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EDITORIAL:
Bureaucracy hampers liberalization
Deregulation and liberalization have been the focus for markets recently and the
Cabinet is once again making a case that reform is necessary for long-term
economic development. The government’s problem lies in its poor policy execution
and inefficient bureaucracy, leaving it with a string of empty promises.
On Wednesday, Premier Jiang Yi-huah (江宜樺) finalized the government’s third-party
payment policies at a Cabinet meeting, allowing non-bank payment processors to
provide online transactions on behalf of merchants and consumers. Under the
plan, non-banks will be allowed to provide third-party online payment services
pursuant to the Act on Issuance and Management of Electronic Monetary Cards
(電子票證發行管理條例), with the maximum amount allowed in online stored-value accounts
set at NT$10,000 (US$334) each. Businesses offering such services must have at
least NT$300 million in paid-in capital.
By the end of the year, the Financial Supervisory Commission (FSC), the Ministry
of Economic Affairs and other government agencies will draw up new legislation
and management guidelines for e-commerce and third-party payment services.
On Thursday, the Cabinet approved the Council for Economic Planning and
Development’s proposal for establishing “free economic pilot zones” in Taiwan.
With the planned deregulation in the flow of goods, talent and capital, the
government aims to develop intelligent logistics, international medical services
and value-added agriculture and industrial innovation centers in Taiwan. Other
industries suitable for liberalization that have growth potential, such as
financial services, will also be considered for inclusion in the zones in the
future. The Cabinet’s next step is to enact a special law governing the zones,
which will include large-scale deregulation measures and tax incentives, pending
legislative approval.
In view of the underdeveloped service sector, the slow progress in industrial
transformation and a lackluster track record in attracting foreign investment,
the Cabinet’s plans for third-party payment services and pilot zones show
policymakers’ desire to stimulate economic growth. The government has removed
roadblocks to pursue the development and competitiveness of domestic financial
services and electronic commerce providers through a partial Cabinet reshuffle,
especially the removal of former FSC chairman Chen Yuh-chang (陳裕璋), who had been
at odds with economy and technology officials over several issues.
As promising as the government’s plans are, proper execution of the plans
remains a challenge. The government has not divulged much information about the
contents of its policies, nor the operational conditions and complementary
measures for companies. Businesses are wondering whether the government’s
policies and the scope of deregulation are viable — that is, whether the
Cabinet’s plans make sense.
There are complaints from e-commerce businesses that the ceiling of NT$10,000
for individual online stored-value accounts is too low. Also, there are worries
that the pilot zones plan will be a privilege only a few businesses can enjoy,
rather than being a platform allowing companies to upgrade their operations to
provide high-end services on a level playing field.
It is understandable that the government aims to further the nation’s
development through deregulation and liberalization at a time when the global
and domestic economies remain weak. Taiwan does need reform policies and
visionary plans to revitalize itself, but it also demands a government with more
efficient civil servants, less red tape and a strong ability to implement
policy.
A survey released by the German Trade Office Taipei last month warned that
Taiwan is losing its competitive edge to China in terms of business friendliness
and government efficiency. Personnel recruitment is posing the biggest
challenge. Before the Cabinet can confidently voice optimism about its plans, it
must solve its bureaucratic inefficiency.
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