Tue, Mar 06, 2001 - Page 1 News List

Veteran economist aims to boost ailing economy

By Patrick Kearns  /  STAFF REPORTER

The appointment of veteran economist Hu Cheng-sheng (胡勝正) as minister without portfolio yesterday gives the minor Cabinet reshuffle a dose of economic clout.

But as director of Academia Sinica's economic institute, Hu faces an uphill battlefield strewn with economic landmines.

For starts, unemployment is at a 15-year high, international demand for Taiwan's export products is sliding and the domestic investment environment continues to deteriorate as the high-tech sector seeks greener pastures in China.

But one government watcher says that even with the addition of Hu -- a strong economic theorist -- he can achieve little on his own.

"He faces a very tough battle because he can't do the whole job by himself. He needs a strong team but the [economic] team is not functioning well," said Norman Yin (殷乃平), an economics professor at National Chengchi University.

"We can't put too much faith on one man's ability to deal with the economic problems the country is facing."

But Hu told the Taipei Times by phone yesterday that he was up to the task.

"I will do my best to help the premier improve the economy," Hu said. "While I am still unclear how I will assist the Cabinet, I believe the premier will probably have me focus on macroeconomics and monetary issues. But I won't know until Wednesday when I meet the premier and receive my instructions."

Hu, who served as an economics professor at Indiana's Purdue University from 1968 to 1996, returned to Taiwan to work for Academia Sinica in 1996. He received his PhD in 1967 in economics from the University of Rochester, New York.

Yesterday's reshuffle by Premier Chang Chun-hsiung (張俊雄) comes in response to calls for the government to bolster an economy in desperate need of resuscitation.

Hu said that the trouble in the banking sector and monetary policymaking would top his list of priorities.

"The first issue is to reduce the ratio of non-performing loans, and the second is to improve information transparency in the monetary system," Hu said. "We have to focus on these to improve the credibility of the financial system."

Hu also said mapping out both a short- and long-term economic plan was the key to tackling both the economic slowdown and rising unemployment.

"We can resolve the two problems together by, in the short term, expanding domestic demand to increase employment and, in the long-term, by transforming our economic structure," Hu said.

According to Hu, he will also help coordinate economic-policymaking -- an area pundits say the Cabinet is weak in.

"I will be working closely with [the Ministries of Finance, Economic Affairs and the Council for Economic Planning and Development] to coordinate economic policymaking," Hu said.

But while Yin agreed that coordination was a priority, he said obtaining the cooperation of economic officials would prove to be a formidable task.

"Since economic officials have done little coordination in policymaking in the past 10 months, the public should not expect too much from them now" following Hu's appointment, Yin said.

"Economic and finance officials prefer to "blow their own horns," Yin said.

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