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ECFA to widen income disparity: forum
BUBBLES GALORE: Experts predicted that the trade agreement would increase
‘triangular trade’ with China, exacerbating long-term economic risk to the
nation
Ko Shu-ling
STAFF REPORTER
Monday, Sep 13, 2010, Page 3
Experts at a forum on economics yesterday said the Economic
Cooperation Framework Agreement (ECFA), which came into force yesterday, would
exacerbate income disparity and unemployment in Taiwan.
Chiou Jiunn-rong (邱俊榮), a professor of economics at National Central University,
said President Ma Ying-jeou’s (馬英九) administration focused too much on GDP
growth and relied too much on the manufacturing industry, which risked retarding
the development of the service industry and restricting employment
opportunities.
“The ECFA will add more bubbles to the top of the country’s economic bubble,” he
told the forum, organized by Taiwan Thinktank.
Titled “The Economy Grows for Who?,” the event sought to prescribe remedies for
the widening gap between rich and poor, and propose strategies for future
economic development.
“The administration hopes the ECFA will remove taxes imposed on China-bound
exports, but what will happen is ‘triangular trade’ will become more prevalent,
production will concentrate more in China and industrial capitalists will make
more money, while the disadvantaged become poorer,” Chiou said.
Triangular trade refers to orders that are taken in Taiwan for goods made abroad
— usually in China — which does nothing to improve Taiwan’s employment situation
or stimulate domestic demand.
As a result of its overemphasis on GDP growth, Chiou said the administration
spent too much time and money tackling the problems of the Central Taiwan
Science Park and Kuokuang Petrochemical Technology. The excessive government
subsidies for the manufacturing industry also distorted the use of limited
public resources, he said.
The uneven allocation of education resources also exacerbated the problem, he
said. Extending the nine-year compulsory education to 12 years would not fix the
problem, he said, urging the government to consider issuing educational vouchers
so that children from disadvantaged families could afford higher education.
In addition to changing government policies on economic development, Guo
Jiann-jong (郭建中), director of the Graduate Institute of Mainland Studies at
Tamkang University, proposed the expanded use of free-trade zones.
“China and the other countries we sign free-trade agreements with should not be
our sole free-trade areas,” Guo said. “We have free-trade zones in Taipei,
Keelung, Taichung and Kaohsiung operating 24 hours a day.”
Guo also said the government should encourage young people to start businesses,
preferably in the service industry. The service industry should work with
academic institutions to train talent, while the government should offer the
necessary funding, Guo said.
The academic system must also change from providing students with degrees to
teaching them critical thinking and competitiveness, he said.
The administration must also avoid separating the minimum wage of local workers
from their foreign counterparts, Guo said.
Lee Chien-hung (李健鴻), a professor at the Chinese Culture University’s Graduate
Institute of Labor Science, said the administration ignored problems associated
with “new poverty” and “working poor,” and did not have policies to address
these problems.
“The government’s liberalization policy will only make things worse,” he said.
Saying unpaid leave was illegal, Lee said Premier Wu Den-yih (吳敦義) deserved
condemnation for saying earlier this month that its inventor deserved a Nobel
prize.
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