Tsai's costly plan is against the will of people

Taiwan's main opposition Democratic Progressive Party, DPP, Chairperson Tsai Ing-wen speaks during a press conference in Taipei, Taiwan, April 15, 2015. [Photo/IC]

Early this month, Taiwan lawmakers approved an infrastructure stimulus plan designed to boost demand and thus the island's economy. The "proactive" stimulus plan, which the Tsai Ing-wen administration had said in March would involve 880 billion New Taiwan dollars ($29 billion) and be spread over eight years, ended up with only half the originally planned investment and duration.

The compromise was made after lawmakers from both the ruling Democratic Progressive Party and opposition parties such as Kuomintang criticized the original version as backdoor dealing and poor planning. The project could be extended after four years through legislative approval.

Despite concessions, even some DPP politicians questioned the decision-making process and prospects of the four-year plan. Taipei Mayor Ko Wen-je has dismissed the plan as a waste of money, while some senior economists say they fail to see anything "proactive" or financially feasible in the plan, which explains why Tsai had to reduce its investment and duration to half.

Proposed just six months ago and altered several times on unheralded requests, Tsai's "grand" plan has come into effect without soliciting enough public opinions. Worse, the distribution of resources is apparently in favor of the regions that support the DPP, fueling concerns that the plan is aimed at rewarding die-hard DPP supporters.

And although the plan is designed to target railways, water resources, green energy and the digital economy, it suffers from a lack of foresight. Projects such as improving streetscapes, managing vehicle parking and fixing sewer systems have been put on the list of major construction projects, and Tsai has sought to invest more than 400 billion NT dollars in railway construction, which has a meager 6.4 percent support rate according to a June survey.

No wonder people are questioning why Tsai is proceeding with the costly infrastructure plan against the will of many people and politicians.

As a DPP politician, Tsai often questioned the cross-Straits agreements on goods and service trade endorsed by her predecessor Ma Ying-jeou, and said they were a result of behind-the-scene negotiations. The "proactive" plan she has muscled through the legislature after assuming office in May, however, shows her double standard policy.

There is enough reason to question whether the humongous infrastructure plan will work, because, among other things, it will not be funded by government funds but by borrowing debts. Over-indebtedness may not only cause delays in construction and lead to a waste of resources, but also impose extra burden on the next administration. The ambitious plan risks going down the drain should Tsai fail to heed lessons from the aborted major infrastructure projects over the past two decades.

The author is a researcher at the Institute of Taiwan Studies, Chinese Academy of Social Sciences.