Thu, May 11, 2006 - Page 11 News List

Taiwan's competitiveness has declined: IMD report

SHOCK RESULT The nation slipped seven places in the latest report complied by the International Institute for Management Development, while China leapt to 19th


Taiwan was rated as the 18th most competitive country in the the latest World Competitiveness Yearbook published by the International Institute for Man- agement Development (IMD), a significant decline from its ranking of 11th last year.

This is the first time in recent years that the nation has seen its competitiveness decline in the IMD ranking.

In previous reports, Taiwan has shown gradual improvement from 20th position in 2002, 17th in 2003 and 12th in 2004.

The IMD report ranks the competitiveness of 60 economies with populations of more than 20 million according to 314 criteria. The top five most competitive countries this year were the US, Hong Kong, Singapore, Iceland and Denmark.

Taiwan's ranking in the Asia-Pacific region also declined, with the nation slipping one-notch to 5th position, behind Hong Kong, Singapore, Australia and Japan.

Factors that contributed to the nation's poor showing included economic performance falling to 27th position from 18th, government efficiency slipping to 24th spot from 19th, business efficiency sliding to 20th from 18th, and infrastructure dropping to 6th from 14th, Switzerland-based IMD said.

Areas in which Taiwan has made progress during the past year include budget deficit as a percentage of GDP, tourism income, the number of broadband Internet subscribers, declining unemployment and direct investment in the local bourse, IMD said.

But problem areas include the consumer price index and net GDP growth per capita. Political risks, public financial management and foreign investors' access to ownership of local companies were the categories that Taiwan performed the worst in, ranking 58th, 56th and 54th respectively, according to the competitiveness report.

South Korea, Taiwan's major competitor, also declined, retreating from 29th to 38th. By contrast, China improved dramatically from 31st to 19th, only one spot behind Taiwan, IMD said.

Yeh Ming-feng (葉明峰), vice chairman of the Council for Economic Planning and Development, said he was very surprised at the large regression, and would analyze the detailed report which will be released by IMD today.

The report's findings may have been skewed by negative reports in the media, Yeh said.

One factor that had probably affected the country's ranking was the consumer debt problem created by irresponsible users of credit and cash cards, Yeh said.

Vice Minister of Economic Affairs Steve Chen (陳瑞隆) said he believed Taiwan's overall competitiveness had improved, but at a slower rate than other countries.

"It's a warning for Taiwan ... we should stay alert and keep putting our best efforts into enhancing our competitive edge," he said.

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