Tue, Jul 04, 2023 page8

• The real problems facing Taiwan

  • By Michael Danielsen
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  Recent discussions in Taiwan about reviving the cross-strait service trade agreement highlight a fundamental difference between political parties in Taiwan. Instead of talking about domestic reforms, and a new angle on trade and investment agreements with the EU and the US, the Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) insist on revisiting the idea of an agreement that passed its expiration date in 2014 with the Sunflower movement. Such an idea puts Taiwan at risk of losing broad support among Europeans, or could even cause other supporters to think that if Taiwan can seemingly decrease tension with China so easily, their support for Taiwan is less desired and less necessary.

  Such a policy would not solve any of Taiwan’s real problems, but only make Taiwan more dependent on the Chinese economy and Chinese investment. Chinese economic power makes it inevitable that economic dependency on China creates risks for Taiwan’s sovereignty.

  Instead, the KMT and the TPP should engage in a deep discussion and create new hope for Taiwan. They should develop policies that reform Taiwan to be an even better society. Apparently, this is not on their agenda.

  The real threat to Taiwan comes from Taiwanese themselves, if fresh hopes for a better life are not fostered. Today, Taiwanese see only reforms that progress too slowly, and in the meantime, the population is becoming more dissatisfied with low wages, healthcare issues and difficulties for young people entering the housing market. This transformation through reforms is a critical balancing act.

  Failure to reform is the greatest threat to Taiwan’s continued existence as a united and successful society. Without reform, Taiwan’s economy and welfare cannot continue, as Taiwan risks slowly becoming economically and politically more dependent on China, due to declining welfare development, and later giving in to further agreements with China.

  In Taiwan, industry is largely driven by cost minimization with many subcontractors, and tends to demand lower wages, but is also unable to create many new industries, and Taiwan has limited experience with the entire value chain in product development. Wages risk remaining low, and Taiwan will find it harder to improve welfare unless further measures are taken to create a more robust knowledge economy. Wages in Taiwan have been surpassed by China, Singapore and South Korea.

  The Democratic Progressive Party (DPP) government has introduced initiatives in green technology, biotechnology, smart machinery and the Internet of Things. Critics say that the initiatives are too unambitious or that politicians should not interfere in industry. There is a need for even more dialogue in Taiwan and perhaps more new industries should be started from scratch to break free from outdated thinking.

  This issue might sound familiar in other democracies, but the political solutions offered by the KMT and the TPP are simply more of the same, especially in areas such as the economy and the reform agenda, which will be decisive for Taiwan’s future. The situation is urgent, and this is why next year’s presidential and legislative elections are important.

  Dissatisfaction among the population affects their perception of politicians. The DPP will have been at the helm with a majority in parliament for almost eight years on election day. The discontent revolves around the economy and living standards, ironically amplified by hopes that the DPP itself previously created and encouraged.

  Taiwanese could be their own worst own enemies at the next election if they think that punishing the ruling party, the DPP, is the answer.

  However, at the same time, the DPP needs to step up and urgently begin taking the necessary steps toward further reforms in association with other progressive political parties. Without reforms, Taiwan will have a weaker economy and increased dependence on China, and this will weaken Taiwan’s self-determination.

  Michael Danielsen is chairman of Taiwan Corner.
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