Members of governmental financial think tanks have defined the Economic Cooperation Framework Agreement (ECFA) and the free economic pilot zones as Taiwan’s third wave of liberalization and reiterated that liberalization is beneficial to increasing the impetus for economic growth.
This thinking has been used as the foundation for a government blueprint for economic development and bringing about far-reaching service industry liberalization by establishing eight free economic pilot zones to revive the nation’s slack economy and reshape how Taiwanese industry is upgraded.
Is this Taiwan’s last chance, or does it represent the death throes of a dying economy?
Let us not concern ourselves with these questions for the time being. Let us also ignore whether the government will change its pro-capitalist policies.
However, what cannot be ignored is that for the past 30 years, the government’s economic and financial policies have been established on the ideas of “liberalization” and “globalization” that are part of an international system of the division of production.
As a result, government policy has become focused on the ups and downs of imports and exports, market share and the development of niche industries.
However, over the recent decade in which China’s economy has really taken off, quantitative data like this that is used by the Taiwanese government has come to posses no importance whatsoever.
First, economic growth rates measured by how many orders are taken here in Taiwan, but produced in China, can no longer create employment opportunities and pay for Taiwanese, as such rates did in the past.
Second, the integrated supply from China’s production chain has increased the speed of Taiwan’s brain drain, attracted professionals from all over the world and caused a drastic decline in research and development investment in domestic companies.
Third, Taiwan’s geographical proximity to a great power in terms of production, consumption and capital, the cross-strait tacit agreement that economic exchanges will be followed by political exchanges, the view that this should be aided by the ECFA and the idea that this should all help promote Taiwan’s domestic economy are too subjective.
Excessive reliance on a great power could mean that whenever that great power sneezes, smaller countries will catch a severe cold.
Taiwanese have had it tough for the past decade, with incomes falling back to what they were 16 years ago and household incomes becoming polarized.
In 2011, according to information from those who reported individual income tax, the difference between the average annual incomes of the poorest 5 percent of families and the wealthiest 5 percent was 96 times, whereas in 1998 the difference between these two groups was only 32 times.
The fast pace with which this gap is increasing shows that wealth is concentrated in the hands of a small minority and that the majority of income earners are unable to share the fruits of economic growth.
Even worse is the government’s use of land enclosures to manipulate land prices across Taiwan, which has caused increases in the cost of housing and goods in general, while the government’s reliance on tax policies to bring about a redistribution of income between different social classes has met with complete failure.
Therefore, if we look at the nature of this third wave of liberalization and want to bring that into what was talked about at the recent national affairs conference on economics and trade, we need to start from three areas: looking at where policy has gone wrong, revising targets and giving back to society.
First, when it comes to the five biggest industries designated for the eight free economic pilot zones, the government should offer an analysis of current production values, the number of people employed and the technology jointly created by academia and industry, rather than creating negative legislation like relaxation of legal regulations, tax cuts for foreigners and tax incentives and cuts for businesses.
Second, if the government wants to use the free economic pilot zones as a springboard for joining the proposed Trans-Pacific Partnership, then it should also make sure to establish high standards like following international benchmarks, implementing the three basic labor rights contained in the Labor Union Act (工會法) and other such laws, as well as paying for environmental and ecological protection within the free economic pilot zones.
Third, the government should determine the relationship between the profits of companies in the target industries and a “social feedback tax” system, while also at least increasing income tax for the financial industry.
Fourth, when it comes to the coexistence and balanced development of communications and cooperation between companies within and outside the free economic pilot zones aimed at maximizing the five service industries designated for the free economic pilot zones — smart logistics, international healthcare services, value-added agriculture, financial services and education innovation — the government should give the public straight answers as to whether these are good or bad things for the allocation of Taiwan’s domestic resources and for improving the value of domestic labor.
The government has basic functions and duties when it comes to ruling the nation.
Recently, various sectors of society made their concerns heard at the national affairs conference on economics and trade and reached a consensus which involves bringing about justice and solving the severe problems the younger generations have with employment and surviving in the modern day.
Since the government has already heard these opinions, what it must do now is come up with feasible policies and put them into practice.
Lai Hsiang-ling is the spokeswoman of Raging Citizens Act Now.
Translated by Drew Cameron
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry