honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Saturday, November 17, 2007

Inflation brings signs of want to Taiwan

By Annie Huang
Associated Press

Hawaii news photo - The Honolulu Advertiser

A fish vendor strolls through the streets at a market in Taipei, Taiwan. Inflation, fanned by soaring prices for fuel and other commodities, has become a hot political issue as the island moves toward legislative elections in January 2008 and a presidential poll two months later.

CHIANG YING-YING | Associated Press

spacer spacer

TAIPEI, Taiwan — The stout man in a blue apron handed out discounted fried dough stuffed with minced green scallions to Taiwanese office workers in a back alley lined with low-priced eateries.

"Prices of everything from soybean oil to flour to scallions have skyrocketed," said Tsai Hui-ming. "I have to offer discounts because many customers complain they haven't had a pay raise for years and can hardly afford the bare necessities."

Inflation — fanned by soaring prices for fuel and other commodities — has become a hot political issue in Taiwan, as the island moves toward legislative elections in January 2008 and a presidential poll two months later.

A number of disgruntled consumers have taken their complaints directly to their leaders, telling President Chen Shui-bian that they can barely make ends meet. The problem exploded late last week when an unemployed man interrupted Chen while he was making a speech at the opening of a trade show in Taipei.

The man, identifying himself only as Charlie, shouted: "People can hardly make a living!"

He sparked what the media have dubbed the "Charlie syndrome," a reference to disgruntled people who are typically reserved and respectful toward their government leaders now lashing out during their public appearances.

Later the same day, a meat vendor complained about her lagging business volume when Vice President Annette Lu toured a market in the southern city of Kaohsiung to check on prices. Several others yelled at leaders elsewhere last weekend; in the southern city of Tainan, Chen's bodyguards had to shield him from a gaggle of protesters.

At a meeting with farmers Saturday, a visibly annoyed Chen said people complaining about economic hardships should move to China, the island's archrival across the Taiwan Strait.

"You could swim over there, and don't come back after you do," Chen said.

In Taipei, dough vendor Tsai has joined a number of bakeries and restaurants handing out discount coupons — often either early in the morning or late at night — to promote sales and help consumers make their money go further.

SIGNS OF WANT

Consumers have been seen lining up for hours for free or discount coupons, especially in the south of the island, where the high-tech boom entrenched in Taipei has hardly trickled down to the common person.

The signs of want are unusual in Taiwan, which registered double-digit economic growth during the 1970s and 1980s as new industrial infrastructure shunted aside a large portion of the agricultural base.

Taiwan's inflation rate rose to a 13-year high of 5.34 percent in October, boosted by rising fuel prices and typhoon-induced destruction of large swathes of vegetable gardens and other agricultural lands.

Still, prices on the island of 23 million people are low compared with many parts of Asia.

Even with a 3 percent increase earlier this month, the price for 92 octane unleaded gasoline — $3.53 a gallon — is among the lowest in the region.

But economist Liang Chi-yuan said years of sluggish economic growth has made inflationary pressures bite, particularly among poorer Taiwanese families.

Citing government figures, he said that over the past seven years, disposable household income rose at an average annual rate of 0.4 percent, while annual expenses grew by 1.2 percent.

Some of Taiwan's economic problems stem from the massive exodus of local manufacturers, who have moved to the Chinese mainland to take advantage of relatively cheap labor costs there.

RESPECTABLE GROWTH

Despite enmity between Taiwan and China, unofficial estimates suggest at least half a million Taiwanese — mostly from the middle classes — are living, working and spending across the Taiwan Strait.

Still, booming high-tech exports fueled a respectable Taiwanese economic growth rate of 4.6 percent last year, with a similar figure expected for 2007.

In the run-up to the election season, the main opposition Nationalist Party has fastened on the economy as its top issue, noting the number of households falling under the poverty threshold has risen from 30,000 to 80,000 in the last few yeas. It has also used its Web site to feature a 14-year-old boy reduced to shucking oysters to pay for his English tutor.

"Our rulers should have more empathy toward the poor," said Nationalist lawmaker Wang Jin-pyng.

Economist Wu Hui-lin of Taipei's Chunghua Institute for Economic Research said that for all the opposition's sound and fury, Taiwan's economy remains generally sound.

"The government should halt hoarding but otherwise leave inflation for the market to check," he said.