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United Daily News: Taiwan becoming an economic laggard

2013/06/09 18:16:31

In its annual white paper released last week, the American Chamber of Commerce in Taipei issued a dire warning about Taiwan's possible marginalization while criticizing the Taiwan government's restrictive rules and regulations.

Because of the unfavorable environment created by these constraints, it said, Taiwan ranks second to last among 17 Asian countries -- behind Sri Lanka and ahead of only Pakistan -- in attracting private equity fund investment.

In earlier years, people in Taiwan used to ask: "If Japan can do it, why can't we?" The question implied an intention to do even better. In the last decade or more, however, Taiwan's performance in the economic field has been lackluster, gradually falling behind the other Asian Tigers (Hong Kong, Singapore and South Korea).

Taiwan's economy has fared particularly poorly in the past few years, with difficulties resulting from a worsening brain drain and rising public debt. People are sometimes so pessimistic that they are starting to ask a different set of questions: "Are we becoming like the Philippines?" and "Are we going down the road that Greece has taken?"

However pessimistic people have become, probably no one would have thought that Taiwan would be better than only Pakistan and could not compete with a country like Sri Lanka.

The case cited by AmCham refers to investment by private equity funds, so perhaps we need not overreact. Still, during the era of Taiwan's economic miracle, we achieved higher growth rates than most developing countries. We might not have always been the top leader in terms of economic performance, but we were far ahead of those on the bottom rung of the ladder.

Some people may try to comfort themselves by saying that it was merely a report and that there is no cause for panic. But AmCham's complaints about Taiwan's restrictive business environment have been echoed by Minister without Portfolio Schive Chi. He said the financial services sector contributes less to Taiwan's gross domestic product (GDP) than its counterparts in Hong Kong, Singapore and South Korea.

What is disheartening is that the Financial Supervisory Commission, which is responsible for the regulation of banking and finance in Taiwan, managed to come up with nothing but excuses in response to AmCham's criticism, a reaction that deserves an F, according to Schive. What Schive's comment reflects is anxiety over a Taiwan that is becoming an economic laggard.

Taiwan really needs to get its act together. We do not have one minute to waste. (Editorial abstract -- June 9, 2013)