9/29/03
Journal
Mike Steely
Two articles appeared on Wednesday, September 24 at TaipeiTimes.com:
"Chunghwa union protests privatization" and "Reforms of state-owned firms successful, Yu says." Both articles highlight Taiwan's shift towards more privatization of its SOEs in its attempt at economic reform and to conform to WTO requirements. Though Taiwan's experience in reform in this context has been on-going over the years, it nevertheless relates to the material we have covered in Becker's information in "The Iron Rice Bowl." I recall even years before I left Taiwan of the demonstrations against the restructuring of one of Taiwan's largest monopolies, Taiwan Tobacco and Alcohol.
Joy Su, in her article, "Chunghwa Union...," reports on a demonstration of 4,200-4,500 people in Taipei against plans by the government to privatize the state-owned telecom company and to demand greater job protection. The peaceful demonstration, lasting throughout the morning in front of the Legislative Yuan (li fa yuan), coincided with the delivery of a national policy report by Premier Yu Shyi-kun. Though Yu failed to show up at the demonstration, three other legislators, representing the KMT (Chinese Nationalist Party), the PFP (People First Party), and an independent lawmaker attended. They signed an agreement calling for the revision of the "Statute Governing the Privatization of State-Run Enterprises." "A revision of article five of the statute would compel the government to announce employment conditions six months before the privatization of state enterprises, while changes to article eight would guarantee that pensions and salaries remain unchanged after privatization, " Su reports.
Chunghwa union had claimed that "privatization was playing into the hands of big business," though the chairman of Chunghwa Telecom, Hochen Tan, mitigated the criticism, saying that selling shares by Chunghwa was always fair and open to the public. Chunghwa also admitted that the Executive Yuan was already in the process of drawing up a suitable contract.
Su also mentions that of those union leaders in attendance at the demonstration, some were from abroad, one of whom, Dan Dwyer, a representative from Union Network International, voiced concern that after privatization, telecom "service in rural and unprofitable areas would be abandoned."
In the other article by Fiona Lu, "Reforms of state-owned firms successful, Yu says", Premier Yu Shyi-kun explained that "the key to saving state-owned enterprises from collapse was ending their spendthrift ways." Furthermore, in his speech to the Legislature, he says, "State-owned companies, which had been labeled as money-losing propositions for the government because of their poor operational efficiency, achieved profound improvements over the past two years after overhauling their employee recruitment rules and applying a board-chairman system." Yu added, "State-owned companies can turn loss into profit only by reforming their prodigal operational style. The management style of private companies and their emphasis on controlling costs has been introduced in many state-owned conglomerates." He pointed to two companies in particular (China Shipbuilding and Tang Eng Iron Works), of which, having been "notorious" for losing billions of NT dollars in the past, were now in the red. In addition to reforms of SOEs, Yu is presently calling for legislative support to pass reform bills in helping his DPP administration to realize a seven-point vision: reforming the political system, financial management, monetary management, economy and education; regulation of the media industry; and restructuring the government.
