A Swiss business institute yesterday lowered Taiwan’s competitiveness ranking by 10 notches, prompting economic officials to blame the drop on the nation’s slumping exports.
In its annual report on the world’s 57 most competitive economies, Lausanne-based business school IMD put Taiwan at No. 23, down from 13th place last year.
Taiwan lagged far behind Hong Kong and Singapore, which traded places as the second and third most competitive economies, the report said.
South Korea advanced four places to No. 27 from No. 31 last year, while China fell three notches to No. 20 from No. 17.
The US, the epicenter of the global financial turmoil, retained its No. 1 ranking and is counted on by IMD to lead an international recovery.
“Even if some regions of the world [such as China] experience some early growth, the one and only key and credible message that the worst is over will come from the US,” IMD said in a statement on its Web site.
IMD assigns scores based on criteria grouped into four main categories — economic performance, government efficiency, business efficiency and infrastructure — each with four or five sub-indexes.
In terms of economic performance, Taiwan fell six rankings to No. 27 from No. 21 last year. The GDP sub-index plummeted 20 notches, while the foreign trade and investment subindexes fell two and six places respectively.
In terms of business efficiency, Taiwan’s ranking fell 12 places to 22nd place from 10th last year. The sub-indexes of industrial output and labor participation fell 18 and 13 places, while the corporate management sub-index dropped eight slots.
In terms of infrastructure, Taiwan fell to 23rd place from No. 17, with the sub-indexes of technology, education and medicine, and environment all sliding between four and eight notches.
The Council for Economic Planning and Development (CEPD) said the sharp contraction in exports in the second half of last year was the main factor behind Taiwan’s lower competitiveness ranking.
The CEPD said in a statement that GDP growth last year was a mere 0.1 percent and the latest IMD report was based primarily on data from last year.
The CEPD said it regretted the drop in the country’s rankings, but added that the situation would improve later this year when the government’s stimulus measures and cross-strait policies would impact the economy.
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