Opposition parties yesterday called for the resignation of Premier Sean Chen (陳冲), saying he had failed to come up with effective strategies to tackle the country’s economic problems.
The premier declined to respond when asked about the calls for him to step down, but addressed questions about a report published by a Hong Kong-based consultancy on Tuesday showing that Taiwan is lagging behind its Asian peers.
The report by Political & Economic Risk Consultancy Ltd ranked Taiwan last in a survey of 12 Asian countries based on their second-quarter GDP performance. Taiwan was the only one to post a contraction.
Photo: Chen Ching-min, Taipei Times
“It was not news” that the nation’s second-quarter GDP shrank 0.16 percent year-on-year, Chen said.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) already released the data in July — long before the Hong Kong company published the report, the premier said.
The release of the report prompted calls for a Cabinet reshuffle from the Democratic Progressive Party (DPP) and the People First Party (PFP), while Taiwan Solidarity Union (TSU) showed its reservations about the idea.
The DPP and the PFP also cited the spike in last month’s consumer prices as a factor.
Annual inflation last month rose to a four-year high of 3.42 percent, according to DGBAS figures released on Wednesday.
However, the premier blamed the increase on surging vegetable and fruit prices in the wake of the two typhoons that hit the country last month, adding that there was no typhoon in August last year.
He added that consumer prices in the first eight months of the year grew by “a relatively stable” 1.86 percent compared with a year ago.
However, critics also pointed to the latest Global Competitiveness Report released by the Geneva-based World Economic Forum on Wednesday, which showed that while Taiwan ranked 13th for the third year in a row, it dropped six notches in the “macroeconomic environment” category because of its deteriorating fiscal condition.
A string of economic data released earlier also underscored a slowdown, including a rising unemployment rate, falling exports and export orders and slowing manufacturing.
The nation’s composite index of leading economic indicators also flashed a “blue light” for the ninth straight month in July, signaling a recession.
“It was like the entire government has been in a coma in an intensive care unit,” DPP Legislator Pan Men-an (潘孟安) said, as he urged President Ma Ying-jeou (馬英九) to replace the premier with someone “who knows how to boost the economy.”
PFP caucus whip Thomas Lee (李桐豪) agreed, but added that a Cabinet reshuffle alone would not be enough to turn the economy around because “the Cabinet was fraught with problems.”
Chen let a “golden” opportunity to salvage the economy pass without crafting a short-term economic stimulus plan during the first legislative session, which ran from February to June, Lee said.
In December last year, Chen, then the vice premier, took over as acting premier when Wu Den-yih (吳敦義) left the post to run for vice president in the Jan. 14 presidential election.
After Ma won re-election, he appointed Chen as premier.
Chen could have tackled the nation’s economic and financial problems since signs of a downturn had emerged in September last year, Lee said.
Instead, Chen just followed orders from Ma to focus on issues such as easing the ban on imports of US beef containing the feed additive ractopamine, imposing a capital gains tax on securities transactions and raising fuel and electricity prices — which have only led to a further economic deterioration, Lee said.
TSU caucus whip Hsu Chun-hsin (許忠信) said that replacing Chen or a Cabinet reshuffle was not the solution to the grave economic and fiscal problems facing the country.
The root cause of the problem lies in the cross-strait Economic Cooperation Framework Agreement (ECFA) and Ma’s China-centric policies, which caused a sharp outflow of investments to China, declines in exports, rising unemployment and plunging salaries, Hsu said.
Chen does not have a say in the Ma administration, Hsu said, adding that the TSU would like to give Chen a chance to address the economic problems.
Hsu said he appreciated policies proposed by Chen that focus more on small and medium-sized enterprises rather than big conglomerates.
Earlier yesterday, Council for Economic Planning and Development Vice Minister Wu Ming-chi (吳明機) presented a briefing on the current economic situation at the weekly Cabinet meeting.
“Despite a lingering economic downturn, there are no signs that the nation’s economy will be worse off,” Wu told reporters after the meeting.
“If there is no drastic change in global economic conditions, we expect a gradual economic recovery,” Wu said on the conclusions of the meeting.
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