Free vouchers to spur economy

Sun Jan 18,2009

TAIPEI, Taiwan – The government began Sunday to distribute spending vouchers to all Taiwanese, hoping the move could spur a buying spree across the island to help prop up the slowing economy.

Taiwan's economy has been undermined by the global economic slump, with demand for the island's high-tech exports dropping sharply in industrialized countries such as the United States. Long lines queued up Sunday at dispense centers where each person is handed a stack of vouchers valued at 3,600 New Taiwan dollars ($108). Many people then went straight to department stores or supermarkets to buy up daily necessities.

The government is giving away a total of NT$80 billion ($2.5 billion) worth of vouchers to each of the island's 23 million population. The measures were meant mainly to boost retail sales. But other businesses suffering faltering sales — from airlines, amusement parks, hotels, restaurants to publishing houses — also offer discount rates to attract consumers.

About 20 publishing houses joined hands to solicit subscribers, offering a year's subscription for any two magazines with NT$1,200 worth of vouchers."While you save the economy, you must also save our culture," said publisher Tuan Chung-chi. After collecting vouchers for his family of four, Taichung mayor Jason Hu said he will buy a fitness machine and then donate it to an orphanage.

In November, the Taiwan government projected a 2.12 percent economic growth for 2009, depending that various stimulus packages, such as attracting more Chinese tourists, could reach their targets. Several research groups, however, predict the economy could contract as much as 2 percent this year.

When authorities first unveiled the voucher plan in November, they said the measures were expected to add more than 0.6 percentage point to the GDP growth rate. But Vice President Vincent Siew said the vouchers' impact on the domestic economy may not be as great, with the world economic prospects looking gloomier now."We would be happy if the extra retail sales generated could slow a steeper decline of the economy," Siew said.

(Source: Yahoonews)