The following is a translation of select portions of the premier's report.
Speaker You, Deputy Speaker Tsai, esteemed members of the Legislature:
Last year, the shadow of COVID-19 continued to loom over the world, with the number of confirmed cases topping 420 million and deaths reaching 5.9 million. The emergence of new variants with greater transmissibility led many countries to experience a resurgence that broke record highs. The global economy and people's lives have all been dealt a heavy blow.
Nevertheless, through the unified efforts of our people, Taiwan has produced exceptional results, not only keeping the pandemic at bay, but also bucking the global trend by the outstanding growth of our economy. Last year, our economic growth rate was 6.45%, the highest in 11 years. The World Economic Outlook database published last October by the International Monetary Fund predicts that we will regain our place among the world's top 20 economies by 2023.
Taiwan has just earned its best rankings ever in a series of global indexes published in recent months. In the 2021 Corruption Perceptions Index published January 25 by Transparency International, Taiwan placed No. 25 out of 180 countries. This is our highest rank ever since the index began in 1995.
In the Nikkei COVID-19 Recovery Index published February 4 by Nikkei Asia, Taiwan's performance was ranked No. 1 globally. In the 2021 Democracy Index published February 10 by the U.K.-based Economist Intelligence Unit, out of 167 countries surveyed, Taiwan not only achieved the top category of "full democracy" for the second year in a row, it also improved its ranking to No. 8 globally and No. 1 in Asia.
In the 2022 Index of Economic Freedom published February 14 by Washington D.C. think tank The Heritage Foundation, Taiwan placed in the category of "economically free countries" for the first time. Out of 184 countries listed, only seven reached this top category, with Taiwan ranking No. 6, and furthermore being the only such country with a population over 20 million. The report also praised Taiwan for being one of the few countries in the world to have experienced continuous economic growth during the past five years.
Last year, our people voted on four referendums, the results of which demonstrated how Taiwan is a mature civil society. Once our issues were resolved through democratic mechanisms, our society quickly resumed its peaceful state.
In this new year, we will face trials and challenges from the constantly changing circumstances of the pandemic and other international issues. Nonetheless, we will seek opportunities in the restructured global supply chain to increase our industrial competitiveness and make our economy prosper. We will seize this moment at the height of Taiwan's international visibility to bravely stride onto the world stage and initiate closer economic and trade relationships. We will also accelerate construction of forward-looking infrastructure, expand social care systems, and provide more welfare benefits for our fellow citizens to create a more stable society. We must also prepare our defense forces, exerting our utmost effort to resist military intimidation, protect our national sovereignty, and safeguard the free and democratic constitutional institutions that we have worked so hard to achieve.
Please allow me now to deliver my policy report centered on the three themes of prospering the economy, striding onto the world stage and supporting the people's wellbeing.
Prospering the economy
Protection from the pandemic means production for the economy. Over the past year, we've been continuously consolidating medical supplies, raising vaccination rates, strictly maintaining border controls and community precautions, and reviewing and improving various safety measures. This has prepared us to confront repeated surges of the Omicron variant that first broke out in January. In addition, despite an increase in travel across the island during the nine-day Lunar New Year holiday, our domestic cases remain stable and under control.
Regarding vaccination, nearly 83% of our population have received at least one dose of vaccine, over 76% have received two doses, and about 40% have received a booster shot. We have also purchased a total of 25,000 courses of oral antiviral medicine from Pfizer and Merck. The first batches of medicine from both companies have already arrived in January. Taiwan is the first country in Asia to have two kinds of oral antiviral medicine at the ready.
Taiwan's pandemic situation is relatively stable, and our vaccine coverage is quite high. Plus, the vast majority of domestic cases have shown mild symptoms or no symptoms and our medicine supplies are fully stocked. Therefore, moving forward, we will flexibly update our COVID policy to build a new "Taiwan model" that balances pandemic safety with economic growth. While continuing to be tough on the pandemic, the policy will create the smallest disruption to people's lives with the largest effect on stopping COVID. Our goal is to ensure that industries will produce as normal, society will operate as normal, and we'll maintain the momentum of our economic growth.
In 2020, not only was our economic growth rate the highest among the Four Asian Tigers, but we were also the only one among the world's major economies to post positive growth. In 2021, our economic growth rate rose to its highest in 11 years, and our GDP per capita also surpassed US$30,000 for the first time.
In the area of foreign trade, our last year's total export values and export orders exceeded US$446 billion and US$670 billion respectively, both historic highs, marking 19 and 23 consecutive months of positive growth.
Regarding investment, last year our public construction budget implementation rate reached a 14-year high, and domestic investment as a percentage of GDP reached a 21-year high. Regarding consumption, as of January of this year, the turnover in the wholesale, retail and food service sectors had also sustained several consecutive months of growth.
We have also made great progress promoting the Three Major Programs for Investing in Taiwan. Total approved investment in the past three years has already surpassed NT$1.65 trillion (US$58.7 billion), attracting investment from over 1,100 businesses. This has spurred higher investment by supply chain businesses and created over 130,000 job opportunities. In response to continuing changes in the global market and investment environments, the Executive Yuan has greenlighted a three-year extension of the Three Major Programs, which is forecast to attract close to NT$1 trillion (US$35.6 billion) of additional investment.
In order to further secure Taiwan's key position in the global semiconductor supply chain, as well as to meet the overall demands of the industry's future development, the government is now working with the private sector to develop a comprehensive western tech corridor. Over the past two years, the Executive Yuan has greenlighted construction of a series of new science parks, such as Kaohsiung's Qiaotou Science Park, the Hsinchu Science Park X and science parks in Chiayi and Pingtung. We also approved the third phase expansion of the Southern Taiwan Science Park's Tainan location, the second phase expansion of the Hsinchu Science Park's Baoshan Township location and the second phase expansion of the Central Taiwan Science Park's Taichung location. Last year's revenue for Taiwan's three major science parks is estimated to have reached a record-breaking high, exceeding NT$3.5 trillion (US$124.9 billion).
We have also upgraded export processing zones into "technology industrial parks" and opened them up for new development, including the second phase expansion of the Kaohsiung Software Park and the expansion of the Pingtung Technology Industrial Park, as well as the renewal and renovation of the Cianjhen Technology Industrial Park and the Tanzi Technology Industrial Park. We are also helping businesses undergo digital transformation and introducing technologies related to the "5G artificial intelligence of things." The total revenue for technology industrial parks last year exceeded NT$460 billion (US$16.4 billion) for the first time, another record-breaking high.
The government also places great importance on upgrading the farming, fishery and livestock industries. An investment of NT$12.6 billion (US$448.2 million) has been approved for the establishment of a nationwide cold chain system. It will encompass the transportation of agricultural, aquatic and livestock products in an uninterrupted cold supply chain from production sites to storehouses to markets to stores, all the way to the hands of consumers. This will bolster the development and competitive strength of Taiwan's agricultural industries, bringing revolutionary change as well as greater profits for farmers.
To ensure the cultivation of high-level talent, we are using a public-private cooperation model involving industries, government and academia to steadily foster the local talent required by our nation's key industries. Several top universities have worked with private corporations in Taiwan to set up colleges for the study of semiconductor technology and international finance, which have been enrolling students since the end of last year. In addition, through the Act for the Recruitment and Employment of Foreign Professionals, we are increasing incentives for outstanding international talent to come to, and stay in, Taiwan to meet the recruitment needs of our key industries.
Concerning the augmentation of mid-level skilled talent, the Executive Yuan approved a new program two weeks ago to raise incentives for long-term retention of migrant workers. This will motivate the accomplished and technically skilled foreign talent who have already worked in Taiwan for many years, as well as the foreign students and overseas compatriot students who have received education here, to stay and contribute to Taiwan.
In the World Talent Ranking 2021 published last December by Switzerland's International Institute for Management Development, Taiwan ranked No. 16, our best performance in 10 years.
Striding onto the world stage
Over the past year, Taiwan's visibility on the international stage has reached a historic high. In Asia, Europe, the Americas and Australia, countries have passed resolutions of friendship and support, or used legislative diplomacy to deepen exchange and express support for our participation in the international community.
Last year, the U.S. Senate and House of Representatives sent bipartisan delegations three times to visit Taiwan. Delegations from the EU Parliament, three Baltic state parliaments, and the French Senate and National Assembly also visited during October to December of last year. "Taiwan's fate will determine the future of the world," said a member of one of the delegations I received. Although they came from different countries, all of them expressed admiration at how Taiwan is still able to use democratic methods to contain the pandemic, combat disinformation and supply important materials to meet international needs, all despite China's forceful intimidation. This is also a reason why nations wish to befriend Taiwan and learn lessons from us.
Last year, the EU Parliament and parliaments of multiple European nations passed a total of 26 pro-Taiwan resolutions, representing a new peak of friendly support. On February 10, the Australian parliament's Joint Standing Committee on Foreign Affairs, Defense and Trade issued a report expressing support for Taiwan to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On the same day, the United Kingdom's House of Commons approved a motion across party lines, calling on the U.K. government to strengthen the Taiwan-U.K. trade relationship and deepen security cooperation. The following day, the U.S. government released an Indo-Pacific Strategy report stating that it will work with regional partners to maintain peace and stability in the Taiwan Strait, including by supporting Taiwan's self-defense capabilities. On February 17, the U.K. and Australian prime ministers issued a joint statement after a virtual summit, once more calling for stability across the Taiwan Strait and expressing support for Taiwan's meaningful participation in international organizations.
Despite China's unrelenting oppression, the Taiwanese Representative Office began operation in Lithuania on November 18, 2021, the first office in Europe to be called "Taiwanese." This was a hard-won and significant diplomatic achievement. Going forward, we will continue to strengthen substantive cooperative relations with Taiwan-friendly nations and demonstrate how resilient our free and democratic partnerships are when we work together.
In order to bolster regional trade relationships, Taiwan resumed the Trade and Investment Framework Agreement talks with the U.S. last June after a five-year hiatus. On September 22, 2021, Taiwan officially applied to join the CPTPP. The government is currently adjusting regulations and systems and planning supporting measures, putting forth our full effort to actively win over the support of member nations.
Regarding Japanese food imports from Fukushima and its four neighboring prefectures, China and Taiwan were the only nations in the world that still maintained an import ban as of the end of last year. All CPTPP member nations had already lifted their restrictions and we could not ignore these international standards. Through last year's referendum, Taiwan declared to the world our willingness to align with global norms and demonstrated our determination to gain entry to high-standard international economic and trade blocs. The referendum also showed that the government's policies on food safety won the support of the majority of citizens.
Over the past decade, the government has conducted stringent testing on 180,000 Japanese food import items, all of which passed radiation residue tests. We've also completed six risk-assessment reports and investigations and confirmed that the maximum exposure levels were all lower than standards set by the International Commission on Radiological Protection.
Our government will never allow imports of radiation-contaminated food and our commitment to food safety is non-negotiable. Mindful of the nation's health, on February 8 we announced reasonable adjustments to our 11-year long ban on Japanese food products and proposed new safety regulations for importing food from Fukushima and its four neighboring prefectures. We will adhere to three principles—returning to scientific inspection, adopting stricter regulation than international standards and ensuring food safety—and three complementary measures—shifting import bans from specific regions to specific products, requiring proof of radiation testing and proof of origin for at-risk products, and conducting batch-by-batch border inspections of all food products from the five at-risk prefectures. The related control measures have already been announced with effect on February 21.
Former Japanese Prime Minister Shinzo Abe stated that Taiwan has crossed a major hurdle to joining the CPTPP by lifting the Japanese food import ban in a reasonable and safe manner. Japan-Taiwan Exchange Association Chairman Mitsuo Ohashi also said this decision will help deepen economic relations between our two sides, and has recommended that Japan revive its Economic Partnership Committee talks with Taiwan after an eight-year hiatus. Meanwhile, many CPTPP members have welcomed Taiwan's bid to join the trade agreement.
To strengthen Taiwan's economic and trade presence in Europe, last October the government organized an economic and trade investment delegation to Slovakia, the Czech Republic and Lithuania, where they reached agreements on cooperative projects covering a broad range of topics including semiconductor talent training, the automobile industry, chip design, tourism, financial technology, economics and trade, and taxation. Two months later, Slovakia sent its largest and highest-level delegation to Taiwan in 20 years, and convened the first deputy-ministerial level economic and trade meeting with Taiwan. A meeting of the Taiwanese-Slovak Commission on Economic Cooperation was also held to discuss economic and trade investments, industrial connections and other topics, paving the way for stronger bilateral cooperation.
The government will also propose a project to strengthen links with Europe. Based on our increasingly close friendship, we will further develop Taiwan-Europe collaboration in various fields by integrating resources across ministries and agencies.
Last year was also our best-performing year under the New Southbound Policy. Taiwan's export value to the 18 countries targeted by the policy exceeded US$82.6 billion, which is the highest ever and represents a 35% jump over the previous year.
In the area of national defense, we've seen many breakthroughs in efforts for domestic production of aircraft and vessels. The Brave Eagle advanced jet trainer successfully made its maiden flight and was delivered to our military at the end of last year. We expect to take delivery of eight more new advanced jet trainers by the end of this December. In domestic shipbuilding, a customs patrol vessel will soon set sail, while the Coast Guard's second 4,000-metric ton patrol vessel will also be delivered, significantly increasing our ability to monitor our waters. In January President Tsai also witnessed the commissioning of the Navy's first minelaying squadrons, which will help defend the waters around Taiwan.
Regarding Russia's violation of Ukraine's sovereignty, Taiwan's situation differs from Ukraine's in terms of geostrategic factors, geographical environment, and importance in the international supply chain. Nonetheless, to prevent foreign forces from exploiting Ukraine's situation to conduct cognitive warfare on Taiwan and undermining peace and stability across the Taiwan Strait, our government will vigorously combat disinformation and strengthen our responses to stabilize society and public morale. Our military will raise their surveillance and early warning of military developments around the Taiwan Strait in order to respond swiftly to any contingencies.
Faced with changing developments from hostile forces, the Ministry of National Defense also established the All-out Defense Mobilization Agency with operations beginning January 1 this year.
Supporting the people's wellbeing
The COVID-19 pandemic, international oil price fluctuations, global raw material supply issues, and shipping and transport problems are all contributing to a rise in global inflation. And since Taiwan is mostly reliant on imports for energy and general resources, prices in Taiwan are also seeing fluctuations. In response, the government is making an all-out effort to boost the economy, create more benefits for the people and ease financial burdens. At the same time, we are keeping a close eye on inflation and stabilizing prices, using all means possible to lower the impact on people's livelihoods and the economy.
The government will continue to share the fruits of economic growth with all the people by increasing wages and cutting taxes for everyone. We raised the labor force's minimum wage for six years in a row, with a 5.21% hike in the minimum wage this January—the highest rate increase in 15 years. Public-sector employees also received a 4% salary raise this year, which is the highest hike in 25 years. In tax reduction, we've raised the basic living expense allowance for income tax purposes for five consecutive years, with 2021 seeing the highest increase in history.
To stabilize commodity prices, the government is using anti-inflation mechanisms to keep water, electricity, oil and gas prices steady. Since February 7, the government has waived or reduced tax burdens on certain raw materials, such as by waiving business taxes on soybeans, wheat and corn, and halving import tariffs on butter and baking-purpose milk powder. These measures will lighten the burden on livestock farmers and food and beverage businesses by easing up pressure on prices for animal feed and food ingredients. Additionally, commodity taxes on gasoline and diesel fuel have been lowered twice, and various tax-reduction measures approved last December were extended to this April, including measures to halve cement commodity taxes, halve beef tariffs and waive wheat tariffs, all of which are expected to mitigate the impact on price fluctuations.
The Ministry of Economic Affairs is coordinating with businesses to set up "anti-inflation sections" in supermarkets where everyday products are sold at fair prices. The government has also designated that industrial raw materials be used to meet domestic demand first, and will closely watch and investigate those who take the opportunity to drive up prices.
In response to the short, medium and long-term impacts that the Ukraine situation will have on stock and forex markets as well as prices of energy, food and commodities in Taiwan and abroad, the Executive Yuan is paying close attention to global economic and trade variables, strengthening overall response planning, and maintaining stability in key materials, commodity prices and financial markets to minimize all possible impacts.
Over the past two years, we've not only held the coronavirus at bay but also made remarkable strides in containing other key transmissible diseases. As examples, we've had no cases of severe complications or deaths from influenza from last year's season until now; no cases of severe complications or deaths from enteroviruses last year; zero domestic transmissions of dengue fever last year; and zero cases of measles for two consecutive years. These were all hard-earned achievements.
To ensure each generation of Taiwan is stronger than the last, the government's childrearing support spans from birth to education, and from homes to schools. Last July we expanded fertility treatment subsidies, and increased stipends for parental leave without pay from 60% to 80% of salaries, allowing both parents to apply at the same time. This year we raised up to seven the number of leave days to undergo prenatal exams and to accompany a spouse to prenatal exams and birth. Starting August, childrearing subsidies will be increased from NT$3,500 to NT$5,000 (US$125 to US$178), while public and quasi-public preschool fees will be lowered further.
In addition, the Executive Yuan devoted more than NT$32 billion (US$1.1 billion) to install over 181,900 new air conditioners in more than 3,300 elementary and junior high schools across the country in just a year and a half, fulfilling our goal of having air conditioning in every classroom. In January, all air conditioning installations and electrical facility upgrades were completed ahead of schedule.
Aside from planting native species trees in schools across the nation, we are installing rooftop solar panels to achieve power generation at every school. The electrical power generated in this way will reach an annual total of 410 million kilowatt-hours (kWh), equivalent to about 1.6 times the 260 million kWh needed to power the new air conditioners. Schools will not only become self-sufficient, but can sell the excess 150 million kWh of energy to create a steady income stream for themselves.
This September, we will finish implementing a system of central kitchens to support smaller schools, and deliver piping hot lunches right on time. We'll coordinate the necessary manpower such as kitchen workers and nutritionists, and carefully plan the food delivery process—including having cold chain vehicles and temperature-controlled vehicles deliver fresh ingredients and lunches to schools—so that children everywhere can eat well and enjoy the same quality lunches. To close the learning gap between rural and urban areas, we also invested NT$20 billion (US$711.4 million) in our effort to provide internet access for every classroom and tablet computer access for every student by September.
To strengthen the social safety net, the government will devote more than NT$40 billion (US$1.4 billion) under a five-year plan to hire an additional nearly 10,000 social workers and other professional service providers. We've also proposed amendments to the Mental Health Act to emphasize cross-departmental promotion of mental health. We hope that when patients are transferred from mental health care institutions to communities, or from public health units to other departments, no one will slip through the cracks of our social safety net. The government will also subsidize hospitals in the establishment of forensic psychiatric wards to properly treat mental patients sentenced to rehabilitation or custody.
In terms of the number of traffic accident deaths each year, Taiwan still has much room for improvement. The government takes this issue extremely seriously and has stepped up a number of measures, including: making improvements to dangerous intersections, road sections, and hazardous road sections around schools; expanding more public bus routes to enter school campuses; requiring food delivery companies to adopt food delivery hazard prevention plans that meet higher standards to prevent traffic accidents for delivery personnel; enhancing law enforcement technologies to crack down on illegal behavior; and prosecuting all drunk drivers swiftly and to the full extent of the law.
Governing steadily, uniting Taiwan and striding proudly ahead
Amid the hardships of the global pandemic and the threat of aggression from a powerful enemy over the past year, we have governed steadily, worked hard to control COVID, boosted the economy, and defended our national sovereignty and the safety of our people. We've provided a peaceful living environment for the people with an even freer democracy. Not only does our nation enjoy robust fiscal health so that we're able to increase people's wages, reduce taxes, create benefits, and provide more and better care, we've also maintained strict adherence to fiscal discipline: The central government's general budget has run a surplus for five years straight—with four consecutive years recording a surplus of over NT$100 billion (US$3.6 billion)—and the debt repayment amount has reached NT$120 billion (US$4.3 billion). All of these figures represent 20-year highs.
Faced with a once-in-a-century pandemic, the people of this nation believed in our administration, complied with disease-prevention protocols, and worked together to achieve outstanding outcomes, and to them I am truly grateful. The people are the reason why so many countries applaud and support Taiwan, and the reason we can hold our head up high in the world. As long as we stand firm in our convictions, cooperate in solidarity, and build up our own strengths and ingenuity, we can overcome any difficulties or hardships with courage.
The challenges of the future are still daunting as ever. We must safeguard our nation, stabilize the pandemic situation, protect the people's health, and boost livelihoods and industrial production capacities. We must devise strategies to grow the economy and bolster our competitiveness to ensure Taiwan maintains a key position in the global industrial chain. As we boldly expand our international economic and trade presence, we will stride forward into the world and continue to shine brightly on the global stage.