Taiwan New Premier Must Boost Economic Growth, Overhaul Pension

Taiwan President Ma Ying-jeou’s fourth premier in five years faces public pressure to boost economic growth and fix a strained pension system.

Vice Premier Jiang Yi-Huah will succeed Sean Chen after the Lunar New Year break in mid-February, presidential spokesman Fan-Chiang Tai-chi said yesterday.

The resignation of Chen, 63, comes less than three weeks after thousands rallied against the administration, calling on the premier to take responsibility for the slowest economic growth in three years. Ma is battling to boost poor ratings, which have fallen as low as a record 13 percent.

“Jiang’s first and most important task is to communicate Ma’s political will and be sensitive and hear what people are saying,” said Liao Da-chi, director of Taiwan’s National Sun Yat-sen University’s Institute of Political Science.

Taiwan’s benchmark stock index, the Taiex, gained 0.1 percent at the market close in Taiwan on Friday. It has risen 2 percent this year, and is up 8.1 percent in the past six months.

Chen will be appointed as a senior adviser to Ma, and Mao Chi-kuo, the minister of transportation and communications, will become vice premier, Fan-Chiang said.

Taiwan’s premier, the head of the executive branch of government, is appointed by the president and doesn’t have to be confirmed by parliament.

Welfare Strained

Ma said Jan. 30 that his administration would submit proposals for overhauling the island’s pension system to lawmakers in April. Taiwan’s social welfare system, a grievance of tens of thousands of demonstrators who attended a rally on Jan. 13 organized by the opposition Democratic Progressive Party, is under strain, Ma has said.

“The public pension reform is probably the thing the Cabinet needs to work on most for the rest of the term,” said Wu Hui-lin, a research fellow at the Chung-hua Institution for Economic Research. “Taiwan’s approaching its debt limit and the pension system is broken. It needs to regain people’s faith in the government.”

Jiang, 52, is overseeing the pension overhaul. The political scientist and former interior minister received a Ph.D from Yale University and has held advisory positions in the education ministry and the Cabinet’s research division.

Central Bank

Central bank governor Perng Fai-nan, whose term ends next month, will remain in his position, Fan-Chiang said. Chen said at a press briefing yesterday he doesn’t have the ability to take on the role. The Taipei-based weekly magazine The Journalist reported Jan. 30 that Chen was a potential candidate, without saying where it got the information.

Ma, re-elected in January 2012 with 52 percent of the vote, had an approval rating 14 percent in January, according to a poll by Taipei-based television network TVBS. His approval rating between September and December 2012 was at a record low of 13 percent.

Taiwan’s economy grew by 1.25 percent in 2012, the slowest pace since the 2009 global recession, the government said on Jan. 31. Fourth-quarter gross domestic product increased 3.42 percent.

“The most important issue for the new premier is to accelerate the delivery of government plans, particularly for economic stimulus,” said Wai Ho Leong, a Singapore-based economist at Barclays Plc. Taiwan increased its estimate for growth in 2013 to 3.53 percent from 3.15 percent this week.

Chen was appointed premier on Feb. 6 last year after having served as vice premier from May 2010. Previous premiers under Ma include Liu Chao-Shiuan, who stepped down in 2009, and current Vice President Wu Den-Yih.

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