Government agencies continue to publish positive economic data, indicating that the nation’s economy is resilient, despite evidence of the slowing recovery in Japan and the advanced economies of the West.
The problematic thing from the Ma administration’s point of view is that most people take such figures with a pinch of salt because so few Taiwanese have actually felt the benefits of the recovering economy in their own lives.
On Monday, the Ministry of Economic Affairs said export orders last month grew 14.34 percent year-on-year to US$35.74 billion, the second-highest in history after the record US$35.98 billion set in September. It also said that exports could surpass US$405 billion this year to set a new record.
On Wednesday, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported that unemployment dropped to a two-year low of 4.73 percent last month and predicted unemployment would fall further this month, given the sustained recovery in domestic demand.
Then on Thursday, the ministry reported that the industrial output index set yet another record high last month, rising 19.37 percent from a year earlier to 130.34 points, while commercial sales rose 5.88 percent year-on-year to NT$1.17 trillion, the fourth-highest monthly level in history.
At first glance it is hard not to be impressed by such statistics, but underneath the surface something worrying is going on. Despite the strong economic figures, the DGBAS’ latest statistics also showed that the average salary figure has yet to return to pre-recession levels. In the first 10 months of this year, it was NT$36,205, compared with NT$36,600 over the same period in 2008, never mind that about 2 million people in Taiwan earn less than NT$20,000 a month.
The problems of stagnant wages and the overconcentration of wealth have worsened, not improved, over the past few years, deterring many people from getting married, having children or even daring to dream of buying a home at a time when housing prices continue to rise precipitously in several major cities. A house in Taipei City now costs about 11 years of household income, while one in “New Taipei City” (the upgraded Taipei County) costs an average of 8.9 years of household income, according to the latest data released by the Ministry of the Interior’s Construction and Planning Agency on Thursday.
If we recall government propaganda about the Economic Cooperation Framework Agreement (ECFA) with China, one key component was greater business opportunities for Taiwanese companies, but even here there is a question mark.
Based on the ministry’s own data, the model of triangular trade — in which exporters receive orders in Taiwan but produce goods in offshore plants — has become much more ingrained, increasing the likelihood that Taiwanese companies might relocate to China.
Last month, a record 50.95 percent of all export orders received by local businesses were produced overseas. In this situation businesses are making profits through lower costs abroad, but their Taiwanese employees are seeing fewer jobs and lower if any increases in wages.
An Academia Sinica researcher said on Thursday that stagnant wages, rising triangular trade and an unfair tax system were the main reasons people are not seeing the fruits of economic growth.
What the researcher did not say was that the economic recovery is not likely to significantly improve stagnant wages any time soon, while the model of triangular trade continues and tax reform remains on the drawing board. What the researcher also failed to say was that despite seemingly impressive growth figures, the reality of the recovery up close has left the majority of Taiwanese with nothing to cheer about.
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