After almost five decades of sound economic management, Taiwan has managed to go from an underdeveloped agricultural island, to an economic power that is a leading producer of high-technology goods. Taiwan has a dynamic capitalist economy in which the authorities' control of investment and foreign trade is gradually diminishing. Highly vulnerable to the fluctuations of the global economy (its exports account for two thirds of the Taiwanese GDP), the island was severely affected by its parters' economic slowdown, especially regarding the eurozone and the United States. Growth remained at 2.1% in 2013 and was essentially driven by the rise in domestic demand. It is expected to rise to 3.2% in 2014 thanks to the resumption of exports following the recovery of global demand
The Taiwanese economy has been negatively affected by the unfavorable international context, especially regarding the United States and Europe. In September 2013, the island nonetheless reached its record in the exports of goods (7.8 billion USD) and therefore confirmed its position as a global leader in electronic products. President Ma Ying-jeou, who was reelected in 2012, announced the priorities of his second term: to reduce social inequalities, create jobs, support innovation and guarantee a greater participation of Taiwan in the region's economic integration. For the sixth consecutive year, the country has adopted an expansionist budget policy for 2014. Its main focus is social security (more than one fifth of expenditure), followed by education, science and culture (approximately one fifth of expenditure) and by the defense sector. Funding of public works is also a priority, while a balanced budged remains secondary. Because of declining revenues, the budget deficit should be financed by new lending and the emission of government bonds. In the long-term, Taiwan will have to deal with problems of population aging, low birth rate, its diplomatic isolation and decline in its economic competitiveness.
The unemployment rate, which reached almost 6% in 2009, has now dropped to about 4% and should continue to decline.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||465.21||475.33||489.09e||505.45e||545.64|
|GDP (Constant Prices, Annual % Change)||4.2||1.5||2.1||3.5e||3.8|
|GDP per Capita (USD)||20,030||20,386||20||21,572e||23,229|
|General Government Balance (in % of GDP)||-4.4||-4.3||-2.9||-2.1||-1.8|
|General Government Gross Debt (in % of GDP)||40.0||41.0||41.1e||40.0||38.9|
|Inflation Rate (%)||1.4||1.9||0.8||1.4e||2.0|
|Unemployment Rate (% of the Labor Force)||4.4||4.2||4.2||4.0||4.0|
|Current Account (billions USD)||41.69||50.59||57.35e||60.09||61.61|
|Current Account (in % of GDP)||9.0||10.6||11.7e||11.9e||11.3|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
The agricultural sector contributes very marginally to the GNP and employs around 5% of the workforce. Taiwan's main crops are rice, sugarcane, fruits and vegetables. Taiwan has limited natural resources and croplands are cultivated intensely.
The secondary sector accounts for a significant part of the GNP. Even though traditional industries such as iron and steel, chemical products and mechanics still account for almost half the industrial production, new industries are more dynamic. Taiwan is one of the world's biggest suppliers of semi-conductors, computers and mobile telephones. It is also the world's biggest supplier of computer monitors.
Services contribute nearly 70% to the GDP and employ slightly under 60% of the workforce.
The country, which has to deal with the continuous relocation of labor-intensive industries to countries where labor is cheaper (especially China), will have to rely on new conversions, in order to move from a high-technology based economy to a services oriented economy.
|New Taiwan Dollar (TWD) - Average Annual Exchange Rate For 1 USD|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Foreign trade has been Taiwan's growth driver, representing more than 140% of the GDP (average of 2010-2012). Taiwan's economy remains very export-oriented, so much so that it depends on an open world trade regime and remains vulnerable to downturns of the world economy. The electronics sector is Taiwan's most important industrial export sector and also the one that receives most of the American investment. Taiwan, as an independent economy, became a member of the World Trade Organization (WTO) as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei") in January 2002. Taiwan's main export partners are China, Hong Kong, United States and Japan. A free-trade agreement has been signed with New Zealand and Singapore and the country has also been building closer ties with China and a new liberalisation agreements between the two countries should be ratified by the Parliament. For more information, refer to the COMTRADE website.
The island shows a surplus trade balance. In 2013, Taiwan registered a record trade surplus of $35.54b, due to a rise in exports and a decline in imports.
|Foreign Trade Indicators||2010||2011||2012||2013|
|Imports of Goods (million USD)||251,236||281,438||270,473||269,897|
|Exports of Goods (million USD)||274,601||308,257||301,181||305,441|
|Imports of Services (million USD)||37,117||41,321||42,051||41,710|
|Exports of Services (million USD)||40,104||45,643||48,810||51,360|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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