An official said yesterday that the difference between the average income of the richest 20 percent of the population and the poorest 20 percent has been steadily declining from 651 percent four years ago, and that it is estimated to drop to below 600 percent this year.
Hu Sheng-cheng (胡勝正), chairman of the Council for Economic Planning and Development (CEPD), was refuting some business leaders and academics' pessimistic views that Taiwan's economy and wealth distribution have not been doing well over the past few years and that the prospects may not be encouraging, either.
Gary Wang (王令麟), chairman of the General Chamber of Commerce (商總), pointed out that Taiwan's per capita GDP, at US$14,000, lags behind that of South Korea, which is at US$17,000, and is much lower than Hong Kong's US$27,000 and Singapore's US$24,000. So Taiwan has become the lowest-income country among the four "Asian tigers," he noted.
Wu Chung-shu (吳中書), an economist at Academia Sinica, said that income distribution in Taiwan has actually gotten worse as a result of the poor performance of the economy over the past few years. Rich people have continued to be able to make money, while many working people lost their jobs or became poorer.
But Hu dismissed these two observations because of "sampling" problems. To counter these defective samplings, Hu pointed to department stores' anniversary sales promotions, claiming that shoppers have been swarming into department stores on weekends because they can afford high-end products.
As to Taiwan's poor ranking among the Four Asian tigers in terms of per capita income, Hu said that one should look at per capita income calculated with "purchasing power parity" (PPP) to obtain a more accurate comparison of the living standards of people in different countries.
Such a method compares the actual buying power of people in different countries, by comparing the cost of a "basket" of goods.
Hu cited the International Monetary Fund's statistics from 2003, which show that Taiwan's average PPP was US$24,588, far ahead of South Korea's US$17,900, indicating that Taiwan enjoys a higher standard of living than South Korea.
Hu also dismissed as "incorrect" comparisons of Taiwan's economy with those of Hong Kong and Singapore, which he said are "city economies" that have a much smaller scale.
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