Though opposition lawmakers are threatening to oust the Cabinet if GDP growth slows below 5 percent or unemployment rises above 4 percent, the DPP government isn't to blame for the current economic downturn, analysts say.
Still, many in Taiwan believe that the country's economic troubles started only after the DPP came to power last year -- a perception that is false, the analysts said.
Taiwan's current downturn has more to do with slowing global demand for the nation's exports such as computers and microchips, and has little to do with the DPP's economic policy-making since President Chen Shui-bian (陳水扁) took the reins last May, they said.
"The KMT is taking advantage of the fact that this is the slowest quarter of the year during the worst economic downturn -- worldwide -- in ten years," said an analyst at a foreign research house who, like most foreign analysts, refused to be identified for fear of retribution.
"Economic policy takes time to implement, and even longer to have an impact on the business environment," the analyst noted.
If anything, the present state of the economy is a result of KMT polices -- not the DPP's. "The economy now is a result of KMT rule," he said.
Other analysts noted specifically the slowdown in the US economy, which has hurt demand for Taiwan exports.
Nothing paints a clearer picture of this connection than the nation's main stock index -- the TAIEX -- and its relation to the tech-heavy US NASDAQ market, which has dropped roughly 60 percent drop since peaking last year.
That drop is a reflection of slower earnings growth at US high-tech companies -- many of which import products from Taiwan firms.
The math is simple: reduced purchases by US firms of Taiwan products hurts the bottom lines of companies here, and in the long term will cost jobs and cut economic growth.
Yet the opposition says not only should Premier Chang Chun-hsiung (
But when it comes to the market, the numbers speak for themselves. The TAIEX shed 161.5 points, or 3 percent, to close at 5,244 yesterday on news that opposition legislators were moving forward with a proposed no-confidence vote against Chang and his Cabinet.
According to another foreign analyst who also requested anonymity, the attack on the Cabinet "was an important factor" in the drop. He added that a prolonged political battle would spell bad news for shares and could further drag stocks down.
The market watcher clearly tied Taiwan's troubles to the US economic slump, not the DPP's policies. "I think the majority of Taiwan's problem is the worldwide economic downturn," he said.
As a result of the global slowdown, Taiwan's GDP growth as forecasted by the IMF is expected to come in at 4.1 percent this year -- well below the 5 percent target set by opposition lawmakers.
But Taiwan isn't alone. All of Asia is expected to suffer from slower growth as the big US and European economies buy less from Asian exporter nations.
The IMF expects South Korea to have growth of 3.5 percent this year, down sharply from 8.8 percent last year. And in Thailand, Singapore and Malaysia it's much the same: economic growth is slowing as exports drop.
But market watchers agree the time was right to use poor economic figures for political gain.
"These are opportune times for the opposition to be pressing the government," the foreign analyst said.
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