The current global financial and economic crisis is by no means a matter of short-term business cycles but the most serious structural crisis faced by the world economy since the Great Depression of the 1930s. Instead, what we may be witnessing is the end of the era of the so-called "New Economy" based on neoliberal "market fundamentalism" and the lifting of controls on new financial tools whose expansion has far outpaced their grounding in substantive value of goods and services.

Even if much of the excess production capacity of the world system is squeezed out by the sharp and largely simultaneous contraction, it is by no means evident that new sources of vibrant growth will emerge or that the structural crisis. The sobering fact of the matter is that there is no visible light at the end of this tunnel.

Hence, the current crisis also provides an opportunity for Taiwan to reconsider its current economic structure and development path and formulate new directions and visions for a new future in which substantial value may again count for more than virtual money.

But taking advantage of this opportunity requires the adoption of a Taiwan-based vision, the adoption of comprehensive and cross-disciplinary long-range perspectives and the opening of the minds of policy makers and their leadership of a process of brainstorming, dialogue and consensus-building that can involve all major social groups and interests.

Moreover, we will also need the formation and adoption of new innovative policy tools that can revamp our current industrial structure in line with new values.

Hence, the formulation by the Ministry of Economic Affairs of a method of coping with the crisis faced by Taiwan's dynamic random access memory (DRAM) industry through "industrial reconstruction" centered around a public-private "Taiwan Memory Company" is an interesting development.

The new concept marks a shift from the traditional pattern adopted by the former Kuomintang government in the 1990s of jawboning state-owned banks to "assist troubled enterprise" through ill-considered loans or mergers that involved grave moral hazards by failing to deal with the fundamental reasons for mismanagement or sanction incompetent owners and executives.

We believe that the KMT government should consider wider application of the principle behind this notion to other industrial sectors besides using it to rescue or reconstruct capital intensive and high-technology export oriented industries.

Indeed, the government could make a massive contribution to boosting the stability of our domestic economy, employment and social stability with a fraction of the funds going into the TMC project with similar efforts to support the upgrading of Taiwan's small and medium manufacturers and enterprises, which may account for over 75 percent of Taiwan's employment opportunities and at least half of our export and import trade value.

Past KMT and DPP government have made efforts to foster the formation of new small enterprises through "incubation" centers and to ease their cash-flow and other financial problems through expansions in the Small and Medium Business Credit Guarantee Program and recurrent offering of production, marketing, financial and other managerial advice.

However, such efforts have still lagged far behind what is necessary.

The current crisis in the global and domestic economy and especially in employment provides an important opportunity to rethink these past methods and launch a national campaign for the upgrading of small and medium enterprises and the enhancement of traditional industries by supplying support in key areas, including provision of factory space, financing and trade information.

Moreover, the government can refocus and redouble efforts to help SMEs gain access to what they need most but are least able to procure given their relatively small scale, namely assistance in research and development and in training of their employees.

As indicated by the content of yesterday's DRAM industry "rescue through industrial reconstruction" concept, Taiwan's fundamental path to improve global competitiveness lies not in cost cutting, including searching for minor tariff cuts, but in securing "technological autonomy" and domestic research, development and design capability in order to enhance the "quality gap" with other nations.

Access to markets, whether in the United States, Europe, Japan, Southeast Asia or China, is useless without quality products and services and this is the basic fact of which all too many Taiwan policy makers and enterprises have lost sight. More broadly, the path to enhancing national competitiveness is to upgrade the quality of our people and not simply improve the efficiency or nominal profitability and for this we need the "economic autonomy" and space which would be irreversibly compromised by the rash embrace of deeper economic integration with the "cost-down" dynamic of trade and economic relations with the People's Republic of China.