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Commercial Times: Efforts to improve economy have no holidays

Commercial Times: Efforts to improve economy have no holidays

Based on disappointing economic data released recently, many believe the outlook for Taiwan's economy is grim for the second half of this year. In the second quarter, Taiwan's GDP increased only 0.52 percent and projected growth for the whole year was cut down to 1.56 percent, the lowest level since 2010. Statistics released by the Ministry of Finance show that Taiwan's exports in August amounted to just US$23.92 billion, a fall of 14.8 percent from a year ago. This was the seventh consecutive month in which exports have seen negative growth and was the largest decline recorded since September 2009. The Directorate General of Budget, Accounting and Statistics predicted that the country's exports will decline 10.05 percent in the third quarter, with a 7.1 percent contraction expected for the whole year. All these figures indicate that Taiwan has lost its export advantage, and the trend is hard to reverse in a short period of time. The export sector is likely to enter a period of stagnation in the future. Amid the pessimism, there is some good news, however. According to an analysis released in July by Global Finance Magazine based on per capita income adjusted for purchasing power, Taiwan was the 17th richest country among 184 countries and territories in the world from 2009 to 2013. Another report by the World Bank released in April 2014 showed that Taiwan's per capita income based on purchasing power parity (PPP) was US$39,059, higher than Japan's US$34,262 and South Korea's US$29,035. The relatively cheap consumer prices in Taiwan was the main reason why Taiwan's income was higher than that of its two neighboring countries based on PPP. These rankings indicate that Taiwan has not lagged behind in its overall economic development. But these results are very different from the perception of most people in this country, where people's real average salary has declined to the level of 15 years ago and housing prices have soared to unaffordable levels. According to a report by the Taiwan Institute of Economic Research (TIER), based on PPP, the average starting salary of fresh graduates with bachelor degrees in Taiwan was US$1,761 in 2014, lower than Singapore's US$3,019 and Japan's US$1,976. It was even inferior to South Korea's US$1,772 recorded in 2006. This TIER report and the above income rankings combined to show that wealth inequality among generations and income inequality among classes are a more serious problem in Taiwan than in other countries. The government should take steps to address these inequalities. There are still four months to go until the presidential election and eight months before a new president is inaugurated. The efforts to take the country forward and maintain social stability have no holidays. (Editorial abstract -- Sept. 18, 2015) (By Y.F. Low)


Updated : 2021-09-28 01:38 GMT+08:00