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Can Taiwan's Economic Miracle Persevere?

  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.
  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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