by ANTONIO A. AMADOR / Regional Tax Director-Asia/Pacific, TRI
How did three highly successful
island economies in the
western Pacific achieve their
solid fiscal records?
Taiwan, Singapore, and Hong Kong
have been cited as having the best
performing economies in a field of 85
countries. The U.S. ranked 25th in the
survey, which covered the period from
1974 to 1981.
Using the 1973 oil crisis as the starting
point, Euromoney, an international
financial monthly, employed a weighted
formula of five variables: economic
growth, rate of inflation, strength of
SDR (special drawing rights) exchange,
export growth, and balance of payments.
While most countries blame
the price of oil as the primary cause of
sluggish economic growth, the front
runners ironically have a common
handicap-a lack of oil to fuel rapid
industrial expansion. Other similarities
among Taiwan, Singapore, and Hong
Kong are superficial, the study said, and
can easily be misleading. All are island
economies that depend on manufacturing
for export. The population in all
three is ethnically Chinese. And all
three have strong central governments.
The similarities end there.
The differences, in fact, far outweigh
the similarities. Singapore is a sovereign
republic, while Taiwan wants to assert a
sovereignty that most of the world
refuses to recognize. Hong Kong is a
colony where people do not vote and
are not interested in the vote. Government
intervention in business is
markedly strong in Taiwan, selectively
assertive in Singapore, and comparatively
weak in Hong Kong. Taiwan has a
semblance of a primary economic base:
agriculture. Both Singapore and Hong
Kong have practically no such base.