The government has painted a bleak economic outlook for this year by slashing its annual GDP growth forecast to 1.66 percent last week.
The dismal figure reflects a worse-than-expected global economic slump amid lingering eurozone debt crisis and anemic U.S. economic recovery.
With exports accounting for 70 percent of our gross domestic product, we cannot expect our economy to be immune to worldwide economic headwinds.
An in-depth analysis of major economic indicators, however, shows that the global market slowdown are by no means the only factor behind our current trade woes. Our falling competitiveness has played no smaller role in leading to our export slump.
In the first seven months of this year, our exports fell 5.8 percent year-on-year, while our three closest Asian competitors -- Hong Kong, Singapore and South Korea -- all posted positive growth.
Most alarming was that information communication technology (ICT) product exports suffered an over 20 percent decline during the seven-month period.
Technology sector used to be a driving force behind our export boom. Fast evolution of technology, society and consumer behavior, however, has left our DRAM industry out of global competition, flat panel industry reeling from technological backwardness and financial losses.
Other high-tech sectors such as LED and solar energy industries as well as PC and smartphone industries are also languishing after the bubble burst.
When the economy is thriving, most businesses can easily make money. When the boom goes bust, less competitive businesses tend to falter first. Regrettably, the latest global economic recession has exposed many weaknesses in our economy. We lag far behind in overall economic and industrial competitiveness.
As the government is drawing various economic stimulus packages, we want to remind our policy makers and strategists not to try to bail out all major companies in financial distress.
In this new digital era, no business is too big to fail and no business is too small to succeed. The government should focus on structural overhaul and let companies with obsolete or unsustainable business models go bankrupt. (Editorial abstract -- Aug. 20, 2012).
(By Sofia Wu)