“It’s time to act for a new government, to get Taiwan [back] on track,” said ECCT Chairman Ralf Scheller, hinting directly at Frank Hsieh and Ma Ying-jeou, the two presidential candidates from the ruling Democratic Progressive Party and the opposition Kuomintang in the next presidential election.

In the chamber’s perspective, the position papers provide a roadmap of 10 recommendations to deal with the current sluggish economy. These suggestions were developed based on issues identified by ECCT’s committee members as hindering the further development of their respective industries in Taiwan.

“We believe it’s time for a new government to act,” said Scheller, who noted that in Taiwan “local political issues are overshadowing economic issues.”

Immediately normalize cross-strait economic relations, open the public procurement market to multinational companies, create a sustainable healthcare environment, accelerate the development of services and other related industries, set up IPR protection mechanisms, improve carbon emissions and energy efficiency, and secure a sufficient supply of skilled labor for high-tech and service industries, were among other emphasized by the European chamber in this year’s position papers.

Instead of just repeating the unresolved issues of the previous position papers, the chamber has been focused on subjects aiming at improving the local economy, said scheller.

For instance, in order to develop the country into a regional financial service center, the position papers recommend that the government further deregulates its financial services rather than engaging in short-term regulatory micro-management. Lifting restrictions on investment in Mainland China securities will give Taiwan investors access to a much wider range of international funds, says the second recommendation included in the 2007 position papers.

“Taiwan is falling behind while Korea is taking over,” he added, citing a recent survey that ranked Taiwan’s global competitiveness index behind South Korea’s in 2007. Last September, a World Bank study also showed that Singapore rates 1st for overall business-friendliness, while Taiwan ranks no more than 50th.

The government must provide clear direction and leadership in development policies for new industries, and make them practical and appealing to end-user, recommends another section of the same position papers.

“In the absence of such regulations, it would be difficult [for Taiwan] to compete on the global market,” said Scheller

Meanwhile, the ECCT also published this year a comparative study on Taiwan’s taxation climate and competitiveness compared with other Asian countries.

Overall, Taiwan’s tax environment is less attractive than that of rival economies in the Asia Pacific region, which puts Taiwan at a disadvantage when competing for investment from both domestic and multinational corporations, shows the survey conducted by KPMG Taiwan.

Higher tax burdens, unclear tax laws and inconsistent law interpretation, combined with the lack of a transparent government tax policy on the future direction for tax rates and tax incentives cause business to shy away from investing in Taiwan, says another section.

Compared with South Korea, Singapore and Hong Kong, the maximum personal income tax in Taiwan is 40 percent, while 35 percent, 16 percent, and 17 percent respectively in all three Asian countries.

“Koreans have no restrictions [on doing business] with China,” said Helmut Bolt, ECCT’s executive director, who added that they can flight directly from Seoul to China.

“Taiwan has a good economic growth, but it could have been 3 percent higher,” he went on, noting that many economic issues could be solved even though the status of Taiwan is still unresolved.