During tough economic times like the present, with Taiwan struggling to achieve even a 1% growth rate, this country is always at a marked disadvantage. Taiwan’s heavy reliance on international trade inevitably means that the state of the world economy has a massive impact on domestic economic health.
Given that situation, however, it is crucial to make the most of those factors that are within Taiwan’s control, so as to boost the confidence of both investors and consumers. As a start, AmCham Taipei would suggest a focus on the following areas:
Energy policy. The business community and many members of the public are increasingly concerned about whether Taiwan will have a sufficient supply of electrical power at a reasonable cost in the years ahead. Phasing out all nuclear power generation between 2017 and 2025, as the government has pledged, while simultaneously meeting commitments to drastically cut carbon emissions, will present an epic challenge. Without assurance that the policy is indeed viable, industry will naturally be cautious about planning any new projects. Disclosure of a comprehensive, realistic energy plan by the government would go a long way in restoring business confidence.
Labor and employment. Taiwan is experiencing a steady outflow of talent at the same time that numerous restrictions make it difficult to attract professional and technical personnel from abroad. One of the problems is that labor regulations, governing such matters as working hours and overtime pay, continue to be geared toward factory conditions, and are not suitable for building a favorable environment for the service-oriented, knowledge-based businesses that are already a dominant part of the economy. Instead of a “one-size-fits-all” approach, Taiwan would benefit from separate sets of labor regulations for production-line workers and for service and management-level employees.
Rules-making procedures. AmCham has strongly recommended revision of Taiwan’s Administrative Procedure Act to introduce greater transparency and public engagement into the drafting of laws and regulations. A key element must be a sufficient period for notice and public comment. The Chamber suggests 60 days, compared with Taiwan’s current seven days, soon to be lengthened to 14. Equally important is that government agencies have the responsibility to respond to those comments, incorporating changes into the draft regulations as needed. Both foreign-invested and domestic companies find that the current rules-making process leads to the enactment of many regulations that are unrealistic, ineffective, and often entail unintended consequences. Greater consultation with stakeholders early in the process would forestall many of those problems, creating a more positive overall business climate.
Investment approvals. In most instances, the approval process for foreign-investment applications works smoothly, but exceptions have occurred among some larger, high-profile cases where normal procedures have been bypassed. To avoid a broader chilling effect on foreign investment, it is vital to keep the regulatory review process insulated from political interference.
None of the above measures would be a panacea. But together, they could help make a significant difference in how both domestic and foreign companies, as well as the general public, view the future prospects for this economy.