Taiwan slipped 22 places to 51st place out of 123 economies in the "Economic Freedom of the World: 2000 Annual Report," jointly issued recently by the US Cato Institute and Canada's Fraser Institute. In the Asian rankings, Taiwan is now only ranked ahead of China. Taiwan's showings were especially weak in the areas of "business-government relations" and the "rule of law." Taiwan's "rule of law" rankings were lower than even China and African nations.
Of course, most of our officials scoffed at the report, but its findings seem to be borne out by the recent string of government-corporate scandals, as well as the government's "flexible" standards for implementing laws.
The yearly report is based on an index devised by Milton Friedman, and makes use of data provided by research institutes from 53 countries. The year 2000 report is compiled with data from 1997, the the last year for which the economists had complete data. Taiwan's economy that year was influenced by the 1996 missile crisis, as well as by the shock waves of the Asian financial crisis of 1997.
The government threw market principles to the wind, and intervened in the stock market, foreign exchange market and banking system that year to alleviate the effects of the crisis. Short sales of stock were limited; margin ratios were regulated in such a way as to encourage purchases and discourage sales of stocks; banks were "ordered" to slow down on the collection of non-performing loans, etc. All of these measures most likely affected Taiwan's overall rating. Government officials believe that times have changed, and the report's numbers no longer reflect reality.
The government may have since dismantled some of the controls it instituted at the time, but the administration did not learn to respect market principles in its overall economic policy as a result of the Asian financial crisis or the 1996 missile crisis. It's as interventionist and anti-market as ever, as shown by the establishment of the National Stability Fund (國家安定基金) to institutionalize interventions in the stock markets, restrictions on investment trusts from raising funds to invest abroad, pressure on banks to be lenient toward overdue corporate loans, and a dizzying string of government incentives motivated by election concerns.
The recent scandals and mishaps in Taiwan's financial and state sectors have shown the extent of corruption in government, collusion between government and business, and the utter lack of the rule of law.
When legislators "invited" bank managers to invest in their venture capital funds, government officials, usually loth to assist banks in making investments, suddenly changed their tune, not only refusing to help the banks resist the legislators' lobbying efforts, but actually egging them on.
Brazen instances of collusion like this are quite common in Taiwan, and no wonder Taiwan's "rule of law" rankings were lower than even China and African countries.
The "Economic Freedom of the World: 2000 Annual Report" should come as a loud clap of thunder amidst the administration's monotonous drone about its efforts to bring about "economic liberalization" and the "the rule of law" to Taiwan.
The discrepancy between the officials' explanation and the report's findings is just too large. The government should fess up to what it is really doing, and face the problem squarely. Only then will Taiwan be a step closer to its ideal of a civilized society.
Hwang Jyh-dean is an associate professor in the international business department at National Taiwan University.
A series of strong earthquakes in Hualien County not only caused severe damage in Taiwan, but also revealed that China’s power has permeated everywhere. A Taiwanese woman posted on the Internet that she found clips of the earthquake — which were recorded by the security camera in her home — on the Chinese social media platform Xiaohongshu. It is spine-chilling that the problem might be because the security camera was manufactured in China. China has widely collected information, infringed upon public privacy and raised information security threats through various social media platforms, as well as telecommunication and security equipment. Several former TikTok employees revealed
At the same time as more than 30 military aircraft were detected near Taiwan — one of the highest daily incursions this year — with some flying as close as 37 nautical miles (69kms) from the northern city of Keelung, China announced a limited and selected relaxation of restrictions on Taiwanese agricultural exports and tourism, upon receiving a Chinese Nationalist Party (KMT) delegation led by KMT legislative caucus whip Fu Kun-chi (傅崑萁). This demonstrates the two-faced gimmick of China’s “united front” strategy. Despite the strongest earthquake to hit the nation in 25 years striking Hualien on April 3, which caused
In the 2022 book Danger Zone: The Coming Conflict with China, academics Hal Brands and Michael Beckley warned, against conventional wisdom, that it was not a rising China that the US and its allies had to fear, but a declining China. This is because “peaking powers” — nations at the peak of their relative power and staring over the precipice of decline — are particularly dangerous, as they might believe they only have a narrow window of opportunity to grab what they can before decline sets in, they said. The tailwinds that propelled China’s spectacular economic rise over the past
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth