Chang noted that Taiwan remains fairly competitive in terms of world ranking, and was rated No. 5 by the Geneva-based World Economic Forum (WEF) in its Global Competitiveness Report 2005-2006. It trailed only Finland, the US, Sweden and Denmark.
Technology is Taiwan's biggest asset, while unstable policies, an inefficient bureaucracy, the threat of government instability or coups are liabilities, the WEF report said.
"South Korea's leap should be a warning to Taiwan, which should stop feeling so smug about being barely ahead of South Korea in terms of GDP growth and PPP," Chang said.
"But if the government continues to focus on internal or cross-strait conflicts as it has done for the past six years, we will soon lose out to South Korea," he said.
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