jeou (馬英九) and his administration.
Every international economic model represents an attempt to propose a certain type of economic structure. The Asian Tigers concept refers to a model that leverages international division of labor and export-driven growth. The “BRIC economies” — Brazil, Russia, India and China — arose when the model was copied and put into practice by a few large economies. The international economic environment had changed quite some time earlier and so had the rules of the game. With the establishment of the WTO, no country can escape the trend toward globalization. Although Taiwan has joined the WTO, only a few high-tech companies have taken advantage of the wave of globalization.
Recently, when students asked me why Taiwan joined the WTO and why it needs to sign international trade agreements, it was shocking to discover that university students lack knowledge about globalization. Imagine how much less a person on the street would know about the current economic situation.
Joining the WTO is just the start. It is not like everything will be easy after that. Steady and gradual steps need to be taken toward removing trade barriers and the goal of free trade. It is saddening to realize that since 2000, it seems hardly anybody in Taiwan has been concerned with these issues.
When it comes to liberalization, some people will worry about incurring losses. What are called barriers do not only arise from international trade talks, they also emerge in local discussions. These are problems that the government needs to deal with by developing good policy.
First the Cabinet must come up with a plan, and then the legislature must cooperate. This is a depressing topic. Many believe that for the past two decades, Taiwan has been trapped by the fighting between political parties. The ruling party holds a legislative majority, but it is unable to promote its policies. It would seem that some people can never think outside the box, but perhaps Kuan’s comments can wake them up.
Thinking of Li Kuo-ting brings up the developments that have taken place in the high-tech industry over the past couple of decades. When the US ended diplomatic relations with the Republic of China, Li used his close friendships with technical experts from the US to establish technological consultancy services in Taiwan, which assisted the government to establish the direction of the high-tech industry.
After joining the WTO, consideration should have been given to the major systemic changes that were necessary. The nation should have expressed its determination to accept globalization. More than a decade has gone by and there is no place for regret. The government must come up with concrete action.
Liu Ruey-hua is chairman of the Department of Economics at National Tsing Hua University.
Translated by Drew Cameron
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