President Ma Ying-jeou (馬英九) yesterday met Nobel Prize-winning economist Paul Krugman at the Presidential Office to seek advice on boosting the economy.
“We have seen the impressive performance of the local stock market over the past month but there is a slump in the export market and industrial production and the unemployment rate is rising,” Ma said prior to the meeting. “Although the decline has shown signs of slowing, the overall situation is still very bad.”
Ma said while Krugman had previously said that he was not optimistic about the economic prospects for Asia’s emerging economies, he would like to know whether the Nobel laureate was still of the same opinion.
Ma said his administration had adopted various measures to tackle the global financial crisis, but the economic downturn had dealt a significant blow to the country’s exports.
“It is not something we can control,” Ma said. “Obviously, we cannot solve all the problems, so we would like to get some advice from a master. What else can we do?”
As exports make up 64 percent of the country’s GDP, Ma said, the country’s economic growth bore the brunt of the impact when the export market contracted. Ma said although his administration had taken note of Krugman’s suggestion to boost public investment, it would take time to see the results.
Ma said the government had also issued consumer vouchers to stimulate public consumption, but this could not serve as a long-term measure.
“We would like to know how serious the situation we are facing is, how long it will take for America to see signs of recovery,” Ma said.
If markets in the US and Europe cannot recover their buying power, Ma said, he would like to know how Asian countries reliant on US and European markets should rein in the negative impact.
Krugman’s response to Ma was not known as the meeting was closed to the press after Ma delivered his speech.
Krugman also met with Premier Liu Chao-shiuan (劉兆玄), Vice Premier Paul Chiu (邱正雄) and other senior Cabinet members behind closed doors at the Executive Yuan later yesterday.
In his opening address to Cabinet officials, which was open to the media, Krugman said the global economic crisis was not something that could be resolved simply through will but through “understanding the nature of the problem” and “thinking hard.”
Governments and researchers should communicate on the problem, he said, adding that he was delighted to be in Taiwan to speak with the government and wished to help address the situation.
Liu told Krugman that he was impressed with his “insight” “vision” and “warnings” after reading the abstracts of Krugman’s speech at a forum on the global financial crisis yesterday morning.
Liu also expressed the hope that Krugman would offer the government some advice.
ADDITIONAL REPORTING BY SHIH HSIU-CHUAN
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