President Ma Ying-jeou (馬英九) yesterday promised to make necessary adjustments and improve the economy by seeking economic cooperation with more countries.
“We survived the global financial crisis four years ago. This time, we are facing a bigger challenge, with harsh economic conditions around the world. However, with Taiwan’s innovation and energy, the government will make adjustments and improve the local economy step by step,” he said at a meeting of the Chinese Nationalist Party’s (KMT) Central Standing Committee.
As the nation continued to suffer from a slowing economy, the committee discussed the economic outlook and possible solutions.
According to a report presented by Council of Economic Planning and Development Minister Yiin Chii-ming (尹啟銘) the European debt crisis has caused an 18 percent decline in export growth since last year, with the nation’s GDP growth forecast cut to 1.66 percent recently.
Ma, who doubles as KMT chairman, blamed the economic difficulties on the global financial crisis, while insisting that the government would not depend too much on China for economic growth.
“The two sides across the Taiwan Strait should improve cross-strait relations and deepen our economic and trade relations. However, we cannot put all our eggs in one basket,” he said.
Taiwan’s exports to China and Hong Kong accounted for 40 percent of its exports in 2008. The figure will be below 40 percent this year, Ma said.
“Some people wonder why our exports to mainland China did not grow after we signed the cross-strait Economic Cooperation Framework Agreement [ECFA]. It is because that we did not plan to depend on the mainland too much and we are looking for other opportunities, such as financial markets in Muslim countries,” he said.
In related news, the People First Party (PFP) suggested raising the debt ceiling to meet the financial needs of municipal cities either upgraded from county status or enlarged to incorporate other counties in the rezoning plan that took effect in December 2010.
Under the Public Debt Act (公共債務法), the total outstanding public debt at all levels of government must not exceed 48 percent of the average GNP of the previous three years, with the debt of local governments capped at 8 percent and the central government at 40 percent.
At a press conference held yesterday, the PFP suggested raising the debt ceiling to 60 percent of the average GDP for the previous three years, with a ceiling of 10 percent for local governments and 50 percent for the central government.
The revision could enable Greater Taichung to accrue about NT$5 billion (US$166.9 million) of additional debt a year, PFP Legislator Thomas Lee (李桐豪) said.
Last week, Taichung Mayor Jason Hu (胡志強) of the KMT appealed to the Ma government to relax the debt ceiling because he said making Greater Taichung subject to the debt limit was like “a junior-high school student wearing the pants they wore in elementary school.”
Hu’s request was the latest appeal against the current debt and budget rules that have been described as “outdated” by politicians across party lines following the rezoning.
The rezoning also saw the merger of the former Kaohsiung city and county into Greater Kaohsiung, the upgrade of the former Taipei County to New Taipei City (新北市) and the merger of former Tainan city and county into Greater Tainan, becoming the five municipalities, along with Taipei.
Lee said the government was already approaching the debt limit, with its outstanding loans climbing to an all-time high of NT$5.235 trillion at the end of June, up from NT$4.54 trillion at the end of last year, excluding short-term debts, deferred payments and debt accrued from non-profit government funds.