Nation's competitiveness shows room for improvement, WEF economist says

Taiwan's competitiveness ranking still has room to grow should the government further enhance efficiency, Augusto Lopez-Claros, chief economist at the World Economic Forum (WEF), said yesterday in Taipei.

In its annual poll of 104 countries, the Geneva-based WEF last month ranked Taiwan No.4 for competitiveness among the world's nations, and the highest among Asian countries. The top spot went to Finland, followed by the US and Sweden.

Lopez-Claros, who is also director of the WEF's Global Competitiveness Program, was in town yesterday at the invitation of the Chinese-language magazine Global Views Monthly (遠見雜誌) to give a speech, entitled "The Changing Shape of Competitiveness in Taiwan: A view from the World Economic Forum."

"Taiwan has made an impressive achievement on the technology side, but has room to improve on the public institution side," Lopez-Claros said.

Among the ranking's three sub-indexes, which are technology, macroeconomic environment and public institutions, Taiwan held the second spot in technology, was ninth in macroenvironment, and 27th in public institutions.

Lopez-Claros said one immediate reason for the comparatively poor performance in public institutions may be the huge budget deficit.

Taiwan's government is running a budget deficit off NT$292.9 billion this year.

According to the WEF's report, unstable policies, an inefficient bureaucracy, the threat of government instability or coups, tax regulations, as well as inadequate infrastructure were major problems for doing business in Taiwan.

Responding to Lopez-Claros' comments, Vincent Siew (蕭萬長), chairman of the Chung-Hua Institution for Economic Research (中經院), who also attended the event as a speaker, said the lack of stability in the cross-strait relationship and conflict between the nation's two major political camps should take the blame.

"We should not ignore the fact that China is one of the strongest economies in the world nowadays? what we should do is to reduce barriers and help forward cooperation between the two sides," Siew said.

Another speaker, Acer Group chairman and CEO Stan Shih (施振榮), said the business community's greatest concerns are the cross-strait relationship and political confrontation, which have wasted a lot of public resources.

Shih, however, said the WEF had overvalued Taiwan's technological capability. The nation exports a large number of high-tech products, but has not effectively applied them in other sectors, he said.

The service industry, for example, should apply technology, which could enhance the sector's efficiency, he said.

In concluding his speech, Lopez-Claros said Taiwan and China should put aside politics and recognize the common interests of both sides in this era of globalization.

Lopez-Claros said EU members have reported the highest per capita income in the world in the past years due to economic integration, and this is a model that Taiwan and China could follow.