Tue, Jan 25, 2011 - Page 11 News List

Taiwan scores highly in BERI investment survey

OPPORTUNITY KNOCKS:Taiwan has kept its ‘1B’ rating as a favorable investment environment and is classified as the fourth-best investment destination in the world

By Kevin Chen  /  Staff reporter

Taiwan remained the second-best investment destination in Asia and the fourth-best in the world’s major 50 countries, the Ministry of Economic Affairs (MOEA) said yesterday, citing a US-based research institute’s latest report.

With a score of 71 points in the profit opportunity recommendation (POR) category, Taiwan was ranked fourth — behind Singapore and Switzerland (both 78 points) as well as Norway (73) — in the survey conducted by Business Environment Risk Intelligence (BERI) last month, the ministry said. The global average scores were 52.2, the report showed.

BERI surveys the investment climate and competitiveness of the 50 economies in April, August and December every year.

The latest report still provided Taiwan with a “1B” rating among the surveyed economies, classifying the nation as a favorable investment environment. It said Taiwan would see reduced political risks over the next two years, as it develops closer relations with both China and the US.

BERI said Taiwan’s POR scores were likely to increase to 72 this year as the fourth-best investment destination in the world. Its scores would likely stay unchanged until 2015, making it the fifth-best investment destination globally, the report said.

Among Asian economies, Taiwan was second after Singapore, but ahead of Japan (sixth-best in the world), China (15th), Malaysia (17th), South Korea (19th), India (29th), Thailand and the Philippines (both ranked 32nd), Indonesia (36th) and Vietnam (40th).

The BERI survey evaluates a country’s investment environment in three sub-indices: operations risk, political risk and foreign exchange risk.

In the latest report, Taiwan retained it’s third-lowest place in the world in the operations risk index and the second-lowest in Asia, after Singapore. BERI said it predicted Taiwan would retain the third-lowest ranking in this sub-index between this year and 2015 as the economy continues to recover from the 2009 recession.

As for the political risk sub-index, Taiwan remained the 11th-lowest in the world and the second-lowest in Asia in the latest survey.

BERI said political risks were under control and the Chinese Nationalist Party (KMT) had passed a key test by securing three of five mayors in the special municipality elections in November. Supported by an improved cross-strait relationship and the -expectations of further US arms sales to Taiwan, BERI forecast Taiwan’s ranking in this sub-index would remain unchanged over the next five years.

Taiwan also kept its foreign exchange risk in terms of both remittance and repatriation at the third-lowest in the world in the survey, on a par with Singapore, and remained the second-lowest in Asia after Japan, the report said.

However, Taiwan’s foreign exchange risk was likely to see its ranking fall one notch to fourth-best in the world through 2015, because of growing concerns over the “hot money” inflows that have caused the New Taiwan dollar to strengthen against the US currency, BERI said.

Over the past few months, the nation’s financial authorities have adopted various measures to contain these speculative capital inflows, including setting restrictions on foreign investors’ purchases of Taiwan’s short-term notes.

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