The nation’s global competitiveness moved up one notch to 12th place this year, aided by a top ranking in macroeconomic stability and a strong showing in innovative capacity, according to a World Economic Forum report released yesterday.
The Geneva, Switzerland-based organization rated 141 economies through 103 indicators grouped into 12 themes, including health, financial system, market size, business dynamism and capacity to innovate.
Taiwan was the fourth-best performer in the Asia-Pacific region after Singapore (first), Hong Kong (third) and Japan (sixth), but ahead of South Korea (13th) and China (28th).
The results showed that the Asia-Pacific region the world’s most competitive, followed closely by Europe and North America.
Taiwan retained its top ranking in macroeconomic stability, thanks to stable inflation and average long-term GDP growth of 3 percent, despite global headwinds, the report said.
“The world is at a social, environmental and economic tipping point where subdued growth, rising inequalities and accelerating climate change provide the context for a backlash against capitalism, globalization, technology, and elites,” the report said.
This year has seen gridlock in the international governance system, while escalating trade and geopolitical tensions are fueling uncertainty, it added.
This holds back investment and increases the risk of supply shocks: disruptions to global supply chains, sudden price spikes or interruptions in the availability of key resources, the report said.
Against that backdrop, a survey of 13,000 business executives highlighted deep uncertainty and low confidence, it said.
However, some of this year’s better performing economies, such as Singapore and Vietnam, appear to be benefiting from global trade tensions through trade diversion, the report said.
Taiwan had also emerged unscathed due to a sharp increase in private investment by local companies moving production lines out of China to avoid heavy tariffs on goods bound for the US.
The nation was ranked fourth in terms of innovative capability, with strong scores in research and development expenditure, patent applications, cluster development and diversity of the workforce.
The report lamented a lack of global productivity growth over the past 10 years, calling it a “lost decade,” and while a US$10 trillion injection by central banks had succeeded in averting a deeper recession, it was not enough to catalyze the allocation of resources toward productivity enhancing investments in the private and public sectors.
The injection of cash by the world’s four biggest central banks might have had the effect of diverting more capital toward financial markets rather than to productivity-enhancing investments, the report said.
The National Development Council said that it would examine the report and take steps to improve the nation’s competitiveness where necessary.
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