Why the economy won’t get better
As a foreigner living in Taiwan, I have often wondered how people could believe the Chinese Nationalist Party (KMT) propaganda that the Taiwanese economy was in the doldrums and that somehow this should be blamed on the Democratic Progressive Party (DPP) “mismanaging” the economy.
While I am not even remotely an economist, I know enough that 6.07 percent GDP growth in 2004 and above-4 percent GDP growth average since 2001 (at a time when most mature economies struggled to surpass the 2 percent mark) was not indicative of a struggling economy. Furthermore, as I have written before, the supposedly “high” unemployment rate in Taiwan would make people in most Western economies dance in the street.
Yet another indicator — call this one a “layman’s view” was how busy the redundant high-end shopping malls in downtown Taipei were. If the economy were in such a terrible state, people would not be buying Armani suits and expensive jewelry at Swarovski. And yet, on any given day, the malls were filled with shoppers.
This led me to investigate the matter a little more. Were the KMT claims founded? If not — and aside from electoral rhetoric — what was it that they had missed? It soon emerged that context was everything. Taiwan’s economy has matured tremendously since the booming 1980s, when its GDP growth reached 16 percent, and all the elements that allowed for that “miraculous” growth had, since the 1990s, shifted to China, which is now enjoying the benefits. The global financial situation, one that is very much anchored in the US economy, is also a principal factor that has often been overlooked by the KMT and the critics of the DPP. The terrorist attacks of Sept. 11, 2001, and sings that the US is headed for recession, have had and will have an impact on the state of Taiwan’s economy, but somehow we rarely hear about that, as if Taiwan could somehow operate outside the global economy (nothing could be falser) or that further integration into the “greater China” economy would solve everything (also false, but espoused by the KMT, as if China were not dependent on the global system).
Readers can access the full article, titled “Some economic truths for the KMT,” by clicking here.