FROM Taipei to Kaohsiung, Taiwan was raining shopping vouchers on Sunday. Each citizen, young or old, rich or poor, could collect NT3,600 or S$160 in coupons which could be used for practically everything except to pay bills.

The populist policy, part of economy stimulus package that also includes public works spending, has caught on like wildfire since it was announced last November.

The idea is to prop up Taiwan's economy, which is reeling from steep falls in demand for electronics exports, by giving people the incentive to go forth and shop.

While it is too early to tell if the government has met its target of raising Gross Domestic Product growth by 0.64 percentage points, the signs are good.

For once, the folks of an island known for its messy politics put aside their squabbles to pick up their vouchers and start consuming.

The collection rate was a staggering 91.29 per cent, an A star when the authorities were expecting a B.

And the timing was smart too. Many people were in the mood to splurge with a week to go before The Year of the Ox rears its head.

But more crucially, businesses jumped onto the shopping voucher choo-choo train with many creative deals to loosen tight purse strings.

At first the offers were relatively conservative, with NT5,000 worth of goods and services, for example, in exchange for NT3,600 in vouchers.

By the time the vouchers rolled off the presses, many shops were promising double the value, NT7,200 worth of merchandise for NT3,600 coupons. Or even many times more.

Elsewhere, one could even get a three-day Singapore holiday in exchange for NT3,600 in vouchers. This would usually cost about five times more.

Lucky draw prizes offered heaven and literally earth. One county dangled a luxurious apartment, another county offered the chance to be a landowner and yet another said you could have your very own isle.

So much so that a voucher has become more valuable than cash!

When the takings were tallied after the first day of the vouchers, many supermarkets and electronics stores reported sharp increases in sales.

Optimists are now saying that the voucher effect may be greater than GDP growth of 0.64 percentage points. Already, many are asking the island's Gods of Fortune, "Sir, can I have some more (vouchers)?"

Small wonder that a whiff of euphoria surrounds the Cabinet these days, especially as the rings of cash registers drown out calls for a Cabinet reshuffle.

But lest euphoria blinds clear sight, the caveats still stand.

Will the vouchers generate extra spending or will they simply be spent on what people would have spent on anyway, thus reducing the multiplier effect?

Even as murmurs about a second round of vouchers escape into the air, news that UK-based credit ratings agency Fitch Ratings had downgraded Taiwan's credit status from good to negative should give pause for thought.

For Taiwan as a whole has incurred more debt to finance the voucher policy. So unlike what many think, the vouchers are not gifts from heaven, but loans from future generations.

To his credit, President Ma Ying-jeou, who can expect a spike in approval ratings with his 3,600 policy, cautioned that vouchers are an extraordinary measure for extraordinary times, whose oft use may weaken its effect.

And there are also collateral costs.

The burly Interior Minister Liao Liou-yi was reduced to tears when recounting missing vouchers worth an estimated NT5 million.

But the authorities did have unexpected windfalls – dozens of wanted criminals walked right into the waiting arms of the law at voucher pick-up points.

Sigh, who can resist a freebie?

The good news for them is, they can still use the coupons at the prison co-op. Guess in hard times like this, the spending of everyone matters!