The jostling of late for dominance among the various economies around the world seems to have picked up pace.
In Taiwan, weak Lunar New Year consumption and poor first-quarter export figures, together with the non-return of Taiwanese investors from China, have forced the Directorate-General of Budget, Accounting and Statistics to readjust its annual economic growth rate forecast downward to below 3 percent.
Every year, the Lausanne-based International Institute for Management Development releases its World Competitiveness Rankings.
According to the just-released rankings for this year, Taiwan has slipped to 11th place, from seventh place last year, and this has stirred up considerable attention and heated debate in many quarters.
It comes at a time when Taiwanese are racking their brains trying to come up with an answer to economic woes.
As such, the news of the nation’s drop in the world competitiveness rankings was met with dismay by the government and the opposition parties alike.
What, they asked, is to be done?
First, international rankings are little more than an excuse to brag about how well a country is doing.
The top five countries and territories in this year’s list — the US, Switzerland, Hong Kong, Sweden and Singapore — were in much the same positions last year, save some minor jostling between them.
The countries in sixth through 10th place last year — Canada, Taiwan, Norway, Germany and Qatar — were changed only by the introduction of a wild card this year: the United Arab Emirates (UAE), which jumped from 16th to eighth place and squeezed out one of last year’s pack from the top 10.
Unfortunately, that happened to be Taiwan.
Second, there has been conspicuous drops — of two places or more — in the rankings over the past two years of several countries: Finland, the Netherlands, Iceland and Taiwan. The Netherlands slipped from 11th to 14th place.
In that same period, the UAE, Ireland, Japan and Thailand have climbed two or more places in the rankings.
Of these countries, Japan and Thailand were emerging from the shadows of natural disasters, and Ireland — in contrast to Iceland, which opted for fierce protests — clung to its credit standing and status as a financial center.
Finally, there has been little significant change in the top 30 countries in the rankings since the 1997 East Asian Financial Crisis.
Taiwan and the Netherlands are in a comparable position vis-a-vis their neighboring countries and their lack of natural resources.
From the outset, they have had to rely on imported raw materials to produce goods for export.
They have also had to rely on the export of capital and management skills.
However, over the past 15 years, Taiwan has progressed up the rankings, jumping from 18th to seventh place, a feat to which only Germany, Switzerland and Sweden could lay claim.
The Netherlands, which to a great extent relies on its shipping industry, fell from fourth place to 14th place in that period, a precipitous drop matched by Japan, Finland, the UK and New Zealand.
Clearly, then, there is no reason for politicians on either side of the political divide to lose confidence in Taiwan’s future simply on the back of the adjustment in the world rankings.
Germany, Switzerland and Sweden have been able to make rapid, stable progress and strive for a peaceful future.
For example, Germany has used its robust small and medium-sized business sectors to strengthen the reputation of the country’s manufacturing industry, while Switzerland has attracted the attention of investors and won consumers’ trust and respect.
As far as economic development in the medium to long term is concerned, Taiwan is well-placed within the region, and continues to hold an advantage in foreign investment and technology exports.
In addition, people are becoming increasingly aware of the need to fight corruption in our politics, and this attitude has already taken root in Taiwanese society.
Taiwan will find a way to address environmental conservation and sustainability, the problems in the pension funds and the need for judicial reform.
Taiwan is going to be fine.
Lu Hsin-chang is an associate professor of international business at National Taiwan University.
Translated by Paul Cooper