Kuan Chung-min: Government restrictions hamper economic growth
Taiwan News, Staff Writer
2014-02-20 10:28 AM
On Wednesday Chung-ming Kuan, chairman of the National Development Council, placed some of the blame for Taiwan’s underperforming economy on an excess of restrictions and controls and the lengthy environmental impact assessment (EIA) process imposed on investors by the government.

Kuan said in a radio station interview that after the heyday of the 1980s when things seem to get better day by day, Taiwan’s neighbors continued to improve while Taiwan hit some hard times. Now everyone in Taiwan is uneasy and we are stuck in a negative cycle, he said, and the most important task for us is to break out of this negative cycle.

Kuan pointed out that real wages in Taiwan are now at the same level they were at 16 years ago. He said the economy is dormant and industrial added value needs to be a lot higher. He added that wages must be increased in order to stimulate the economy and the whole industrial structure needs to be adjusted. This is something that cannot be accomplished overnight, he added.

Kuan noted that per capita income in Singapore is now double that of Taiwan, and South Korea no longer views Taiwan as its economic competitor. He said Singapore believes that it is not even on the same plane as Taiwan any more, while South Korea has moved into the ranks of the G20 and sees Japan as its key rival rather than Taiwan. As for Hong Kong, he said, the former colony has latched onto the back of China’s buoyant economy and no longer concerns itself with Taiwan.

Kuan emphasized his point by noting, "I said a long time ago that there is no such thing as the ‘four little tigers of Asia any more."

Kuan said the turning point in Taiwan’s fortunes came during the 1980s when there were less controls and businesses had a wider range of options and tricks at their disposal. As Taiwan developed into a more mature society, however, the government instituted a variety of controls and restrictions on companies operating on the island, and now it tries to do too much on behalf of business. The result, he said, is that the economy has cooled down and cannot easily be heated up again.

Kuan stressed that while it is important to take the environment into account and maintain a balance in of land use while pursuing economic growth, if there are too many restrictions on business, economic growth is impossible. .

Kuan cited the blocking of KuoKuang Petrochemical’s planned industrial complex on the west coast of Taiwan as an example. He noted that the petrochemicals are a trillion-dollar industry in Taiwan, but when KuoKuang encountered resistance from some people over its new plant, it simply packed up and went to Singapore. Kuan noted that Singapore is a tiny nation that pays close attention to environmental protection, so why is it agreeable to accepting investment by the petrochemical industry? He said one reason is because the EIA process adapted in other countries in very clear and transparent, with a few basic principles that factories must adhere to if they want to set up there.

Kuan continued, "On the other hand you have the long, drawn-out EIA process followed in Taiwan. Here, you never know how long things will drag on, in a meeting today you’re given ten requirements that need to be met and you take care of them, then the next time you have a meeting you’re hit with another ten items to address. When investors see how the game is played here, they opt not to come."

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