Taiwan to shop through the blues

The government has prescribed some retail therapy for the economy. Shoppers in Taiwan will be handed more than $100 (£67) in redeemable vouchers in a government bid to beat the global credit crisis. They will be valid in shops, restaurants and supermarkets in 2009. Prime Minister Liu Chao-shiuan said the handout of T$3,600 to each of Taiwan's 23m people would happen in January. "The worldwide economy will probably be in a downturn for a while, so the coupons are necessary to support us during that time," Mr Liu said. "The programme is aimed at boosting the economy... and is expected to contribute to a 0.64% increase in 2009 GDP," he told a news conference in Taipei. People who donate their coupons will be able to file for tax deductions.

The scheme, proposed by the island's top economics planning body, the Council for Economic Planning and Development, is based on a similar initiative launched by Japan in 1999. Taiwan's economy continued to show signs of slowing in September and in October, exports fell 8.3% on a year earlier. Taiwan's central bank cut interest rates to 2.75% last week - the fourth cut in just over a month. The shopping voucher measure has been passed by Mr Liu's cabinet but still needs legislative approval. But some analysts remained sceptical. Johnny Lee, an analysts at President Securities, told the AFP news agency Taiwan needed permanent solutions. "I think the government should focus on long-term plans to boost consumer confidence, such as lowering commodity prices, improving job securities and reviving the economy," he said.