Taipei 101, one of the world’s tallest buildings, stretches skyward, symbolizing Taiwan’s improved performance in the 2017 Index of Economic Freedom released Feb. 15 by Washington-based think tank The Heritage Foundation. (Courtesy of Taipei 101)

Taiwan achieved its best ever ranking in the Index of Economic Freedom, climbing three spots to No. 11 out of 180 economies, according to the annual report’s compiler Washington-based think tank The Heritage Foundation Feb. 15.

With a score of 76.5 out of 100, up 1.8 points from the 2016 edition, Taiwan was categorized as “mostly free” along with 86 other economies, including the U.K. at No. 12 and the U.S. at No. 17. In the Asia-Pacific region comprising 43 economies, it came in at No. 5, ahead of South Korea at No. 23 and Japan at No. 40.

Hong Kong, Singapore, New Zealand, Switzerland and Australia topped the report in that order, with the five countries the only ones classified as “free.” North Korea, Venezuela and Cuba claimed the bottom three spots in that order with a classification of “repressed.

Of the 12 benchmarks used by the index to assess an economy under the policy areas of government size, open markets, regulatory efficiency and rule of law, Taiwan did particularly well in business freedom, scoring 93.4 and ranking No. 4 in the world. It also outperformed most other economies in government spending, property rights and trade freedom.

According to the report, Taiwan is a dynamic, multiparty democracy characterized by an independent judiciary and a sound legal framework providing strong protection of property rights and upholding the rule of law.

Describing Taiwan’s economy as one of the richest in Asia, the index credited this to the strength and resilience of local small and medium enterprises, adding that the private sector benefits from a relatively well-developed commercial code and open-market policies facilitating the free flow of goods and capital.

The report also highlighted labor market flexibility as an area for improvement, describing the pace of privatization and market liberalization as slow and uneven, with the financial sector fragmented. It recommends further reforms to increase competition and openness, viewing these as critical to sustaining growth momentum in Taiwan.

Established in 1995 and jointly published by U.S. daily The Wall Street Journal, the index tracks economic freedom around the world. (SFC-E)

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