Fri, May 11, 2007 page11

• Taiwan slips on IMD list

  YEARBOOK VERDICT The government has things to be happy about, but the fact that overall Taiwan is slipping in competitiveness has led to finger-pointing

  • By Jessie Ho / STAFF REPORTER
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  For more than three decades, Taiwanese have been proud of the nation's exceptional economic strength and dominance in the world's high-tech manufacturing industry.

  With minimal resources, an economic fable was created on the back of greater than 10 percent growth in GDP during the 1970s.

  Confidence in the nation's economy has been sustained in recent years, even after the emergence of China as a huge economic player.

  But the release of the latest IMD World Competitiveness Yearbook yesterday may give some observers reason to pause.

  In the IMD's scoreboard of 55 countries' competitiveness, China for the first time surpassed Taiwan as a more competitive country to do business. China moved up from No. 18 to No. 15, while Taiwan fell from No. 17 to No. 18.

  On the four major factors, Taiwan saw economic performance improve to No. 16 from No. 25 last year, government efficiency improved to No. 20 from No. 23, while business efficiency fell to No. 17 from No. 13 and infrastructure declined from No. 18 to No. 21.

  IMPROVING

  The yearbook said Taiwan is improving and is categorized in the groups of countries that are "catching up" to the leader, the US, compared with another group of countries that are "losing ground."

  "Taiwan halted its downward fall of last year, now maintaining competitiveness despite the more difficult global environment and in the face of a fast-growing China and other emerging nations," Suzanne Rosselet, deputy director of IMD World Competitiveness Center, wrote in an e-mail to the Taipei Times yesterday.

  "Most likely, Taiwan may even be `riding the wave' of China's high growth, finding opportunities for investment and others," she wrote.

  Rosselet's comment was encouraging, but the government sought accountability elsewhere for the IMD poll result.

  Council of Economic Planning and Development Chairwoman Ho Mei-yueh (何美玥) attributed the decline mainly to the around-the-clock protest campaign to oust President Chen Shui-bian (陳水扁) last September and October, while the Ministry of Economic Affairs said the slide resulted from "non-economic factors."

  Rosselet said the reasons for Taiwan's decline included difficulty in maintaining high attractiveness for investment because of uncertainty in the political and business environment, and obstacles hindering the ability of enterprises to compete, such as over-regulation.

  The ranking for government efficiency, though up three notches to No. 20, was still too low, demonstrating continuing poor faith in the government's ability to create an environment that supports the competitiveness of business, Rosselet said.

  The government prefers to compare itself with neighboring nations to show that Taiwan still has a vibrant economy even in the face of an expanding China, but the fact is that Taiwan's GDP last year was the lowest among the four little dragons at 4.62 percent.

  RIVALS

  Singapore, a city state with even less resources than Taiwan, reported a stunning 7.9 percent growth in GDP last year and was graded by IMD as the world's second most competitive country, while Hong Kong's GDP stood at 6.8 percent last year and ranked No. 3 in the competitiveness chart.

  South Korea, which has long been considered the smallest dragon of the four, saw 5 percent GDP growth last year, with competitiveness advancing from No. 32 to No. 29.

  The government can derive some satisfaction from its current economic performance considering the progress of overall industrial development, but it will also need to look more carefully at warning signs, as once evenly matched competitors move farther into the lead, and as laggards catch up.
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