Editorial

Giving credit where credit is due

(Photos: Huang Chung-hsin)

• Publication Date：05/12/2012
• Source： Taiwan Today

The latest report released by U.S.-based Business Environment Risk Intelligence assesses Taiwan’s Profit Opportunity Recommendation at 72 points, or No. 4 in the world. Of the 50 reviewed countries, Taiwan trails only Singapore, Switzerland and Norway, taking second place in Asia.

This result, when viewed in light of the European sovereign debt crisis and U.S. financial slowdown, is praiseworthy in that it reaffirms Taiwan’s political and economic development is on track.

The report describes Taiwan’s operational conditions as excellent, positioning them equal top with Singapore. Successful policies of the ROC government are expected to improve this position by assuring a much lower surplus next year. Other highlights include a stronger banking industry that will make further gains on the back of streamlined accounting measures introduced by the Financial Supervisory Commission and ROC Central Bank.

Clearly, BERI has recognized that pragmatic government policymaking aimed at cushioning the blow of the global slowdown while transforming the economy is playing an important role in preparing Taiwan for future fiscal challenges.

The island’s political risk rating of 62 points also came in for praise from BERI, described as healthy and contributing to stable cross-strait relations. The government is expected to capitalize on this positive state of affairs by negotiating free trade agreements with countries such as Singapore and Indonesia.

Other developments noted by BERI include foreign investment recovering over the next two years, with US$2 billion-plus forecast to be on the books by the end of 2012. This is good news for Taiwan’s manufacturing sector, which can expect to pick up the lion’s share of this inflow.

A similarly positive assessment of Taiwan was made in the most recent Sovereign Risk Index update produced by U.S-headquartered BlackRock Investment Institute. The island parachuted into the top 10 of the 48-strong index on the back of its sterling debt profile and “model citizen” status when it comes to net debt levels.

BlackRock attributes Taiwan’s No. 6 ranking to running a tight budgetary ship with most debt held almost exclusively by domestic players. The island has very little foreign currency debt to speak of and scores high in the Willingness to Pay category because of perceived government stability. It also finishes near the top of the class on the Financial Sector front due to higher bank capital.

In Asia, Taiwan was trumped only by Singapore in second place overall with rival South Korea trailing at No.11, down two notches from the previous quarter.

With the BERI and BlackRock assessments indicating that government political and economic policies are moving in the right direction, it is obvious that the efforts to reboot Taiwan’s business climate have been unanimously endorsed by the international community.

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