On Feb. 28, 2 million people took part in a hand-in-hand rally aimed at protecting Taiwan, demonstrating the people's will and expressing their voices to the world. Encouraged by this, the TAIEX index soared by 137.89 points to 6,888.43 on March 1. It was another example of my theory that "a successful referendum will boost the stock market and help Taiwan's economy." The fortunes of a nation lie in its national will. History has clearly shown us that the higher national unity is, the better the domestic economy, just as a country's economy will surely decline if the public's national will loosens and their national unity collapse.
Under the former Chinese Nationalist Party (KMT) government's rule in the 1990s, financial and economic officials had mistaken China as Taiwan's hinterland. They thought that the future of Taiwan's economy would be in China, and therefore promoted "cross-strait reconciliation" and the "1992 consensus," driving both businesspeople and their massive capital to China.
As a result, the nation's economy drastically declined, as Taiwan dropped from the first to the last place among the "four Asian tigers" -- Hong Kong, Singapore, South Korea and Taiwan. Low-priced shares nicknamed "egg shares" or "dumpling shares" were everywhere in the stock market. Even the so-called "land mine shares" -- shares of listed companies with financial difficulties -- were frequently seen. Runs on several local banks occurred one after another.
By 1998, a financial crisis had gained utmost urgency. The blue-camp officials were nervous and had no choice but to fork out NT$200 billion to stabilize the stock market. This showed that not only did the business policy of embracing China's resources and cheap labor fail to help Taiwan's economy, but it also accelerated the accumulation of bad loans and raised the unemployment rate.
August 2002 was a turning point for the economy, as President Chen Shui-bian (陳水扁) clearly told the World Federation of Taiwanese Associations that there is "one country on either side" of the Taiwan Strait, awakening people's will and bringing a new hope to the country. Stimulated by this, the economy and stock market started to prosper again. His pledge of this stance and the referendum proposal made on Aug. 12 last year further strengthened people's confi-dence. The policy of investing in Taiwan first has been spiritually armed, and the nation's economy has started to take off ever since.
The success of the million-people-hand-in-hand rally on Feb. 28 was yet another demonstration of the people's will, and a reconfirmation of the policies of "Taiwan first" and "Taiwan's economic independence." The strengthening of the public's recognition of the nation has certainly stimulated the vigor of the economy. The significant rise in the stock market on March 1 did not happen by chance.
I want to appeal to the people: do not solely attribute this wave of economic recovery and stock market's performance to the US economic recovery and floating money worldwide. The US economy was prosperous when the blue camp was in power in the 1990s. But the performance of the US stock market did not stimulate Taiwan's stock market at that time. Thus, the improvement of a nation's objective environment also depends on the subjective environment while boosting its domestic economy.
I hope that the public can cherish these fruitful results. Whether the referendum is held successfully and whether Chen is re-elected are crucial to the continuation and further prosperity of such results. If the referendum and Chen's re-election bid succeed, the economy will further prosper, and the rise of the TAIEX index to 10,000 points can be expected at that time.
Huang Tien-lin is a national policy adviser to the president.
TRANSLATED BY EDDY CHANG
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