The Political and Economic Implications from Taiwan’s Covid-19 resilience performance

Written by Chun-Chien Kuo.

Image credit: 總統至中央流行疫情指揮中心進行「疫苗進度視訊簡報」 by 總統府/Flickr, license CC BY 2.0

According to the latest Bloomberg Covid-19 Resilience Report, Taiwan’s ranking has slumped to 44th place in June from the 15th in May. Meanwhile, the support rates for President Tsai have declined dramatically. Taiwan had successfully controlled the Covid-19 virus for more than one year under the strict border control, and people had been luckily enjoying the near normal life without lockdown elsewhere. The economy gained positive momentum both from strong export and little affected domestic activities. The CECC Commander Chen, President Tsai and DPP (Democratic Progressive Party) had been rewarded with high political support for their well performance in fighting the Covid-19 virus. However, the April 15th revised loosen 3+11 (3 home quarantine days plus 11 autonomous health management days) border control policy for the pilot and crew members created a leakage to bring covid-19 virus alpha variant into the community in Taiwan in late April. The later “sexy tea gathering” added flames to accelerate the spread of this outbreak into the community. Taiwan has been under third-degree restriction nationwide since May 19th, with people ‘s lives and the domestic economy facing unexpected changes. Taiwan faces a tough challenge from the new Covid-19 virus alpha and delta variant intruding into the community. There is difficulty in transitioning from its past tactics involved in tackling covid-19 and its past success both from the public and government. The government and public should forget the zero-community infection scenario and make cautious adjustments to fight in this new battle. The government’s responses in handling this new situation bring up some political and economic implications in Taiwan.

There are some political implications in this new battle. First, this sudden outbreak reveals the inadequate and inflexible vaccination policy for Tsai’s government. Slow in importing WHO recognized international vaccination and put hopes on the not well tested domestic vaccination has created tremendous anxieties from people. Establishing and promoting domestic produced vaccine capacity seems a good long-run policy priority only under the precondition of a well-controlled situation with zero community before the outbreak in May. The government’s inflexibility and slowness in its vaccine policy adjustment led to the plumped public support and trust for President Tsai and CECC (Central Epidemic Command Centre). Second, the increased community infections and the shortage of available vaccines make the local and central governments more difficult, according to this new fight. The differences in carrying out prevention measures and vaccine injection priority lead to different local government performances. It becomes a new tested political platform for parties for the upcoming 2022 local election. Both Taipei Mayor Ko and the New Taipei City Mayor Ho have increased public support in contrast with the falling supports for the DPP mayors and President Tsai. Third, political support is positively related to government performance. If the central government can readjust its vaccine and border control policies to meet the public needs, it may regain some political support later. The CECC starts to move in the right direction in tightening the border control again since July 2nd, while the effort to import enough WHO recognized vaccines is still slow in meeting people’s urgent needs.

Under the Covid-19 pandemics, governments worldwide face the trade-off between the degree of restriction and the reopening of the economy. Many countries had experienced repeat switches from lockdown and reopening. Despite the sudden shrinkage of domestic economic activities in this new outbreak, Taiwan maintains strong exports, especially in the ICT sectors. The most hurt sector are restaurants because no dining inside is allowed under current restrictions. The closure of most tourist spots nationwide also makes the hotel business dimmer as domestic tourism cools down. However, some businesses have gained indirectly under restrictions such as food delivery, parcel delivery, and the related webinar and distancing teaching equipment such as web cameras, speakers, earphones, and Notebooks due to the sudden school closure. A big surprise is the revival of airlines. It adds more flights to the US, Guam, and China recently to cope with increased demand for people to fly out for vaccination due to the current inadequate vaccine and slow vaccination pace in Taiwan. The main economic implication from this outbreak is that Taiwan can learn from other countries’ experiences: we are racing with time to fight against the virus variations. The key to resume economic activities back to near normal is to prevent the virus from widespread. Extended and large-scale screens, tighter border control and a higher population vaccination ratio, can help.

Taiwan’s economy and politics depend significantly on the government’s responses in fighting this new wave of community outbreaks. The ruling party must make the necessary adjustments quickly to contain the virus from spreading as soon as possible. It should expedite importing WHO recognized vaccines and let more people injected to ease people’s fears and anxieties. It can still buy time to nourish and support Taiwan’s domestic vaccine production to go through all the necessary tests in meeting the WHO standards. A domestically produced vaccine can be treated as the future strategic reserve in fighting Covid-19. Although the vaccinated ratio in Taiwan has increased gradually after receiving donations from Japan’s 2.24 million and Lithuania’s 20,000 AZ, US’s 1.75 million BNT vaccinations, it is still far behind the internationally recognized 60-75% vaccinated rate needed for herd immunity. There is only 8.3% population vaccinated so far, and the low vaccination ratio is the main reason for Taiwan’s plumped ranking in the latest Covid-19 resilience performance. “We are living on the same island with the same fate” echoes the interdependences for all the Taiwan residents economically and politically. All the political parties, including the ruling party, should do their best to meet the public needs and help Taiwan put the Covid-19 virus under control sooner. To sum up, this community outbreak is a crucial test for all the political parties, and their relevant performances will be graded in next years’ local elections in Taiwan.

Chun-Chien Kuo received his Economics PhD from the University of California, Davis, in 1999. He is currently serving as Professor at the Department of International Business, National Taipei University of Business, Taiwan.

This article was published as part of a special issue on Taiwan’s Covid-19 Spike.

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