A Cabinet proposal to release a cost of living index at regular intervals has become a subject of debate. Apart from the challenge of designing an index that reflects public opinion, it is necessary to clarify what the phrase “grassroots economy” means if the government hopes to alleviate economic hardship.
The first question is whether there is any need to promote a grassroots economy. Public dissatisfaction has built up after years of economic stagnation or even decline in living standards.
The government must therefore pay greater attention to creating jobs for the middle and lower classes and raising their incomes so a broader section of the populace can reap the benefits of economic growth.
Furthermore, the global economic crisis has dealt a heavy blow to consumption in Europe, the US and Japan, which has affected the nation’s exports. A grassroots economy implies developing the local economy, moving away from an export-based development model dependent largely on the electronics, information technology and telecommunications sectors. Instead, it requires focusing on local demand and locally driven growth.
This is in line with public opinion and would help transform and bolster the economy.
Understanding and monitoring the economic hardship faced by the public does not require compiling a cost of living index.
More important is formulating manufacturing and economic policies that can improve people’s lives.
The public’s desire for security is a key part of this. Public investment, community improvements, disaster reconstruction and water management — all of which are related to quality of life — must be discussed and planned with care.
Creating jobs and raising incomes are the most important aspects of a grassroots economy.
The government must pursue industrial development strategies that can improve the quality of living, including food, clothing, homes, transportation, education and entertainment.
Developing local services through public investment, promoting a manufacturing sector with local characteristics and establishing new manufacturing and service enterprises should all play important roles in economic policies.
With regard to spreading the benefits of economic growth, a grassroots economy must aim to achieve a high quality of life and high-quality products.
This includes making esthetic improvements to communities and providing public places that meet people’s needs.
Traditional markets should be renewed and communities should have sports and leisure centers.
If a grassroots economy is to help transform the economy, the government will need to sit down with enterprises and discuss how to develop technologies in all industries and apply them to new services and business models.
The goal should be to stimulate and respond to demand. For example, the government can encourage catering and service providers to adopt information technology and new forms of management.
A grassroots economy should be seen as a policy intended to meet the needs of the public and promote economic transformation.
The government should start by taking a critical look at its industrial and economic policies and then formulate a strategy that incorporates the idea of a grassroots economy.
Tsai Horng-ming is an associate professor in the Graduate Institute of International Affairs and Global Strategy at National Taiwan Normal University.
TRANSLATED BY JULIAN CLEGG
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