Taipei, May 14 (CNA) Economists on Friday examined President Ma Ying-jeou's economic policies at the halfway mark of his term and expressed hopes for a better performance in the next two years that will pull Taiwan's economy back on track.
Ma had to deal with an unexpected and difficult challenge -- the global financial crisis -- in his first year in office and has had his ups and downs along the way, but Taiwan's economy has shown signs of recovery since the second half of 2009, experts agreed at the seminar organized by the Taiwan Competitiveness Forum.
"That shows you Ma must have been doing something right, " said Lai Shyh-bao, a lawmaker whose expertise is in management and economics.
The International Monetary Fund has forecast Taiwan's gross domestic product (GDP) growth rate in 2010 at 6.5 percent while Global Insight has put it at 5 percent, both of which would be good enough to outperform Asian rivals South Korea, Hong Kong and Singapore, he said.
Concerns remain, however, especially over a recovery that has not created many jobs or increased stagnant wages, Lai said.
He suggested that the administration pay more attention to labor-intensive rather than high-tech sectors and be aware of the rapidly widening wealth gap that could possibly lead to social problems and instability.
Hong Chi-chang, a former legislator and former chairman of the Straits Exchange Foundation (SEF) , Taiwan's quasi-official organization that deals with cross-strait matters, concurred.
"Taiwan is experiencing growth that cannot be felt by the general public and a recovery without employment opportunities," he said.
Bert Lim, president of the World Economics Society, a policy study think tank, warned the administration it would be making a mistake if it intends to boost the economy through private investment and private consumption, because private spending and investment have been shrinking for more than a decade.
But the necessary public investment may not be forthcoming because Taiwan's economic policy has progressively moved toward "left-wing socialism, " Lim argued, citing the country's shifting budget priorities.
During former President Lee Teng-hui's time in office in the 1990s, over 40 percent of the government budget was devoted to the economy while 11.6-13 percent was spent on social welfare.
But under former President Chen Shui-bian from 2000-2008, government spending on the economy ranged from 9-15 percent while social spending grew to 36-42 percent, said Lim.
Ma is following Chen's policy rather than emphasizing free trade initiatives and aggressive entrepreneurism -- two characteristics that made Taiwan's economy blossom in the 1970s -- Lim contended.
Citing the example of former U.S. President Ronald Reagan, whose economic policy led the U.S. to a "glorious" 1980s, Lim encouraged Ma to move toward further deregulation to stimulate economic activity again.
Day Jaw-yang, a researcher at the Taiwan Research Institute, warned that the proposed economic cooperation framework agreement (ECFA) should be a tool, rather than an objective, for Taiwanese businesses to take advantage of China's resources in their global development.
The Ma administration hopes to sign the pact with China in June as a first step toward normalizing trade across the Taiwan Strait.
"How President Ma handles domestic matters in the 'post-ECFA' era will be crucial in the second half of his presidency," Day said. (By Chris Wang) enditem/ls