Infrastructure projects are public works that are typically large in scale, indivisible, capital-intensive and drawn-out. As a result, such projects cannot be provided by the private sector, as they require government funding.
Research has shown that infrastructure can improve a nation’s competitiveness and public well-being by increasing productivity, GDP growth and jobs. This is why new administrations often propose infrastructure projects in the hopes of fixing problems — especially when infrastructure is lacking and the cost of building it is low.
In Taiwan, there has been limited investment in infrastructure and, while the economy has seen little growth, wages have remained stagnant. Meanwhile, private bank savings have exceeded NT$30 trillion (US$992.4 billion) and interest rates in the capital market are less than 1 percent.
This is an appropriate time for President Tsai Ing-wen’s (蔡英文) Forward-looking Infrastructure Development Program, but why has the proposal met with so much criticism?
Many non-governmental organizations and academics have voiced concerns over the program. None have been entirely against the program, but rather critical of certain aspects.
Specifically, they have criticized it as having an unclear vision and objectives; flawed planning procedures; political bias and favoritism focusing too much on local infrastructure; low cost-effectiveness; and including infrastructure that does not reflect a “forward-looking spirit,” as well as a lack of public participation and a debt management plan.
Such criticism contains helpful suggestions to make the program better. The last thing the government should do is view its critics as enemies or troublemakers and completely disregard their opinions. After all, the Tsai administration has repeatedly stressed the importance of humility.
A look at the program’s national land use plan reveals several astonishing details.
First, there is no clear connection between the program and other regional or national land use plans. As a result, it is unclear how the program would affect the nation’s land use planning and land development strategies, and how it might contribute to the nation’s goals in terms of land use planning.
Second, the government has failed to take into consideration the full effect of the external costs of some of the program’s infrastructure projects in certain areas. These include the effect of “renewable” energy plans on agriculture and manufacturing; the effect of a reservoir construction project on the environment; the effect of water engineering plans on local ecology; and the social effects of land appropriation.
Third, the program has overlooked the ways in which different projects might be interchangeable or complementary, and how different effects, such as agglomeration or spillover, might take place within and across spatial networks. This has made it especially difficult to predict whether these projects will achieve their desired results.
Fourth, the program has disregarded the way its infrastructure projects have been prioritized over other infrastructure.
Meanwhile, the government’s unwillingness to consider public–private partnerships as a way to reward public participation in the infrastructure projects and reduce its debt will only aggravate the problem.
The Cabinet should revoke its proposal for the program and ask the National Development Council to work with civil groups and political parties, adopting the approach of a social planner that considers and adopts criticism and suggestions to ensure the best possible results for society.
Yang Chung-hsin is a retired Academia Sinica research fellow.
Translated by Tu Yu-an
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