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Taiwan’s economy
lagging behind rivals: AmCham
MARKET ACCESS: The government needs to establish
clear criteria for evaluating investment proposals and setting timetables for
regulatory decisions, the group said
By Crystal Hsu / Staff reporter
Taiwan is underperforming as a destination for foreign investment, lagging
behind traditional and emerging competitors in the region chiefly due to
difficult access, the American Chamber of Commerce (AmCham) in Taipei said
yesterday.
The trade group made the statement and a string of policy recommendations at a
press conference to announce its annual white paper titled “Taiwan at a
Crossroads.”
AmCham said the coming year will be crucial in determining Taiwan’s economic
future and warned that the nation risks losing out to its regional competitors
if economic reform and liberalization are not enacted swiftly.
Approved foreign direct investment in Taiwan was US$5.56 billion last year,
higher than the US$3.81 billion in 2010 and US$4.96 billion in 2011, but much
lower than that of Thailand, Vietnam, Indonesia, Hong Kong and Singapore, AmCham
chairman Alan Eusden said.
South Korea, with which Taiwan is most often compared, drew US$16.3 billion in
foreign direct investment last year, Eusden said.
“The Ministry of Economic Affairs (MOEA) should thoroughly re-evaluate the
foreign investment application approval process,” Eusden said, adding that
government agencies should publish clear and comprehensive criteria for
assessing investment proposals with specific timetables for regulatory
decisions.
Taiwan scared away US$20 billion of foreign investment in June 2011 when it
rejected private equity fund Orion Investment Co’s (遨睿投資) buyout of Yageo Corp
(國巨), Taiwan’s biggest maker of passive components used in electronics, said
William Bryson, head of AmCham’s private equity committee.
The Investment Commission withheld approval due to concerns over the financial
soundness and transparency of the deal, ending hopes of 10 to 11 other
investment deals valued at US$2 million each, Bryson said.
Attractiveness and ease of investment sit atop the list of concerns of
prospective investors and the latter appears the biggest obstacle, Bryson said.
“Although Taiwan scores well on international competitiveness surveys, those
rankings do not translate into high levels of inbound investment,” he said.
Taiwan embarrassingly ranks second to last among 17 Asian countries in
attracting private equity fund investment, behind Sri Lanka and ahead only of
Pakistan, AmCham’s white paper says.
AmCham urged President Ma Ying-jeou (馬英九), now well into his second term, to
make a greater effort to revitalize the economy as time is running out to
establish his legacy, the paper says.
“Actions taken in the next 12 months before the ‘lame duck’ status begins to
hamper progress will be decisive in shaping the Ma administration’s future place
in history,” it says.
Eusden pressed Ma to mobilize a national campaign, with trade liberalization and
joining the Trans-Pacific Partnership as overriding objectives, adding that only
urgent action can propel Taiwan’s economy out of the doldrums.
Taiwan’s wages have stagnated, consumer confidence is weak and young people
increasingly go to China to find better, higher-paying jobs, the AmCham report
says.
The trade group does not have an opinion on the planned nuclear referendum, but
suggests policymakers make sure there is sufficient energy to meet the demands
of all sectors of the economy.
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