Taiwan's SARS epidemic is about all investors there can talk about these days. It's now the world's third most-infected area, and the economic costs continue to mount.
There may be a silver lining to all this pain and suffering: SARS could boost Taiwan's standing in the world, offering long-term benefits to the economy and encouraging investors to head its way.
Yesterday, the World Health Assembly's annual conference began in Geneva. Among the issues to be discussed is Taiwan's bid for "observer" status in the World Health Organization's highest decision-making body. It's an uphill battle, but the SARS crisis offers Taiwan's people their best shot in years at being recognized by the WHO.
China has long held that it can provide for Taiwan's health needs, and that the WHO has no business meddling in its domestic affairs. That argument had little credibility before the SARS outbreak; now it has none, given how badly China has fumbled its own epidemic.
Beijing will look really, really bad blocking Taiwan's bid for WHO recognition -- another sign it's putting politics above lives. Bad publicity forced China to reverse its initial policy of hiding its outbreak. Most evidence points to SARS beginning in China, and its failure to alert global health officials may have accelerated the disease's spread.
All this has emboldened Taipei to step up efforts to demand representation in the WHO, and Beijing may have little choice but to let it happen. Taiwan should indeed be admitted no matter how much Beijing protests. The health of millions of Taiwanese must come before politics or Beijing's feelings.
It would be another important step toward independence, building on Taiwan's inclusion in the WTO and APEC.
For Taiwan, "SARS is both a small plague and a huge opportunity," says Tom Plate, a professor at the University of California at Los Angeles and director of the non-profit Asia-Pacific Media Network.
Why should investors care? While a WHO nod would be a political signal, it could bring economic benefits. For one thing, it would give Taiwan some much-needed time in the spotlight. For another, it could suggest Beijing is easing its stance toward Taiwan, convincing investors a peaceful resolution between the two is possible.
Any sign the cross-strait quarrel is simmering down might encourage investors to buy Taiwanese stocks and bonds. If corporate executives see light at the end of the tunnel for Taiwan, they may reconsider putting all their interests in China.
If SARS has taught multinational companies anything, it's the danger of putting all their eggs in one proverbial basket -- like China. At a minimum, it may cause a reassessment among investors who've been down on Taiwan and high on China. Taiwan could win some of the foreign direct investment racing to China.
Thanks to China's abysmal handling of SARS, leaders in Taipei are enjoying a level of international acceptance not seen in many years. Last week, Japan's foreign minister and health minister urged the WHO to give Taiwan observer status. The US Congress and EU also have passed resolutions backing Taiwan's WHO bid.
If not for the SARS crisis, it's not clear Taiwan would be receiving such high-level support. And it's about time for a place that has its own government and constitution to get its due from the global community.
There are plenty of risks for Taiwan, too, particularly in the short run. Even if Taipei wins recognition from the WHO, its fortunes are increasingly tied to China's. It's the No. 1 destination for Taiwanese investment and exports. If SARS continues to spread apace in China, Taiwanese growth could be pulled lower, too.
Even though Beijing's spin machine is arguing otherwise, SARS will hurt the economy. Last week it took the unprecedented step of releasing a monthly report on GDP. If you believe the figures, China grew 8.9 percent last month even as SARS and slowing global demand are hurting everywhere else.
Another risk is that Taipei will overplay its hand. Even after the SARS scandal, its 8 percent plus growth rate arms Beijing with considerable leverage around the globe. London, Tokyo and Washington also want China's support on crises in Iraq, North Korea and elsewhere. President Chen Shui-bian (陳水扁) needs to ask Beijing nicely to support his WHO bid.
But if China's SARS epidemic is contained and Taiwan's international standing improves, economic gains are likely. It's as well positioned to gain from the world's most dynamic economy. SARS could be a short-term problem for Taiwan, but a long-term plus.
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