Thursday, February 4, 2016

Taiwan ranked 14th-freest economy

Taiwan ranked 14th-freest economy

STILL WORK TO DO:In Taiwan, connections remain between politics and big business, and corruption is still a problem, the ‘Index of Economic Freedom’ said

By William Lowther  /  Staff reporter in WASHINGTON Staff reporter in WASHINGTON
Taiwan has achieved its highest-ever score in the annual Index of Economic Freedom released on Friday, remaining the 14th-freest economy in the world, the same position it occupied in the previous year’s ranking.
The nation is ranked fifth out of 42 economies in the Asia-Pacific region and has improved over the past year in seven of the 10 categories measured by the index.
“Despite progress, however, a relatively high level of perceived corruption and a rigid labor market still restrain Taiwan’s overall economic freedom,” the report said.
Published and compiled by the Heritage Foundation and the Wall Street Journal, the report has attracted global attention for more than 20 years.
The global average score for economic freedom is 60.4 out of 100, with Taiwan scoring above that figure with 75.1.
Among the 178 nations ranked, scores improved for 101 nations and declined for 73, while 90 nations were found to provide a moderate or better level of economic freedom.
The number of people living in economically “unfree” nations remains high — 4.5 billion, or 65 percent of the world’s population. More than half of them live in just two countries, China and India.
“The fundamental relationship between economic freedom and prosperity is readily apparent worldwide,” the report said. “No matter the region, per capita income levels are consistently higher in countries that are economically freer.”
Hong Kong and Singapore were ranked first and second respectively for the 21st consecutive year, followed by New Zealand, Australia and Switzerland.
The index evaluates nations in four broad policy areas: Rule of law, limited government, regulatory efficiency and open markets.
There are 10 specific categories: Property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom and financial freedom.
In Taiwan, connections remain between politics and big business, and corruption is still a problem, the report said.
“Economic freedom is the fundamental right of every human to control his or her own labor and property,” the report said.
“In an economically free society, individuals are free to work, produce, consume and invest in any way they please,” it added.
Prudent macroeconomic policy within a stable legal and monetary environment has been key to rising levels of economic freedom in Taiwan over the past five years, the report said.
“Commitment to structural reforms and openness to global commerce have enabled Taiwan to advance far into the ‘mostly free’ category,” it said. “Taiwan’s export-driven, dynamic economy benefits from a well-functioning legal framework and a tradition of private-sector entrepreneurship.”
“The efficient business environment is facilitated by a competitively low corporate tax rate and the elimination of minimum capital requirements for incorporating a company,” the report said.
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Labor Insurance Fund may be bankrupt by 2027

Labor Insurance Fund may be bankrupt by 2027

By Huang Pang-ping and Jake Chung  /  Staff reporter, with staff writer

People visit the office of the Labor Insurance Bureau in Taipei in an undated photograph.

Photo: Taipei Times

The Labor Insurance Fund is likely to start posting losses by 2018 and could face bankruptcy by 2027, with liabilities rising to NT$8.36 trillion (US$248.8 billion) from NT$6.83 trillion, according to the fund’s latest report released yesterday.
Bureau of Labor Insurance Deputy Director Lee Sung-lin (李松林) said that the fund’s bankruptcy could be delayed until 2038 if policy reforms approved by the Executive Yuan could be implemented.
However, policy implementation has been suspended until president-elect Tsai Ing-wen (蔡英文) takes over the government in May and appoints a new Cabinet, Lee said.
The Executive Yuan had originally planned to subsidize the fund by NT$20 billion to NT$200 billion per year, raising the insurance premium rate by 0.5 percentage points until it reaches 18 percent, expanding the insured salary levels by 12 months per year to reach 144 months from the current 60 months, and lowering payout rates from 1.55 percent to 1.3 percent for those with a monthly salary of NT$30,000.
The report did not differ much from the previous report, aside from a sharp increase of NT$1.53 trillion in liabilities, due to an aging society, Lee said
The fund’s return on investment has seen an increase over the past decade, which has contributed to reducing its debts, Lee said.
However, rising payouts because of increases in annual salaries of the insured and an aging society ensure that the fund would continue accruing debt and would eventually be bankrupt, the report said.