The International Institute for Management Development (IMD) has raised Taiwan’s ranking by two notches to sixth in the world in its latest World Competitiveness Yearbook, marking the nation’s best performance for the second consecutive year.
The annual report on the world’s 59 most competitive economies, released by the Lausanne, Switzerland-based institute yesterday, saw Switzerland and Taiwan rise up the list.
Hong Kong and the US led the list, while Singapore ranked third, followed by Sweden, Switzerland and Taiwan, the report showed.
Taiwan’s ranking has been raised for the second consecutive year. Last year, IMD raised the nation’s ranking by 15 notches to eighth from 23rd in 2009, the nation’s best performance since 1994.
Government officials yesterday attributed the improvement to last year’s strong economic growth and the signing of the Economic Cooperation Framework Agreement (ECFA) with China.
“The nation’s 10.82 percent economic growth last year put it in third place in the world, further driving up Taiwan’s ranking and competitiveness this year,” Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) told a press briefing.
Besides the effect of the ECFA, increased numbers of Chinese tourists visiting Taiwan, driving up local investment, boosted global corporations’ confidence, Hu said.
The 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-indices.
Taiwan made progress in economic performance and infrastructure, with the former climbing eight places to eighth and the latter rising one place to 16th, while business efficiency remained unchanged in third place, the report said.
However, government efficiency dropped four places to 10th amid rising concerns over businesses being hindered by bureaucracy and state-owned enterprises, Hu said.
“Executives at state-owned enterprises sometimes have to execute specific policies that go against market liberalization but meet public expectations, influencing normal business models,” Hu said.
The nation’s critical financial situation over the next two years would be another factor that brought down the government efficiency ranking, Hu added.
The IMD said the challenge for Taiwan this year is to maintain a sustainable environment and continue normalization of cross-strait economic and trade relations, as well as to promote better corporate governance.