Taipei Times: With government debt at NT$3 trillion and estimates saying it could balloon to NT$14 trillion, critics have said the six-year national development project is all show and no substance. Is it possible that the premier's dream of "challenging 2008" will fail because of the government's financial difficulties?
Ho Mei-yueh (
When we talk about the six-year project, we're talking about a project under a strictly conservative budget.
Assuming annual expenditure growth is 1.4 percent, the Executive Yuan is expected to spend NT$9.5 trillion over the next six years, or NT$1.5 trillion per year.
Even if there are additional disbursements resulting from new plans included in the project, it's estimated that it won't exceed more than NT$50 billion a year.
Besides, although it has been dubbed a NT$2.6 trillion project, just NT$1.2 trillion will come from government coffers while private investment will account for NT$900 billion.
In other words, the project accounts for just one eighth of the Cabinet's annual expenditures.
TT: So the government doesn't need to increase taxes to help fund the plan?
Ho: It's the last thing we want to do because the project is aimed at spurring the economy and creating a better investment environment.
Raising taxes will only reduce the effectiveness of the project. It's only to Taiwan's long-term advantage that the nation be a low-taxation state.
TT: One of the goals included in the project is to decrease unemployment from 5 percent to 4 percent. How does the Cabinet plan to reach this goal, as the unemployed in the agricultural sector alone is estimated to grow 16,000 annually now that Taiwan is a member of the WTO?
Ho: To decrease unemployment from 5 percent to 4 percent, we must create 700,000 new jobs. Take 2001, for example. About 17 million people were over the age of 15. While an average of 9.8 million people were looking for a job, about 9.3 million were employed and about 450,000 people were unemployed.
It's estimated that the population of people 15 years old or older will grow to 18 million by 2007. To keep the unemployed population at 400,000, the government must create 700,000 new jobs for the 10 million people who are looking for a job.
TT: Critics have said it wouldn't be difficult to reach the project's seven goals were the "three links" to be implemented. What are your thoughts on this?
Ho: Nobody is opposed to "three links." The problem is under what conditions should they be established?
I personally think that it would be very dangerous to establish direct links under the "one China" principle. Instead of seeing "three links" as the cure-all for Taiwan's economy, it would be a better idea to increase Taiwan's bargaining chips by increasing its competitiveness and finding its own niche in the global economy.
I believe Taiwan can play an important role in research and development and logistics. R&D doesn't have anything to do with "three links," while logistics does to some extent.
If you ask me whether Taiwan can play a significant role in the global economy without establishing "three links" with China, my answer would be "yes."
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