TAIWAN’S ELECTIONS

EXCITING TIMES FOR TAIWAN

Joe Thomas Karackattu

Institute for Defence Studies and Analyses , January 13, 2012

Taiwan President Dr. Ma Ying-jeou is seeking a second four-year team and is running against his main opponent DPP Chairperson Dr. Tsai Ing-wen. Even though the polls post a three-way contest, it is largely a two-way one as the PFP candidate, Dr. James Soong, would likely be engaged in a tug-of-war with the KMT electoral base (pulling away a lot of undecided voters), rather than hurting the decidedly DPP-camp voter. Ma Ying-jeou’s campaign is largely driven on the plank of economic gains promised to the people of Taiwan, chiefly through the signing of the Economic Cooperation Framework Agreement (ECFA) in July 2010 (tariff reductions beginning w.e.f. January 2011) between the People’s Republic of China (PRC) and Taiwan. It is true that Taiwan, like many other countries, has faced the double-dip recession in the US and Europe with creditable success, and the ECFA was responsible for some of this economic gain. Taiwan’s real GDP grew by 10.72 per cent in 2010 (believed to be the highest GDP growth rate since 1987), and the growth rate for the first half of 2011 was 5.54 per cent. Steps such as permits to Mainland tourists brought in over $2 billion into Taiwan in tourism alone. Despite lagging global recovery, the Directorate-General of Budget, Accounting and Statistics projects the economic growth forecast for 2012 at 4.19 per cent, with per capita GDP at $20,472.

However, the implementation of the ECFA early harvest programme in the last year has included only a limited set of products, and the real effects of the agreement would only be realised in the second stage which commences this year (tariffs on 94.5 per cent of listed items would be reduced to zero by the end of the year involving 437 of the 500 Taiwan product categories). Also, the 2010 growth figures belie the low baseline of the 2009 growth statistics from a post-recession year and hence should not be overhyped. Recent surveys such as the one by Commonwealth Magazine indicate that 45.5 per cent of Taiwan’s top 1000 CEOs surveyed believe that the ECFA has not yet had any influence on Taiwanese companies but is expected to help in the future; 34.9 per cent said ECFA has had no impact on gains for Taiwan. With or without the ECFA, there have been no noticeable gains on gathering more economic and political space internationally - relations with ASEAN, and with other countries outside the region have been in the ‘business as usual’ mode.

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