After years of falling global competitiveness, Taiwan is finally showing signs of a rebound, according to two international reports. Taiwan jumped up five places in the recent World Economic Forum (WEF) rankings, the highest the island has achieved in the last four years. In another report released by the Washington-headquartered World Bank Group on September 9th, Taiwan ranks 46th worldwide in terms of the overall business environment for 2009, up 15 places from 61st place in 2008.
Now ranked 12th in the 2009/2010 global competitiveness report released by the Geneva-based WEF on September 8th, the Commercial Times reported that the jump was due to a number of factors, including “encouraging direct foreign investment in Taiwan’s investment law” (jumping to 39th from 64th place) and “easier bank financing” for businesses (advancing 15 positions). Hu Chung-ying, deputy minister of the cabinet-level Council for Economic Planning and Development (CEPD) said the improvement in ranking is related to the government’s removal of China’s investment restrictions, making it easier for business financing and other deregulation measures adopted after the global financial crisis.
However, the Taipei-based China Times pointed out that Taiwan fell to 79th position from its previous 61st in the subcategory of government debt and to 57th position in central government deficit. Taiwan also dropped in the categories of job market and cost of employee layoffs.
The Taipei-based China Post said Taiwan has found itself mired in debt as a cash-strapped government borrowed to finance important infrastructure projects. Added to this, the government recently announced a NT$120 billion (US$3.7 billion) special reconstruction budget to focus on disaster relief in the wake of Typhoon Morakot. All of the money will be borrowed.
In another report by the World Bank Group, Taiwan is ranked 46th this year, an improvement on its ranking of the last three years. The rise can be attributed to the significant progress in the regulatory ease of starting a business, which was up 90 notches to 29th from its previous 119th place.
The “Doing Business 2010” report ranks 183 economies around the world based on an “ease of doing business index” of 10 topics, made up of a variety of indicators, including the time to start a business, the ease of applying for a construction permit, employee hiring, property registration, business financing, protection of investors, paying taxes, trading across borders, contract execution, and closing a business.
Deputy Minister Hu told the United Daily News that international businessmen and investors give great weight to the International Finance Corporation-World Bank report on business environment, and always use it as an important reference in selecting overseas branches.
The report showed that Taiwan achieved great improvement in streamlining its lengthy and complex procedures involved in starting a business, which had been one of the most criticized aspects of Taiwan’s business environment.
In the area of launching a new business in Taiwan, the number of steps companies had to go through was reduced from eight to six, with the average shortened from 43 days to 23 days, making Taiwan one of the countries that need no “minimum capital” to set up a business.
In terms of the ease of paying taxes, Taiwan jumped 10 places to 92nd, by improving on tax collection, including paying taxes via the Internet. Also, the number of payments companies have to make in a given year was lessened from 23 to 18, and the number of hours spent on preparing, filing and paying taxes was reduced from 340 to 281. Other improvements include the ease in hiring employees and cross-border trades.
Among the four Asian Tigers, however, Taiwan still holds the lowest ranking, far behind Singapore (No. 1), Hong Kong (No. 3) and South Korea (No. 17), said the paper. In other Asian economies, Japan ranks 15th and China 89th.
- The Press Division of the Taipei Economic and Cultural Office (TECO) in San Francisco represents the Government Information Office (GIO), Executive Yuan, Republic of China (Taiwan). GIO maintains nine Press Divisions in the United States, including the San Francisco office. The Press Divisions are in charge of promoting Taiwan's public relations and cultural exchanges. This blog is updated by the Press Division, TECO in San Francisco.
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