Taiwan’s economy is fundamentally sound despite the global economic crisis, although declining confidence is a problem, Vice President Vincent Siew (蕭萬長) said.
“Taiwan’s economy consists [of] the sound foundation of the manufacturing and service industries,” he said. “Liberalization and deregulation are the way to go and will only be conducive to future economic development.”
With the concerted effort of the government and private sectors, Siew said he believed the country would weather the economic crisis.
PHOTO: CHANG CHIA-MING, TAIPEI TIMES
Siew made the remarks while addressing the opening ceremony of the annual conference of the World Taiwanese Chambers of Commerce at the Grand Hotel yesterday morning.
Siew said President Ma Ying-jeou (馬英九) had originally planned to address the opening ceremony, but decided to sit at the National Disaster Response Center as Typhoon Jangmi wreaked havoc across the country.
Ma would address the closing ceremony today, Siew said.
Describing the world economy as experiencing a “financial typhoon and tsunami,” Siew said the global economic crisis had dealt a blow to the country’s export-based economy.
“Luckily, the administration realized its impact and adopted various measures to address the problem,” Siew said. “Some of the measures do not have immediate results, but others do.”
With imported inflation and surging commodity prices, not to mention the impact of the US subprime credit crunch and its financial plight, Siew said the local economy has suffered.
As confidence has declined sharply, Siew said, the government must address the problem.
“We are worried that confidence will continue to drop,” he said. “In the short term, declining confidence reflects on the stock market and the economic growth is bound to descend if public consumption and investment continue to wane.”
Siew said the administration should carefully tackle the financial problem and make sure that financial order is maintained and the capital market is healthy.
To tackle the problems, Siew said the administration has worked to stabilize commodity prices and increase domestic demand. While the price stabilization measures have yielded results, Siew said, it would take time for construction projects make their effect felt.
To stimulate public consumption, Siew said the administration had proposed a “468 project” to offer income subsidies of NT$46,800 for low and middle-income families. The initiative is estimated to benefit 450,000 families with monthly subsidies of NT$3,000 to NT$4,000, he said.
Siew said that the subsidies are not much, but they would help whip up the consumption market.
The administration has also proposed the “i-Taiwan 12 infrastructure projects” to spur the investment market, Siew said. Among the projects are an oil refinery that will cost an estimated NT$400 billion (US$12.5 billion) to NT$500 billion to build, a development project near high-speed rail stations with a price tag of NT$200 billion, a renovation and expansion of the Taiwan Taoyuan International Airport and the establishment of free-trade zones in Taichung Harbor and Kaohsiung Harbor.
“I believe these projects will have positive effects in the short, medium and long run,” he said.
In order to attract local and international investors to the 12 construction projects, Siew said the administration must create an environment that is conducive to investment, with measures meant to lower taxes and simplify government policies.
When the administration tries to equalize the rental tax with that of neighboring countries, Siew said, it must also make an equal effort to ensure that social justice is upheld.
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