Although the Directorate-General of Budget, Accounting and Statistics (DGBAS) has been continuously revising its economic growth forecast for this year upward since November, the public’s concern about a growing disparity between rich and poor is overshadowing the government’s cheery GDP forecast.
On Thursday, the DGBAS reported strong economic growth in the second quarter and raised its full-year growth forecast to 8.24 percent, higher than the 6.14 percent predicted in May, and the highest in two decades.
The statistics agency’s GDP growth forecast was followed by a prediction from the Ministry of Economic Affairs on Friday that the amount of export orders is likely to reach a record high this year and exceed US$400 billion, compared with US$322.4 billion last year.
Also on Friday, a central bank report showed that Taiwan’s second-quarter balance of payments surplus increased 14.8 percent to US$15.38 billion from US$13.4 billion in the first quarter, and was up 30.12 percent from US$11.82 billion a year earlier, indicating that strong exports and net fund inflows have boosted the central bank’s foreign exchange reserves during the period.
Taiwan’s faster-than-expected recovery from the global financial crisis has been spurred on by both domestic investment and exports, but weakening growth in some parts of the world during the second half of this year and a still-high unemployment rate at home could pose new challenges for the economy. In addition, a rising balance of payments surplus could lead to appreciation pressure on the NT dollar, thus posing a threat to the nation’s export-reliant economy.
However, it is the growing disparity in our society that people are most concerned about, rather than GDP growth. The statistics released by the DGBAS showed that the household income gap widened last year, with the average annual disposable income of the most prosperous 20 percent of the population — those who earn around NT$1.79 million (US$56,100) — reaching 6.34 times that of the poorest 20 percent. That was the highest since 2001, when the factor was 6.39. Without factoring in the government’s social welfare subsidies and tax benefits, the gap factor surged to an all-time high of 8.22 last year.
The DGBAS said the widening wealth gap was the result of the global financial crisis, which led to record-high unemployment in Taiwan last year. That explanation is only partly true.
The growing inequality in wealth distribution has more to do with the nation’s distorted tax system, which favors the rich rather than the poor. It also has to do with the persisting practice of triangular trade, in which manufacturers receive orders in Taiwan, but produce the goods at their offshore plants in order to keep costs down and maximize profits. This practice generates jobs overseas, but it does not help the situation here. Without more jobs to help improve stagnating wages, how is it possible to see wealth distributed equitably in this country?
This problem of economic disparity has raised concerns about social justice — a growing sentiment of social injustice among people will simply lead to potential conflicts in our society. If the problem worsens, Taiwan’s economic prosperity would be nothing but a mirage as most people will see their incomes fall, and they will not be satisfied with this unfair distribution of wealth.
If the government is still too engrossed by the attractive growth figures to examine the dark side of the recent trade pact with China or to deal with the widening economic disparity by reviewing Taiwan’s industrial policies and economic structure, the Chinese Nationalist Party (KMT) is merely showing that while it knows how to win votes, it knows nothing about how to govern.
China badly misread Japan. It sought to intimidate Tokyo into silence on Taiwan. Instead, it has achieved the opposite by hardening Japanese resolve. By trying to bludgeon a major power like Japan into accepting its “red lines” — above all on Taiwan — China laid bare the raw coercive logic of compellence now driving its foreign policy toward Asian states. From the Taiwan Strait and the East and South China Seas to the Himalayan frontier, Beijing has increasingly relied on economic warfare, diplomatic intimidation and military pressure to bend neighbors to its will. Confident in its growing power, China appeared to believe
After more than three weeks since the Honduran elections took place, its National Electoral Council finally certified the new president of Honduras. During the campaign, the two leading contenders, Nasry Asfura and Salvador Nasralla, who according to the council were separated by 27,026 votes in the final tally, promised to restore diplomatic ties with Taiwan if elected. Nasralla refused to accept the result and said that he would challenge all the irregularities in court. However, with formal recognition from the US and rapid acknowledgment from key regional governments, including Argentina and Panama, a reversal of the results appears institutionally and politically
In 2009, Taiwan Semiconductor Manufacturing Co (TSMC) made a welcome move to offer in-house contracts to all outsourced employees. It was a step forward for labor relations and the enterprise facing long-standing issues around outsourcing. TSMC founder Morris Chang (張忠謀) once said: “Anything that goes against basic values and principles must be reformed regardless of the cost — on this, there can be no compromise.” The quote is a testament to a core belief of the company’s culture: Injustices must be faced head-on and set right. If TSMC can be clear on its convictions, then should the Ministry of Education
Legislators of the opposition parties, consisting of the Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP), on Friday moved to initiate impeachment proceedings against President William Lai (賴清德). They accused Lai of undermining the nation’s constitutional order and democracy. For anyone who has been paying attention to the actions of the KMT and the TPP in the legislature since they gained a combined majority in February last year, pushing through constitutionally dubious legislation, defunding the Control Yuan and ensuring that the Constitutional Court is unable to operate properly, such an accusation borders the absurd. That they are basing this
RSS