To recreate the nation’s “economic miracle,” President Ma Ying-jeou (馬英九) said yesterday that his government would increase the National Development Fund to NT$1 trillion (US$31.25 billion) and use the money to invest in the “2.5 industry,” a business straddling the manufacturing and service sectors.
“When we are able to reduce the external risk, we are much more able to create maybe a new miracle for Taiwan’s economy,” Ma said in English while addressing an international forum on capital venture at the International Convention Center in Taipei.
Ma said the rapid decline in the country’s manufacturing industry was a serious matter. About 20 years ago, Ma said the manufacturing industry represented 40 percent of the total economy, but the figure has gone down to 22 percent, while in other countries such as South Korea and Singapore it accounts for about 30 percent.
“Certainly, we are very interested in developing our service industry, but the manufacturing industry continues to be the biggest providers [sic] of jobs in our economy,” he said. “So we hope in the future we could develop our manufacturing industry in the form of something between the secondary industry. People sometimes call it the ‘2.5 industry.’ It’s not second, it’s not third. It’s in-between. It’s a very professional service industry between manufacturing and service.”
Ma said the government would augment the National Development Fund from NT$200 billion to NT$1 trillion, adding that the money would be invested in strategic industries. The “2.5 industry” would be the potential target, he said.
Ma said the country had felt the pinch of the global economic downturn and that its economic growth rate had slowed in the third quarter.
The current quarter and the first quarter of next year are expected to see negative growth, he said.
“But we are relatively confident that we would make a comeback sometime [in] the latter part of next year,” he said. “We are pretty confident that the fundamentals of our economy remain sound. Our foreign exchange reserve stands at US$280 billion. The most important thing is that we have very little foreign debt.”
Among the government plans to stimulate the economy, Ma said the infrastructure construction project package aimed at increasing domestic demand and the distribution of the NT$3,600 in consumer vouchers is estimated to boost the GDP by 0.64 percent next year.
They are also mapping out a new proposal, dubbed “forward-looking domestic market,” he said, with the object of creating a better environment for industries of mobile and wireless communications and new-generation display technology.
Ma said “how the greater Chinese area in this part of the world performs” will be important.
“I’m sure with our efforts that I described above, we will be able to get us out of this situation next year, hoping to create another economic boom,” he said. “But I know we still have a long way to go and many battles to fight.”
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