Sat, Jan 02, 2010 - Page 3 News List

ANALYSIS: Wu’s ‘grassroots economy’ plan lacks substance: experts

INTERVENTION STRATEGY The premier’s economic revival plan is unlikely to have any real-world benefits and could make matters worse, academics and analysts said

By Shih Hsiu-chuan  /  STAFF REPORTER

After poring over the concept of a “grassroots economy” floated by Premier Wu Den-yih (吳敦義), academics and economists dismissed the notion as a slogan without substance.

Wu proposed government intervention to address three burning issues: the high unemployment rate, exorbitant housing prices and a widening poverty gap.

Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University, questioned Wu’s ability to deliver on his promises, saying “he lacks a complete and visionary set of economic policies to lessen the impact of integration of trade and investment in Taiwan and China.”

“Just three years ago, it was commonly agreed that South Korea was no a match for Taiwan” in terms of competition in international markets, Chiou said. “Today, no one dares to think this way.”

That was because when South Korean corporations began aggressively branching out in global markers, the Seoul government actively sought out free-trade deals with the US, the EU and Canada, he said.

Meanwhile, Taiwan only has eyes for the Chinese market in its attempts to spur growth, Chiou said.

The government has used the removal of tariff barriers to ­highlight the importance of its proposed economic cooperation agreement framework (ECFA) with China, saying that the country would otherwise lose its competitive edge with Southeast Asian countries once a free-trade pact between China and ASEAN took effect yesterday.

Chiou said it would be “pathetic” if the only way the government could think of to boost the economy were to let businesses keep seeking lower-cost overseas production locations while resorting to small tariff reductions.

Everyone knows that the original equipment manufacturing and original design manufacturing models, which Taiwan used to establish itself as a vital global high-tech factory, have run up against new challenges in a changing global environment, and that the country now needs new strategies to restore its competitive edge, Chiou said.

Unless the government finds ways to upgrade industries from labor-intensive and efficiency-driven production to innovation-driven mode, it was unlikely to truly revive the economy and create jobs, he said.

Wu Hui-lin (吳惠林), a research fellow at the Chung-Hua Institution for Economic Research, said he has not seen any concrete evidence of Wu’s efforts to stimulate the economy at grassroots level, except for the premier asking the national statistics agency to come up with an index that can better reflect public perceptions of economic conditions.

The point of stimulating the so-called “grassroots economy” is not how economic indices are compiled, but whether the government can help the public understand its policy ideas so that people can determine if they are in the public interests before being put into action, Wu Hui-lin said.

Citing the controversial fourth phase of the Central Taiwan Science Park in Erlin Township (二林), Changhua County, as an example, Wu Hui-lin said the government never sought the public’s input on the expansion plan, instead imposing the plan on the community regardless of opposition.

The premier has been very proud of his Cabinet’s efficiency in implementing the expansion plan, but when the ground-­breaking ceremony was held on Dec. 26, hundreds of residents staged fierce protests over the possibility that the plant could contaminate farmlands in the surrounding area.

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