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One person not to blame for Taiwan's economic performance

Publication Date : 26-02-2014

 

Taiwan President Ma Ying-jeou used to say that Taiwan enjoyed a high economic growth rate compared to the other Asian Tigers - a term used in reference to the highly free and developed economies of Hong Kong, Singapore, South Korea and Taiwan.

However, this remark was rebuffed by National Development Council (NDC) Minister Kuan Chung-ming, who said that “Asian Tigers” is a term for the past. Singapore's gross national income now more than doubles that of Taiwan. South Korea is now a member of the G-20 and sponsors various world trade events. As for Hong Kong, it is riding on the back of China, and as its economy soars, while Taiwan is nowhere in sight, Kuan said.

Ma is president as well as the chairman of the Kuomintang (KMT), which enjoys a majority in the Legislature. This almost gives Ma complete control over the government of Taiwan, allowing him to launch new policies freely. However, Ma was unable to lead fellow KMT members to reach a consensus about economic policy. Many say that he should take the bulk of the blame for Taiwan's underperforming economy.

Taiwan has gradually lost its competitiveness. According to International Monetary Fund statistics, the other three Asian Tigers have a higher per capita GDP compared to that of Taiwan. In addition, Taiwan also has the highest unemployment rate.

Taiwan used to see double-digit GDP growth in the 1970s, creating “economic miracles” from the perspective of other countries. However, it is easy to see that Taiwan has started to lag behind.

There is much to learn when comparisons are made between Taiwan and South Korea. Seventy per cent of the two countries' exported products overlap. South Korea used to lag behind Taiwan in terms of GDP, GDP per capita and amount of exports. However, South Korea recently edged out Taiwan to take the lead in all these areas. It has also created well-known brands famous around the globe, such as Samsung, LG and Hyundai. Taiwan has fewer commercial brands, and Taiwan should ask why it cannot achieve what its major competitor was able to.

President Ma has long stressed the importance of establishing closer ties with mainland China. It is a policy which not only ensures peace across the Taiwan Strait, but also allows Taiwanese companies to expand into a massive market. Some critics say that this policy is not working, for Taiwan's economy has underperformed in recent years.

However, most countries around the world eye China as one of the most attractive markets, and international firms continue to strive for opportunities to break into this huge market. Ma's government considers the inking of a cross-strait service trade agreement a landmark achievement, for it allows local merchants to engage in a wider array of business activities in mainland China.

While some critics say the government of Taiwan failed to negotiate with Chinese authorities on an equal political footing, they forget that the agreement will in fact contribute to Taiwan's GDP. They forget that this is an agreement that many nations actually model when they negotiate trade agreements with China.

It is easy to see faults in others, and many often lash out with their criticisms of the government. But few are able to say they could do a better job if they were placed in the president's shoes.

It is a fact that Taiwan has been gradually overtaken by other Asian countries. While President Ma should take the blame for not being able to unite the KMT, he should not bear full responsibility for Taiwan's worse-than-expected economic performance. We should never blame something on one single person. In fact, all residents living on this island are partially at fault.

 

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