The Cabinet last week passed a four-year national development plan which aims to achieve average GDP growth of between 2.8 percent and 3.6 percent from next year to 2028 and increase GDP per capita from US$39,105 to US$42,787 over the same period.
The National Development Council said the government was confident of achieving the goal.
Taiwan could even catch up with Israel — which ranks 14th globally with a GDP per capita of US$55,535 — after surpassing the GDP per capita of Japan and South Korea, it said.
The most critical factors affecting GDP per capita are, assuming that the population remains unchanged, a country’s currency exchange rate and economic growth rate. The persistent rise in Taiwan’s GDP per capita in recent years reflects steady growth in the country’s economy and the local currency better maintaining its value in US dollar terms when compared with other countries.
For Taiwan to continue its growth and maintain its advantage over other regional economies, the country must maintain strong economic fundamentals and avoid uncertainties that might trigger capital flight and negatively affect exchange rates and economic growth.
The nation must also take advantage of technological innovations to increase productivity in traditional and service industries.
It should also achieve net zero carbon emissions to enhance the nation’s competitiveness.
The country’s economic success is built upon the thriving semiconductor industry, which feeds an insatiable global market for the most advanced chips for cars, 5G telecoms, smart devices and artificial intelligence applications.
Most of Taiwan’s export growth is from the information and communications technology (ICT) sector, with little from textiles, machinery, agriculture or other traditional manufacturing and service sectors.
While workers in the ICT industries have received increasing salaries and big year-end bonuses, their peers in other industries continue to face wage stagnation, which has persisted since 2000.
Those working in non-ICT jobs have little reason to celebrate the news that Taiwan’s GDP per capita might surpass that of Japan and South Korea.
This uneven industrial development has resulted in a few tech firms taking center stage in the economy, while the traditional manufacturing and services sectors (excluding financial firms) face continued income inequality due to limited wage growth.
In addition to raising the minimum wage, the government must assist non-tech manufacturing and service sectors in digital transformation and production upgrades, as combined they account for nearly 87 percent of the nation’s employment.
The growth in the nation’s GDP per capita is not too much of a cause for celebration, given that the fruits of the increase have been so unequally distributed among workers. The major beneficiaries have been shareholders.
According to the latest government statistics, the total labor compensation has consistently grown since 2012, but the ratio of labor compensation to GDP dropped from 45.77 percent in 2012 to 43.07 percent in 2021, a new low, while the ratio of corporate profits to GDP increased from 31.82 percent in 2012 to 36.41 percent in 2021, a new high.
Amid changes in the industrial structure, production model and employment dynamics, shareholders’ share of the benefits of Taiwan’s economic growth has gradually increased over the past 10 years or so, while workers’ share has steadily decreased.
Therefore, the government must look beyond the seemingly satisfying GDP statistics and produce policy incentives which encourage corporations to share more of their profits with workers.
This would help lessen the public’s growing sense of relative deprivation.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
RSS