In light of my other posts today about LGBTQIA rights legislation in Taiwan, and the enlightment of its politicians, here’s a foreign amateur’s Recent History and Economics in Taipei, 101. (Sorry, I couldn’t resist the play on words and numbers.)
Back in 2008 as the economic meltdown hit worldwide, governments reacted in different ways, some horribly. (For example, the US which copied its plan from the Great Depression: Cut off spending and trade, then wonder why there’s no spending and trade.) Taiwan’s ruling party at the time was the conservative Kuomintang (KMT) party. They didn’t cut trade or spending because Taiwan is dependent on it. They didn’t want to spend billions on bailouts, a politically untenable policy especially when smaller parties were making political gains.
They chose instead to stimulate the economy, but not by giving it to corporations. Instead, the KMT government gave out NT$3600 in coupons (approximately US$107 in 2008) to elibigle Taiwanese citizens, every individual and household. (Foreigners like myself didn’t get any.) The coupons had a short time limit, until September 2009, which encouraged people to spend them as fast as possible. This money drove the economy, preventing business closures and keeping people employed. In time, the extra tax revenue generated from spending coupons and respending regular money (the multiplier effect) meant the government roughly broke even, which isn’t a bad thing during a recession.
It was a publicly popular decision and a low-risk both politically and economically. Most importantly, it worked. While there were job losses, bank closures and a shrinking of trade and GDP, it wasn’t anywhere near as disastrous or damaging as in the US, Europe or other Asian countries. Taiwan’s economy recovered quicker than most countries’.
The KMT eventually lost power in later elections, but public opinion of them is still positive and they remain the second most popular party in Taiwan.
TAIPEI, Taiwan — Premier Liu Chao-shiuan formally announced yesterday a government plan to distribute NT$3,600 shopping vouchers to each of the nation’s citizens early next year. He expects the NT$82.9 billion program will help stimulate domestic spending and economic growth.
The plan received highly positive responses from both the business community and the public as it imposes on restrictions on the status of the recipients regardless of income level.
Liu told a news conference that the program is expected to raise the country’s gross domestic product (GDP) growth by 0.64 percentage point for 2009 if all the coupons are used for shopping.
Under the program, each citizen holding the nation’s ID card will get NT$3,600 in coupons that will be valid until the end of 2009, to purchase goods, Liu said.
(Feb. 4, 2009) On December 5, 2008, the Special Statute for Distributing Consumption Vouchers for Revitalizing the Economy was promulgated and took effect in the Republic of China (on Taiwan) (ROC). It will remain in force until September 30, 2009. According to ROC President Ma Ying-jeou, “Taiwan is the first country in the world to distribute consumer vouchers since the onset of the global economic downturn.”
Under the Statute, each individual who is eligible for collecting a voucher as stipulated by the Ministry of the Interior may collect an NT$3,600 (about US$107) consumption voucher to be used for purchasing merchandise or labor services or for making donations. The vouchers are exempt from income tax.