Openness is the key to making rapid economic progress, with Taiwan and Asia's other "tiger" economies as the best proof, Edward Prescott, the recipient of last year's Nobel Prize in economics, said in Taipei yesterday.
"Openness and competition are more important and critical than trade volumes for catching up" to more highly developed countries, Prescott said. He added that Taiwan and four other Asian economies, including South Korea and Singapore, have become rich after adopting open policies decades ago.
Decentralization is necessary to help foster higher production efficiency, while centralized economic control usually blocks the adoption of better production processes, he said.
Prescott, a senior adviser to the US Federal Reserve Bank of Minneapolis, made the remarks in the keynote speech at a forum sponsored by Chinatrust Financial Holdings (
Government officials, including Vice Premier Wu Rong-I (
Taiwan's open economic policies helped the nation's GDP jump more than 20 percent in the decade between 1993 and 2003, Prescott said.
Meanwhile, China's gradual opening up of its economy has allowed its GDP to skyrocket by 60 percent during the same period of time, the Nobel laureate said, adding that he expected the country's strong growth to continue.
Echoing the pundit, Hu said that Taiwan has done well after embracing an opening-up policy, and scored 11 in a global ranking of national competitiveness by the IMD Business School.
Reforming the nation's financial sector through market liberalization and consolidation of the crowded banking industry is now high on Taiwan's agenda, Wu said.
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