President Ma Ying-jeou on the morning of February 22 attended the opening of the 2012 CommonWealth Economic Forum sponsored by the CommonWealth Magazine. In remarks at the gathering, the president explained how the government will work to achieve an economic transformation that enables Taiwan to be a winner in this age of risk. He said he hopes that over the coming four years the government will achieve the goals of a more equitable distribution of wealth, higher employment, greater innovation, and greater participation in regional economic integration.
President Ma stated that the government fortunately adopted appropriate policies when the financial tsunami affected the entire world in 2008. At that time, the government unveiled the so-called "three supports" policy, in which the government supported banks, the banks in turn supported enterprises by providing financing, and enterprises supported laborers by keeping them on the payroll. It also issued consumption vouchers in order to reassure the public. In 2009, Taiwan's economy gradually began to stage a recovery as the unemployment rate fell, economic growth accelerated, and investment and exports performed well. President Ma expressed his belief that facing these steep challenges gave Taiwan a chance to stop and consider what opportunities were on the horizon. Crisis, they say, brings opportunity, and hardship can make one stronger. This provided Taiwan a valuable opportunity to learn how to survive amidst adversity.
The president also told participants that Taiwan has strong economic fundamentals and an outstanding workforce. As long as the proper policies are put in place, the nation can overcome challenges and grow. Consequently, the government has adopted three attitudes when it comes to facing challenges. The first is to create a healthier economic system and achieve restructuring, i.e. the government needs to create a peaceful and prosperous environment that will enable enterprises to perform to their fullest. The second is to accurately address problems, make the best use of one's expertise, and respond quickly. The president pointed to the "three supports and one stabilization policy" as an example of this. The government formulated measures to address the situation at the time, which not only stabilized the financial situation, but also reassured the public. Lastly, the president said it is important to be adamant on policies that are correct, bear patiently with unjust criticism, and take bold action. President Ma remarked that an example of this was the signing of the cross-strait Economic Cooperation Framework Agreement. Even though the negotiation and signing of this pact elicited quite a bit of public skepticism two years ago, it has been shown that this pact has created new opportunities for Taiwan's economy. In addition to "trade creation effects," the ECFA has also produced "spillover effects," such as the signing of the Taiwan-Japan Bilateral Investment Arrangement, and entry into negotiations on economic cooperation agreements with Singapore and New Zealand. The ECFA has enabled Taiwan to return to the world economic stage, expand liberalization, and hasten its internationalization.
With regard to the administration's objectives for the next four years, the president outlined the goals of a more equitable distribution of wealth, higher employment, greater innovation, and greater participation in regional integration. In terms of more equitable distribution of wealth, President Ma noted that globalization has widened the gap between rich and poor, and the economic recession triggered by the financial tsunami only worsens this problem. Even though the government has promoted a number of policies to reduce Taiwan's wealth gap, and the income of the top quintile is now down to 6.19 times that of the bottom quintile, the fact remains that many lower income households still require transfer payments. Consequently, the government continues to expand social welfare programs. Examples include the institution of labor insurance annuities and a national pension plan, two hikes in the minimum wage, the addition of new provisions to the Public Assistance Act, and the raising of eight different types of financial assistance for the underprivileged. At the same time, the president stated that reforms are starting to be carried out on the tax system, pointing to the introduction of the "specifically selected goods and services tax," expropriation of land at market prices, and the recording of real estate prices based on their actual transaction value. All of these initiatives, he said, are aimed at moving society more towards the goal of "social justice." The president reiterated that the Ministry of Finance is designing a policy for tax reform, which will call for high earners to shoulder a higher tax burden, while also ensuring greater fiscal soundness and better caring for the underprivileged.
In terms of boosting employment, President Ma turned to the example of Chen Shiow-ching (陳秀卿), president of D. E. Chung Hua Foods Co., Ltd. and her insistence on providing help to financially strapped middle-aged women. Chen's example emphasizes the importance of work not only in providing income to people, but also in providing a sense of dignity. As a result, the government over the past three years and eight months has already created nearly 400,000 jobs, and it will continue to make efforts to further reduce the unemployment rate.
Next, the president discussed the importance of innovation. He mentioned that Taiwan must transform from an efficiency-driven economy into an innovation-driven economy. With this in mind, the Act for Industrial Innovation was enacted two years ago and the business income tax was cut to 17%. At the same time, innovation must also be carried out in conjunction with corporate development. President Ma remarked that Taiwan has a great deal of innovative talent, as proven by the stellar performances of Taiwan in the area of patents and the accolades won by Taiwanese at international design competitions. In the future, the government will work to help commercialize these patents and designs, thereby paving the way for Taiwan to become a global innovation center.
As for integration, President Ma stated that the government will continue to expand Taiwan's efforts to be a part of regional economic integration. It is aggressively pursuing opportunities for economic cooperation with the United States, the European Union, and ASEAN nations, which will help to create even greater liberalization of Taiwan's economy. In particular, the Trans-Pacific Partnership (TPP) which is being promoted by the United States, in the future will become a core of economic cooperation in Asia. President Ma remarked that the government over the next 10 years will create the conditions that enable the nation to join the TPP. At present, efforts have already begun to promote Kaohsiung as a free economic demonstration zone .
President Ma emphasized that the government will continue to work to build up Taiwan as a global center for innovation, an economic and trade hub in the Asia-Pacific, a global headquarters for Taiwan companies, and a regional headquarters for foreign companies. At the same time that we pursue economic development, however, the government will also place heavy emphasis on social justice. For example, this year he will introduce the "Gross National Happiness index," which will provide direction for national policy in the future. He expressed his hope that the sharing of these experiences just mentioned will enable Taiwan to emerge from challenges and soar to even greater heights.