Foreign firms bearish on outlook

RED TAPE::Government bureaucracy was highlighted as a concern throughout the AmCham survey and as a major impediment to business over the past two years

By Crystal Hsu  /  Staff reporter

Fri, Jan 18, 2013 - Page 13

Fewer foreign companies are optimistic about Taiwan’s long-term business outlook, although many plan to increase investment this year and are forecasting growth in revenues and profits, a survey by the American Chamber of Commerce (AmCham) in Taipei showed yesterday.

The annual poll indicated a sustained shortage of human resources, inconsistent interpretations of regulations by government agencies and excessive bureaucracy, newly installed AmCham chairman Alan Eusden said.

“There is a continued decline in the level of optimism about the five-year business outlook in Taiwan,” Eusden said, after respondents giving optimistic views dropped to 56 percent from 70 percent last year and 81 percent in 2011.

The trend, while partly attributable to lingering uncertainty over the global economy, reflects concern as to whether Taiwan will respond quickly enough to challenges to its competitiveness, Eusden said.

The respondents, mostly chief executives from AmCham member companies who were polled in November and last month, cited human resources, regulatory interpretations and government bureaucracy as major areas of concern.

“More must be done to streamline procedures and simplify regulations,” the survey concluded.

Government bureaucracy was highlighted as a concern throughout the survey, and as a major impediment to business over the past two years, and is the principle area policymakers should tackle aggressively, the survey said.

However, 52 percent of respondents expected to increase investment in Taiwan this year, up from 43 percent last year, even though business profitability has declined over the past several years, the survey found.

About 66 percent of member firms said they were profitable last year, while 31 percent predicted they would break even or register minor losses this year, compared with 24 percent a year earlier.

Asked how Taiwan fits into their global entity’s investment plans, 45 percent of respondents said the nation was “not a high priority,” the survey said.

“As AmCham noted in previous years, Taiwan needs to better position and market itself to gain global attention and to improve the investment climate to enhance its attractiveness,” the survey said.

The group recommended changes to taxation rates, improvements to foreign direct investment rules and incentives, and greater research and development incentives.

Respondents acknowledged the benefits of the Economic Cooperation Framework Agreement, with 60 percent of respondents seeing it as having “some positive effects,” up from 46 percent last year, while the number of respondents rating it as having a “very positive effect” dropped to 13 percent from 30 percent last year, the survey showed.

The group also called for greater efforts to facilitate trade talks with Washington under the Trade and Investment Framework Agreement, with 62 percent viewing a delay in the talks as harmful to their business, up from 53 percent a year ago, the survey showed.