Annotation 2: ECFA issues

Source: http://onlinelibrary.wiley.com/doi/10.1111/j.1746-1049.1966.tb00493.x/pdf

The Developing Economies

Volume 4, Issue 4, Article first published online: 6 MAR 2007

“THE MODERN INDUSTRIES AND THE TRADITIONAL INDUSTRIES -at the Early Stage of the Japanese Economy”

Wrote by NAKAMURA TAKAFUSA

In recent years, Taiwanese government is struggling to change the agricultural nature of Taiwan into something that is more export-oriented and has more value reflecting on the market. Does our agricultural income not important enough to have an impact on the foundation of Taiwan economy? Here is a passage from the article which I found, “not only did Agriculture supply the food to support the nation but it supplied a large part of the labour force which was indispensable for the development of the economy.(Page 568)” When our government trying desperately to make Taiwan become an export-oriented country, we always forgot or intentionally ignore the foundation of our economy. How can we say that our government ”ignore” the agricultural industry in Taiwan? Look at the signing of ECFA (Economic Cooperation Framework Agreement) and the answer will reveal itself.

        My co-worker, Robert, mentioned a man who point out the problems that might come after signing ECFA, Professor Kenneth S. Lin of the department of economics at National Taiwan University, says that the signing of ECFA means the decrease of job opportunities and the increase of unemployment rate. These unemployed people are mostly farmers and traditional industry worker, these people’s social status are near the lower part of our society. People always view them with an economical judgment, conceiving them as a not-so-profitable group in our economic system, agriculture had always been thought as an industry that is doomed to be eliminated. But in the article, it mentioned that “it must be taken into account that many of these agricultural people had side-jobs in manufacturing and commerce.” Although this article is writing about Japan’s economic development, it can also be applied on Taiwan’s working class. A survey(*1) done by the Institute of Sociology, Academia Sinica, shows that compared to Professional farmers, Part-time farmers had now become the major group of Taiwan’s agriculture system. And so this points out an important concept, farmers and workers, they might have other side-jobs in their life, one cannot define their economic position only as farmer and worker, we have to take account of their side job’s economic value and contribution. 

from “The Survey of Taiwan’s social Transition” 

An image of the proportion of Taiwanese farmers' career decision   

        In my last annotation I mentioned the raise of unemployment will cause our social security expense become too high for our country to afford, and as Professor Lin said, signing of ECFA means the decrease of job opportunities and the increase of unemployment rate. These unemployed people were mostly farmer and workers, when our country is already having troubles with these people’s social security expenses, Taiwan also has to deal with the problem of losing a large part of the labour force. These two major cracks in Taiwan economy are what we are going to face when signing ECFA, since our government didn’t even consider these problems, how can we trust them to decide the next decision for Taiwan’s future economy?

Note 1: “The Survey of Taiwan’s social Transition” by the Institute of Sociology, Academia Sinica http://www.ios.sinica.edu.tw/TSCpedia/index.php/%E7%84%A1%E7%B1%B3%E6%A8%82%EF%BC%8C%E6%A8%82%E5%A6%82%E4%BD%95%3F%E8%BE%B2%E6%B0%91%E8%88%87%E8%BE%B2%E6%A5%AD%E7%9A%84%E8%95%AD%E7%91%9F

Transcription (1)

There is an article saying that when a country facing global economic downturn, the social security expend will be very high in that country. Social security include tax reduce, health insurance, and pension. When the country’s financial foundation could not afford the high expense of the social security, the country’s economy will crumble. And this report shows that although the global economic system seems getting recovered, the unemployment in the country is still very high. And because the unemployed must be taken care of, so our social security spending is higher and higher than ever. This is just like a vicious spiral because the unemployment is getting more and more, and due to this our expense of social security is also getting higher and higher. This report also shows that in Asia countries, social security plays an important part in our society, our expense. So how can we compare this to Taiwan?

In Taiwan, we take good care of the minority, like farmers, they got agriculture pension, the poor got financial supports, and the sick got health insurance. And when our country spend money on taking care of these people, we already got troubles supporting them. In recent years, our country have some policies like signing contracts such as ECFA, and ECFA is getting more and more farmers become unemployed. We have to take care of these farmers, and when these farmers are getting more and more until we couldn’t afford them anymore, maybe our country’s economic system will crumble. So the conclusion is that, our government must take care of the poor, the minority. If the number of the minority is getting more and more till our economy could not afford them anymore, our country will crumble. We cannot develop economy, we cannot take good care of these poor people, our country will stand on an awkward situation, and in the end our country’s economic system will fail.  

Annotation1: Securing social stability before economic development

Source: 
http://www.issa.int/Resursy/ISSA-Publications/Dynamic-Social-Security-Securing-social-stability-and-economic-development

Dynamic Social Security: Securing social stability and economic development

ISSA’s Social Security Observatory
Chapter 1 and Chapter 6

         We can see from the report that, if a country faced global economic downturn, the problems of unemployment and poverty will increase violently, and the government had to spend money on the social security program such as tax reduce and health insurance in order to maintain social stability in the country. But when the level of unemployment and poverty had increased so violently that the country’s financial foundation couldn’t hold them anymore, this country’s economic system might eventually crumble. As we see from this paragraph: 

    “As we arrive at the end of 2010, global economic recovery and exit from the crisis remains slow and uncertain. Despite signs of recovery in global markets, in many countries unemployment is not falling. Higher levels of unemployment continue to restrain social security income from contributions while simultaneously requiring ongoing increased expenditure on benefits.”
        The expending on social security is like an endless money-burning vortex, as long as the number of the unemployed remains high, this vicious spiral will ends up becoming the great hole of the country ‘s economy. And as the report suggests, among Asia country, “Social security systems are integral to the management of the social, economic and political dimensions.” (Page 7) Our economic system are bounded with the social security systems, the over-expense of social security will eat up our money which we are going to spend on improving the country’s economic structure.

from page 7

The economic policy in Asia and Pacific area

         And what does this issue has anything that is related to the argument of balance between economy and social fairness? Well, in Taiwan we have a mature structure of social security, the farmer got the agriculture subvention, the poor got monthly financial support, and the sick got health insurance. When our society seems so perfect and calm, our government is already having troubles financing these social securities. But as recent years our government kept pursuing the economic prosperity, more and more farmers and workers or those so-called “the minority” had lost their job or having a hard time in their life. Thus, the expending of social security had increased highly over recent years(note 1), and this became a heavy burden while Taiwan is trying hard building its economy.

Note 1: 自由時報: 明年總預算 社福支出占最多
 http://www.libertytimes.com.tw/2013/new/aug/23/today-p1-2.htm

Economy or Social fairness, which should we choose?

        To the people in Taiwan, we now face a grievous dilemma, to strengthen the foundation our economy, or to secure our very right of living, wealth, or even justice? For a long time we had been arguing about the conflict between the pursuit of economic prosperity and the disadvantages it brought to the people who are at a lower social status. Can we ignore the minority’s right of living just for the sake of our economy, can the government sign any agreement that may harm the right of the minority without concerning them first?

        For instance, China is now a prosperous and wealthy nation as we know, however the people living in the country side of China have a total opposite life in contrast with those living in the city. For the sake of the economy, Chinese government established a policy that by monopolizing the price of agricultural products in order to raise the price of other industrial material, and because of this the farmers in China live a rough, destitute life. There’s no deny that China did build a modern industrial foundation from nothing, however this financial plunder of China’s country side seriously weakened the labor force of China, twisting the price of merchandises and stocks, most important of all, it brought severe social inequality upon the people living in the country side, and further extended the Urban-rural gap in China.

        Unlike China, in Taiwan we didn’t sacrifice our entire agricultural economy to exchange the flourish of industrial business. The gap between urban and country area are way much smaller compared to China, but we still face the same question, will we, can we sacrifice some people’s interests in order to benefit the whole nation? Take a look at the issue of the infamous ECFA (Economic Cooperation Framework Agreement), ECFA agrees to Import nearly six hundred Chinese agricultural products that were used to be restricted to protect our own agricultural business, and these now unrestricted products will surely bring devastating impact on our agricultural business, leave thousands of famers lost their life support. And if we reduced or even stopped the exporting of the agricultural products, it will definitely bring mass impact on our export-based economy. 

       Searching for the true justice for the minority is the key to dissolve the unbalanced conflict between economic status and people’s rights. Of course we can’t ignore the minority because if we leave the gap between the poor and the wealthy getting bigger, we will face the same problem that China now racking their brain with. Social inequality, the mass loss of human resources, and serious Urban-rural gap, these problems rot the roots of a country’s economy, if we don’t have a sense of trying to prevent these things from happening, Taiwan’s economy will eventually reach a dead end. When the roots were all rotten, how can the plant grow higher and stronger?