Sat, Jan 26, 2019 - Page 1 News List

Heritage ranks economy 10th-freest in the world

RESILIENCE:Taiwan must boost competitiveness and openness to reduce its dependence on China, which threatens its overseas presence, the foundation said

By Crystal Hsu  /  Staff reporter

Taiwan’s economic freedom is ranked the 10th worldwide in the Heritage Foundation’s 2019 Index of Economic Freedom. This file photo shows an Evergreen Marine container ship approaching Kaohsiung Port on Aug. 7, 2017.

Photo: Reuters

Taiwan’s economy is the 10th-freest in the world this year as improvements in labor and monetary freedom more than offset declining scores for government integrity and tax burden, an annual survey by major US think tank the Heritage Foundation showed.

The showing was the strongest since 2008 and a three-notch improvement from a year earlier, the foundation said on its Web site.

The index covers 12 freedoms, from property rights to financial freedom, in 186 nations.

With its overall score climbing to 77.3 this year, Taiwan was ranked fifth among 43 nations in the Asia-Pacific region and its overall score was above the regional and world averages, the foundation said.

The nation gained points in labor, trade and monetary freedom, as well as judicial effectiveness, but lost points on government integrity and tax burden, it said.

“That is because Taiwan eased labor and recruitment rules last year to allow companies and employees greater flexibility,” the National Development Council said yesterday, adding that the nation also raised the corporate income tax from 17 percent to 20 percent to help make the distribution of wealth more equitable.

A relatively well-developed commercial code and open-market policies that facilitate the flow of goods and capital have made small and medium-size enterprises the backbone of Taiwan’s economic expansion, the foundation said, adding that a sound legal framework protects property rights and upholds the rule of law.

However, Taiwan will need to increase competitiveness and openness by reducing its strategic involvement in the export sector and liberalize regulation of the fragmented financial sector if it is to achieve its goal of reducing dependence on China by increasing commerce with other Asian nations, the foundation said.

Taiwan’s economy has been driven largely by industrial manufacturing, especially exports of electronics, machinery and petrochemicals, it said.

The nation has relied heavily on its economic relationship with China, but has shown resilience in the face of Chinese economic pressure, it added.

China’s ongoing attempts to isolate Taiwan diplomatically threaten the nation’s long-term ability to maintain its presence in overseas markets, the think tank said.

A low birthrate and a rapidly aging population pose demographic challenges, it said.

Taiwan’s judiciary system is independent and largely free of political interference, it added.

“Corruption is much less prevalent today, but remains a problem,” the foundation said. “Politics and big business are closely intertwined, creating opportunities for malfeasance in government procurement.”

The financial sector has continued to evolve and the stock market is open to foreign participation, it said.

Taiwan put up flat showings in business, investment and financial freedom.

Hong Kong ranked No. 1 in economic freedom, followed by Singapore and New Zealand.

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