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Can Taiwan's Economic Miracle Persevere?
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So many businesses
and individuals had gone bankrupt as a result
of wanton abuses like these. On top of that, influential
men are often above the law, so enforcement is
often discriminating. Businesses that have more
serious problems or abuses but are well-connected
to the party in power, never have any trouble
carrying on business as usual.
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If you have the
connection, you can fix anything-rule of man,
not rule of law. Thus a political big-shot owning,
on the surface, 0.05% of a company's stock can
be the chairman of the board with real power,
not just an honorary position. Furthermore, Taiwan's
economic landscape is dotted with big and dominating
Kuomingtang-owned enterprises that set the bad
examples for others to follow. For instance, the
China Development Corporation (CDC) is such a
"special" KMT-owned enterprise that neither the
banking law nor the investment banking law can
touch it, but runs one of the biggest banking
and investment banking operations. How can there
be any discipline, or social justice to support
enforcement system? Political party-owned enterprise,
have you ever seen one before? |
| 3) |
Banking
Problems-Banks are supposed to run a transparent
operation, giving no special favor to anyone and
based strictly on business merits. Banks are to
follow strict guidelines set by the regulatory
agencies. I am a banker, I know. But not so in
Taiwan. There are so many banks which became intertwined
in a three-in-one Trinity relationship with Big
Business and government that they can do any deal
any way they want without regards to any regulations.
The situation is so serious President Lee was
heard questioning how could the auditors, from
the regulatory agencies and the banks involved,
fail to uncover total illegal excessive lending
of as much as $19 billion. Statistics show it
is far easier for government/party-owned enterprises
and big businesses to borrow from banks than small
and medium enterprises which actually are much
more efficient and productive and have contributed
the most to Taiwan's economic boom. What an irony
and how unfair! Since 1991, about 16 private banks
have entered the banking scene and they are required
to have no single owner possessing more than 5%
of its stock for obvious reasons. The reality?
All of them are in severe violation of the rule
through various ingenious means and are securely
under the control of big business-an open secret
only responsible regulators are unaware of. The
interference by governmental interests in the
banking operation is particularly worrisome-it's
like allowing the referee to play in the game!
A recent example is banks being "asked" not to
make margin calls to support government priority
to save the stock market-two wrongs here, violation
of rule and since when is government responsible
for the performance of its stock market? |
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