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Taiwan's export dragon programme should detail its scale
Publication Date : 18-07-2012
The local economic condition has been slowing down since the second half of 2011, and exports in June even showed a fourth-consecutive year-on-year decline. Given the small size of the local market, exports have always been the driving force of local economic growth. The alarming export decline has thus forced the Taiwan government to take action.
The Ministry of Economic Affairs (MOEA) proposed the 2012 export dragon programme, a plan encompassing all possible measures the government can think of.
In the programme, the government will provide more loans for exporters to enter foreign markets, invite buyers from all over the world to Taiwan, organise business groups to go overseas to look for potential buyers, enhance Internet marketing and help local businesses to compete for government tenders worldwide. With this plan, the MOEA aims to boost export growth in 2012 to 10 per cent.
The MOEA may have the determination and will to turn around local economic growth, but the programme is not short of criticisms. The most common one is that it does not take into consideration the fundamental problems of export decline in Taiwan — the decreasing competitive edge of local products and the concentration of export products.
Over-reliance on information communication technology products, information technology products and electronic products made Taiwan more vulnerable when these industries were hit more severely by the global economic condition.
This criticism, although correct, is not constructive. Despite pointing out these problems, no one can provide a solution for them except to wait for companies to develop better products or for other industries to become successful. If all the government can do is take measures stipulated in the aforementioned export dragon programme, it is more important to make sure the government make the most use of these measures.
A closer look at the programme shows that the MOEA is not willing to give up any chance in any market. Despite the fact that the European Union was severely hit by its debt crisis, the MOEA is still trying to squeeze money from them by spending more to invite businesses in Europe to Taiwan. This mindset may lift exports, but it also comes with costs.
Since the personnel of the MOEA already have their routine duties, the massive scope of the export programme will significantly increase their workload. Whether the ministry has the capacity to implement the programme remains doubtful.
To make the programme effective, the MOEA has to avoid the halfhearted implementation of the programme, a common feature of public sector undertakings. The ministry should bear in mind that its has limited resources. Misappropriating money and manpower takes a toll on other programmes. Uneven results throughout the programme are a serious threat to its overall success.
Since the global economy is not evenly hit by uncertainties, multinational corporations often seek markets that are relatively prosperous around the world to enjoy a share of the economic growth. This is why they have gone to China in the past years. The government should learn from multinational corporations. A programme to boost exports should put more emphasis on economies that enjoy higher growth.
Taiwan's exports to member countries of the Association of Southeast Asian Nations (Asean) increased by 6.2 per cent year-on-year in the first half of 2012, reaching a record high. According to former Ministry of Finance Statistics Director Lin Lee-jen, it is because the economies of these countries are strong. Although markets in Europe and China are important, countries with more robust economic growth, like the Asean nations, are more crucial for greater exports.