Taiwan must take bold action to break through its economic difficulties, Premier Jiang Yi-huah said in an address to the Third Wednesday Club, an association of elite enterprises. He asked for the business community's support in promoting free economic pilot zones, free trade agreements (FTAs) and industrial transformation as these policies are central to Taiwan's economic growth.
"The breakthroughs may not happen overnight, but with persistence, we will reap the rewards in five to 10 years," he added.
Taiwan must become a free trade island before it can reach its full economic potential, the premier said, and the government should open Taiwan's markets in a gradual, orderly manner to allow citizens to see the benefits of liberalization. To establish free economic pilot zones, for instance, the government has designated several locations where economic activities will be liberalized. The boundaries on these conceptual zones are virtual because some industrial activities will not be confined to these zones but will take place throughout the country.
Having a systematic design will clear any doubts the public may have on how the zones operate, Premier Jiang continued. He hoped the entire country would be free of barriers in a few years and become a free economic zone that can readily integrate into the regional economy.
"For decades, liberalization has been the most important principle driving Taiwan's socioeconomic prosperity. If we constantly restrict ourselves or hesitate during the course of economic development, the opportunities will slip away. The reason we must pursue FTAs vigorously is to catch up with other countries that have already moved ahead.
"Our main competitor South Korea is a case in point. To make their exports more competitive and remove the negative effects of tariff barriers, they recently concluded FTAs with the U.S., mainland China, Japan and members of the Association of Southeast Asian Nations. If we continue to sit here, worrying about which industries will be vulnerable and putting off exporting our products to the world, we are simply waiting to die."
The economic cooperation agreement that Taiwan signed with New Zealand last week marks a significant step forward, Jiang added. It holds the promise that Taiwan can forge similar pacts with other major countries.
The premier also hopes Taiwan can conclude a trade in goods agreement to complement the recently signed trade in services agreement with mainland China. The two pacts together will be a boon to Taiwan's goods and services industries. Unfortunately the critics have painted a grim picture, contending that the pacts will let the wolves in, take away jobs and sabotage Taiwan's sovereignty. But signing the services trade agreement was precisely what needed to be done to keep Taiwan strong and protect its workers, he emphasized.
"We are not afraid to venture out and we do not fear competition. The people of Taiwan are endowed with much talent, creativity and resilience. As long as we apply these strengths to the economy, we will see success beyond expectations," Jiang added.