Fri, May 16, 2003 - Page 10 News List

Firms don't agree with surveys

LOCAL PERSPECTIVE Foreign businessmen are saying that recent reports which label Taiwan as one of the world's leading economies ignore many important factors

By Bill Heaney  /  STAFF REPORTER

Foreign businesses in Taiwan had mixed reactions to reports that the nation is one of the most competitive in the world yesterday, with one pundit even saying the reports were "gobbledygook."

On Wednesday, US-based research institute Business Environment Risk Intelligence (BERI) ranked Taiwan number four in the world in terms of competitiveness tied, with Japan. Meanwhile, the Swiss business school IMD International placed the country in sixth place ahead of the UK, France and Spain.

One executive asserted competitiveness here is hampered by bureaucracy.

"The rules here are too restrictive," said Charles Kruse, president of French hypermarket developers Ai Mai Geant Taiwan plc.

"It is hard to meet the zoning requirements of Taipei City ? opening a hypermarket [here] is more difficult than in Thailand. I opened 13 stores there with no problem," he said.

Hypermarket shoppers in the capital are forced to travel to suburbs like Neihu or even Taipei County, Kruse said.

Shipping companies have a better environment to operate in here, but it is still far from competitive, according to Jeroen Rozendal, president of Dutch shipping company, Vopak Logistic Service.

"Customs requirements are a problem when compared to Hong Kong and Singapore which operate free ports," he said.

"Valuable hours are wasted on customs paperwork in Taiwan," he said.

Kaohsiung and Keelung are expected to open free ports -- free from customs requirements -- sometime this year.

Taxation of off-shore companies and the absence of direct shipping links to China also restrict Taiwan's competitiveness, Rozendahl said.

One economist dismissed the two reports entirely yesterday.

"These reports are gobbledygook -- complete nonsense," said John Pickles, president of Asian Pacific Research Ltd in Taipei.

"Goodness knows why people subscribe to them. Japan has been in recession for the last 10 years, and Taiwan was in recession last year. How can they be rated as competitive?" he said.

Far from being competitive, investment in Taiwan has plummeted as a result of the world economic climate, a slowdown in the US, and China taking a major proportion of global foreign direct investment.

"There are many things the government could do to improve the environment. Dropping the ban on direct links to China would be a major one," Pickles said.

But Taiwan has major competitive advantages over other economies in the region.

"The cost of storage space is a lot cheaper and more readily available than in Hong Kong or Singapore," Rozendahl said.

"Taiwan also has a large skilled workforce that speaks the same language as its major market, China," he said.

In addition, Kaohsiung and Keelung are much closer to major Asian markets such as China, Japan and South Korea than Singapore, and labor disputes like the one currently blocking South Korean ports are unheard of, Rozendahl said.

Meanwhile, government officials had nothing but praise for the annual reports. Taiwan's competitive environment is a result of policies that stretch back 30 years, Council for Economic Planning and Development Vice Chairwoman Ho Mei-yueh (何美玥) said.

"For more than 30 years we have continuously invested in research and the education system, and supported technology and science," she said.

The investment has created a skilled workforce that is able to turn ideas from overseas rapidly into products, she said.

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