The nation’s global competitiveness has climbed two notches to 13th place this year, thanks to a top ranking in economic stability as authorities effectively kept inflation and government debt at bay, according to a World Economic Forum (WEF) report released yesterday.
The improvement came after the Geneva, Switzerland-based organization adopted a new methodology to better capture an emerging set of drivers on productivity and growth in the era of the “fourth industrial revolution.”
Taiwan was the fourth-best performer in the Asia-Pacific region after Singapore (second), Japan (fifth) and Hong Kong (seventh), but ahead of Australia (14th), South Korea (15th), New Zealand (18th) and China (28th).
The WEF measured 140 economies using 98 indicators grouped under 12 major groups.
The US earned top spot on its market size, stability and innovation ecosystem — including idea generation, entrepreneurial culture, openness and agility.
Taiwan won the top spot in macroeconomic stability with a 10-year GDP average of 2.6 percent, supported by benign inflation and low government debt.
East Asia and Pacific economies including Taiwan were the fastest-growing in the world and drove about one-third of global growth last year, primarily due to China’s contribution, the WEF report said.
The region’s developing economies grew 6.6 percent, owing to a favorable global economic outlook that encouraged a rise in exports, it said.
Most boast world-class physical and digital infrastructure and connectivity, macroeconomic stability, strong human capital and well-developed financial systems, although performance on the innovation ecosystem is uneven, it said.
Taiwan was fourth in innovation capability with room for improvement in multi-stakeholder collaboration and scientific publications, it said. Meanwhile, its research and development expenditure has stagnated against GDP.
“The region’s innovation hubs — Japan, [South] Korea, and Taiwan — could improve on the so-called ‘softer’ drivers of innovation to attain the level of ‘super innovators’ such as Germany, the US and Switzerland,” it said.
The nation’s infrastructure score declined from last year, as the indices on the reliability of water supply, quality of roads and airport connectivity fell, it said.
Taiwan achieved seventh place in financial system performance, thanks to the world’s lowest non-performing loans and the highest insurance premiums against GDP, the report found.
The WEF’s findings lent support to the government’s New Southbound Policy as South Asia remains the region with the lowest trade penetration in the world, with imports and exports of both services and merchandise amounting to 39 percent of regional GDP last year.
The report also called for openness in global trade, saying liberalization is good for competitiveness and not necessarily bad for inclusion.
“International trade helps drive down wages and employment in the manufacturing sectors most exposed to foreign competition, but protectionist policies to curb income inequalities would be ineffective and counterproductive,” it said.
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