A golden ticket for Taiwan

Hong Kong's new national security law shall undermine its appeal to foreign investors and business

Taiwan to be one of the freest countries in the world. (Photo: Flickr)

Taiwan was once prosperous and shone on the map in Asia. Now it chances that, because of the Chinese affront against freedom in Hong Kong, new doors are opened for Taiwan to claim the spotlight, thanks to economic freedom. Citizens come across challenges to increase their income because of the overprotection of the Taiwanese economy. In past decades, people said that 4 out of every 6 Taiwanese were managers or owners of their own companies, at a time when Taiwan was the manufactory place of many consumer products across the globe. Proudly, these people also established a trustworthy institution for democracy as the ground for Taiwan to be one of the freest countries in the world. The new generations, on the other hand, do not seem to embrace the future of the island. They merely long for working in the bureaus. The desire to make a profit in the short term occurs along with the flags that Taiwan waved vigorously: innovation and entrepreneurship. It is not for less, Taiwanese businesspeople do not acquire stable conditions for growth. To protect trade interests, the government has raised the tax rate, putting Taiwan above countries such as Singapore or Hong Kong.

Taiwan people need to reconquer their entrepreneurial spirit. The state is made up of a population that reaches a significant HDI (Human Development Index) above the OECD average, along with countries such as Estonia, Sweden, or Singapore. A robust economic liberalization would revitalize the existing private initiative and promote the investment of new capitals. Reduction of taxes and non-tariff barriers will facilitate international trade. It is essential for Taiwan to leverage mechanisms such as blockchain and to eliminate local barriers, and even liberalizing the minimum wage. The policy is often out of a good intention to the society but not to the economy. The liberalization of the minimum wage will lead to a higher labor demand domestically, and it will be easier for corporates to hire employers, which will eventually benefit the smallest enterprises.

Taiwan should strive for a lower unemployment rate. A better measure has to be deployed to open up Taiwan once again to the world, and then innovation shows itself as a path. The government should streamline the jobs that do not contribute significant production outputs, namely the civil service. It is also critical to eliminate redundant bureaucracy of the administration. Let’s take Estonia as an example. The country shares certain similarities to Taiwan in terms of technology and average salary, decided to simplify its governance model by introducing electronic procedures with a simple click to cut down the number of civil servants. It has also implemented virtual citizenship, enabling foreigners to start a business in Estonia while enjoying a reasonable tax rate. Taiwan has this successful example ahead for reference.

Taiwan’s government has to attract foreign investors and businesses. So, Taiwanese workers will have the power to enjoy more choices of employment and bargain a price for their inputs, and smaller enterprises will get a chance to let the company evolve. Currently, the percentage of young Taiwanese who want to move from Taiwan to more prosperous places is increasing, given salary conditions or limits on individual freedom, despite Taiwan being an example from Asia. Thus, if Taiwan intends to attract new foreigners who wish to invest and undertake on the island, within the framework of transparent businesses, Taiwanese authorities should consider opening themselves up to monetary freedom. It is necessary to alleviate the tax burden of the business, offering Taiwanese and foreigners a fair competition under the same regulations.

The path that would lead the Taiwanese to a brighter future is by the liberal means. The state should ensure access to markets and currencies such as blockchain, allowing citizens efficiently and inexpensively trade without bureaucracy. It is also critical to simplify their government structure by facilitating the use of technology, following the example of Estonia. Abolishing the minimum wage can lead to the revitalization of small businesses. It hence increases the income of the weakest. To eliminate benefits to unions, the government should put forward a set of clear rules for anyone who takes part in the competition. Aside from that, the taxes ought to be slashed so that Taiwan can benefit from foreign investment. The principles of an economy frame the liberal equation for the growth led by savings instead of massive consumption. Opening up to the global market will invite an enormous influx of foreign investment. The economy will also be motivated by small businesses as for that Taiwan was once prosperous.

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