Taiwan Privitization
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The Asian economic market is a highly competitive quickly advancing financial theater. Many countries are in direct proximity and competing for the same market factions of customers. A slight edge in a particular aspect of business, or the vantage of accessibility to a specific demographic at any given time could prove fruitful or deadly to an entrepreneurial firm within the market, and control the fates of not only the employees to which the economy relies on, but on foreign and domestic investors within this complex system. Prior to 1996, the Taiwanese government was the controlling investor, and overwhelming monarchy on the industrial and financial controls set forth by their legislature, calculating the overall fate and economic prosperity associated within their domestic trade and national industry. This has lead to gross overspending creating government budget deficits and low productivity levels.
The government in matters of fiscal affairs has pursed previously a role of “big brother.” Facilitating all executive functions of domestic corporations and hindered their ability to compete with global markets and competition within their respected industries. Upper level management and boards across many industries are being selected by this majority stockowner, and forced to adhere to the wishes of a deaf shareholder. A government deregulation of industry, dubbed as the privatization of these companies, has set forth strict guidelines as to the ownership allowed in ascertaining controlling shares of these stocks. Many firms are restricted as to allowing only marginal availability of their stocks to foreign investors, typically 20%. This stifles the ability of the government to deregulate the leadership of these companies by still holding a controlling stake in the company in question. In other words, the privatization of some companies is without merit due to the legislatures ability to restrict the amount of stock available for purchase.
Labor unions have not aided in the privatization movement either. Many unions have blocked legislation and the deregulation of these national industries based on the assumed decline in employment. In some cases, companies are over-staffed by nearly 30%, wasting monetary resources to fund this high employment capacity and in turn create gross overspending on the financial end of day-to-day operations. This can all be traced back to the Asian financial crisis of 1997, which severely weakened Asian markets by making it difficult for companies to attract investors into upstart Taiwanese firms despite their entrepreneurial stimulated base.
The continuation of these practices forecast no change in the socio-economic scales and speed to which Taiwanese enterprises will be deregulated, only subjecting a small percentage of firms to privatize and earn profitable dividends. The government is trying to find a middle ground in allowing foreign investors to infiltrate this foundering economy by subsidizing small percentages of a companys stock base. Specifically, Chunghwa Telecom was allowed to deregulate a small percentage of its stock ownership to outside investors, but under government regulation that below 20% of their total stock assets is available to foreign patrons. This only resulted in a 5% off shore ownership sold on the open market of the total existing shares.
In recent events, the Taiwanese government has seen nothing but anti-privatization upstarts concerning their deregulation efforts. Following a massive disintegration of their assets into the private sector, a large faction of demonstrators marched on key political branches voicing their opinions on the movement toward privatization. Many