Taiwan: The Most Successful ‘Asian Tiger’?

As we enter Taiwan’s 2020 election season, the state of the economy is certain to be one of the key topics of debate. Since Taiwan’s democratization, much of the electorate has believed that Taiwan lags behind the other “Asian Tigers”—Hong Kong, Singapore and South Korea—and electoral campaigns have often focused on restarting the “stalled” Taiwan Miracle. In 2020, every candidate is certain to focus on how, if elected, they will take Taiwan from being the tiger that fell behind to the head of the pack.

But has Taiwan really fallen behind? In recent years, CommonWealth, Bloomberg and Singaporean daily Today have said as much. Anecdotally, it seems to be a common sentiment both in Taiwan and across Asia. Presidential candidates wouldn’t keep talking about it if they didn’t think the notion was causing worry among the Taiwanese electorate. 

It’s easy to see why, on the surface. Let’s be honest—anecdotally, South Korea, Singapore and Hong Kong all look so much nicer than Taiwan. When I first moved to Taipei in 2006, it reminded me of Seoul, which I’d visited in 2003. Returning to Seoul in 2014 for a short holiday, however, I found it had grown to resemble Tokyo more than Taipei. Wages in the other Asian Tigers, as well as China, are also seen as higher (while wages in Taiwan continue to stagnate, although the situation may not be quite as bad as people think). Nothing from the Today link above is wrong, either:

But Taiwan did not woo multinational companies to set up facilities, as Singapore did. It did not develop a financial center like Hong Kong’s, or establish large conglomerates or Chaebols, the way South Korea did…

Today, young Taiwanese face dim job prospects. They have been dubbed the “22k” generation—a reference to their minimum monthly salary of NT$22,000, which works out to just over S$1,000. Youth unemployment is more than 12 percent [government data confirms that number], and many young Taiwanese are disillusioned.

That said, it is not conclusive proof that Taiwan is truly behind its peers.

The same things have been said about Hong Konger, South Korean and Singaporean youth—“bleak prospects,” “disillusioned,” “low salaries,” “can’t afford to buy a home,” “no future.” Salaries for young workers are low around the world—millennials everywhere can’t afford to buy property at the rate their parents and grandparents did, and Taiwan is no exception. Taiwan’s economy is slower than it once was, but that’s true everywhere.

Poverty and inequality

In some metrics, Taiwan absolutely dominates.

Taiwan’s GINI coefficient, which measures wealth inequality, is 33.6 (the lower the number, the better). South Korea’s is 35.7, Singapore’s is 45.9, and Hong Kong’s is a whopping 53.9. Although the numbers are getting a bit dated, Taiwan’s poverty rate is stunningly low, at 1.5%. In contrast, South Korea’s is 14.4% and Hong Kong’s is 19.9%, although it’s unclear how those numbers are measured. Singapore doesn’t provide data, but a few reliable sources estimate poverty rates in Singapore to be a whopping 20% to 35%.

Clearly, Taiwan wins on equality. Given the lower cost of rent in Taiwan than Hong Kong and Singapore, you’re less likely to find yourself spending years living in a coffin home or a literal cage if you’re struggling financially in Taiwan. This metric is crucial: how well the poorest are able to cope is just as important as how much the upper classes are able to earn. 

Is that level of equality not worth the trade-off of a few unsightly buildings? Would you not give up your glass skyscraper dreams to have more flexibility in your lifestyle? Just because a city looks a little decrepit around the edges doesn’t mean it’s not wealthy.

Healthcare

Fortunately, much of the comparison on healthcare in the Asian Tigers on this has already been done, and while Taiwan does not come out on top in every area, the overall analysis is positive.

Hong Kong’s public hospitals have preposterously long wait times for procedures you can get done quickly and cheaply in Taiwan. The only way around them is expensive private hospitals, which not everyone can afford. South Korea’s benefit package is quite narrow and a great deal of medical services are simply not covered. Singapore went through a process of privatizing hospitals, with mostly negative consequences, including increased costs to patients. Out-of-pocket expenses in Taiwan are similar to Hong Kong’s (for better service). They’re higher in South Korea (due to so many uncovered services) and far higher in Singapore. 

Putting all that together, Taiwan seems to have the best cost-to-benefit ratio of health coverage among the Asian Tigers. 

A free society

There are also personal freedoms to consider. South Korea is Taiwan’s only peer in this regard. Hong Kong, at this point, is simply neither democratic nor free. Aside from the recent protests, the government is ultimately beholden to Beijing, and activists, publishers and journalists disappear (or are attacked or murdered) regularly. In Taiwan, activists are mostly free to agitate for change. In Hong Kong, that’s simply not the case. Attending a protest—exercising your basic right to free speech and assembly—could get you fired.

Singapore isn’t wracked by protests (at the moment) but is absolutely an illiberal state where peaceful assembly and freedom of speech are so strictly controlled as to not exist. Taiwan’s democracy is ranked as one of the strongest in Asia and the world—again, only South Korea compares among the Asian Tigers. Taiwan enjoys similar accolades for press freedom, although problems persist. Nobody requires asylum abroad from Taiwan’s government, as with Singapore—it is residents of other countries who ask Taiwan to pass an asylum law for others, a discussion that has been boiling due to the potential consequences Hong Kongers face for participating in recent protests.

If you’re not a political activist, you may not think this is particularly important, but having a dissenting viewpoint and being able to voice it without potentially dire consequences is crucial to a healthy society. For journalists, writers, academics and anyone with an opinion, it does matter.

Considering this, although Taiwan’s justice system is considered flawed by many, it simply cannot be said that a political dissident or critic of the government, for example, would get a fairer hearing in Hong Kong or Singapore.

Work culture

Taiwanese will be among the first to tell you that their working hours are too long. This is hard to dispute: 過勞死, or “death from overwork,” is not unknown here, and Taiwan has some of the longest working hours in the world. 

Taiwanese are right to complain about their long working hours, which average 2,033 per year as of 2019, the fourth-longest in the world. However, that is lower than Singapore’s total of 2,330 hours per year on average. Until recently, Taiwanese also worked fewer hours on average than South Koreans: both countries saw a decrease in 2019, but Taiwan’s was miniscule compared to South Korea’s significant drop. 

Data for Hong Kong’s working hours in 2019 does not appear to be available yet, but in 2018, Hong Kongers worked an average of about 50.1 hours per week, or 2,296 per year—again, more than Taiwan.

Given the longer working hours and wealth inequality that the “international business center,” “finance hub” and “large conglomerate” economic strategies of Singapore, Hong Kong and South Korea have wrought, is it really such a bad thing that Taiwan took a different route?

Gender parity

Every culture in the world struggles with sexism (yes, all of them), but Taiwan arguably has the best gender equality in Asia.

The gender wage gap in South Korea is the largest of all OECD countries (34.6%). My husband, who has lived there, recalls seeing job advertisements that blatantly offered more money to male applicants than female applicants for the same work.

Taiwan’s gender wage gap is 14.6%—on par with a lot of Western countries, which means it’s not stellar, but fairly strong for Asia. Hong Kong’s gender pay gap is 22.2% as of 2017. Singapore’s is a bit lower than Taiwan’s.

Domestic violence remains a problem in Taiwan, but it’s even worse in South Korea and is known to occur at similarly alarming rates in Hong Kong and Singapore. In all cases, it’s assumed that the numbers reflect underreporting and the true statistics are far higher. 

Education

It’s difficult to compare the Asian Tigers in terms of primary and secondary education. Education rankings are notoriously subjective; although some rank the education system in Taiwan as “better” than Singapore, or “better” than South Korea in math scores, it’s difficult to say what criteria this is based on.

All four systems have endemic problems that include high-pressure environments, long study hours (including after-school classes that take away from children’s free time and ability to discover their own interests), large class sizes and memorization-and-testing heavy curricula. It’s not so much that Taiwan fares worse than its peers in Asia as that it does not necessarily fare better.

It is true, however, that university-level education is generally thought to be “better” in Hong Kong, South Korea and Singapore than in Taiwan (although not everyone shares this bleak perspective). All three places have higher-ranked universities than Taiwan: National Taiwan University (NTU), Taiwan’s most “prestigious” university, is ranked below similarly-prestigious universities in other Asian Tiger nations.

That said, tertiary education rankings can’t be taken at face value either: these lists routinely include Chinese universities at the top of their lists, despite the fact that academic freedom in any humanities or liberal arts discipline simply does not exist in China. It’s difficult to argue, therefore, that any Chinese university truly deserves a top spot on those lists. Academic freedom is also a concern in Singapore and Hong Kong, though not to the same extent. With so many intersecting issues and “rankings” that may well be meaningless, this is a difficult area of comparison.

The bad and not-so-bad news

This isn’t to say that Taiwan is better than the other Asian Tigers in every way. What’s not going well?

Compared to the other Asian Tigers, Taiwan’s unemployment numbers aren’t great. They’re similar to South Korea’s at 4.4% (a rise from 3.8% in December 2018) and 3.7% (average 2018) respectively. Rates are lower in Hong Kong and Singapore, at closer to 2% to 3%. Youth unemployment in South Korea is around 10.4%, for Hong Kong it’s about 9.4% and Singapore is lowest at 5.2%. As above, Taiwan’s is in the vicinity of 12%. There’s no getting around it—Taiwan’s unemployment looks low by European standards and is on par with the United States, but it’s simply not that robust in an Asian context.

Purchasing power doesn’t look much better, with Taiwan ranking high globally—19th in the world according to the International Monetary Fund and 28th according to the CIA World Factbook—but behind both Singapore and Hong Kong on both scales (remembering, of course, that that’s still higher than Canada, Australia and a huge chunk of Europe). South Korea was quite a bit further down in both cases. 

That said, a lot of Singaporean and Hong Kong’s relative “wealth” by purchasing power can be explained by how this purchasing power is calculated. Their large foreign labor populations, who have much lower incomes and purchasing power, are not counted in these metrics as they are not citizens or permanent residents (Taiwan News makes a similar point). Taiwan also has a large foreign labor population, but while there isn’t much reliable data on this, the ratio of foreign labor to local population in Taiwan is lower than in those two city-states: 5% in Hong Kong (counting only domestic workers) and around 20% in Singapore (Taiwan’s number is closer to 3% and South Korea’s is roughly 2%). In short, Taiwan’s purchasing power in comparison to Hong Kong and Singapore may be stronger than it appears.

Notably, Singapore gets around the key factor that might otherwise sap a large chunk of their citizens’ purchasing power: housing. Most housing in Singapore consists of HDB (Housing Development Board) public housing projects, which builds accommodation affordable to a variety of household budgets. Roughly 80% of Singaporeans live in these flats. That might explain how Singapore can have such a high GINI coefficient and estimated high levels of poverty, but maintain high purchasing power.

As for Hong Kong, it may seem as though the stratospheric cost of real estate would sap purchasing power. It’s important to remember, however, that “purchasing power” doesn’t necessarily calculate wealth equality. In other words, Hong Kong may seem to have higher purchasing power simply because there is more wealth concentrated at the top—more rich people who can do more purchasing. That wealth is more evenly distributed in Taiwan, with an overall lower cost of living.

Taiwan #1! 

Taiwan is not an island utopia and even where Taiwan performs well compared to the rest of Asia, there is still work to be done. The gender wage gap persists despite being ranked the most gender-equal Asian country, and having one of the freest presses does not necessarily translate into journalistic quality. Having the fewest hours worked among the Asian Tigers does not mean working hours are reasonable. Salaries remain low, work culture is problematic, and the education system is flawed.

However, Taiwan’s higher levels of equality, lower poverty rates, comparatively free society and overall strongest national health care system in terms of costs and benefits to its citizens do matter. Taiwan may not be a place where the richest people can get as rich as they might in other parts of Asia, but the wealthy classes are not the only people who count. Where it really matters, Taiwan doesn’t lag behind the other Asian Tigers – it comes out on top. Keeping itself free and relatively equal in the tumultuous 21st century is an accomplishment, one that few other countries—and no other Asian Tigers—can match.

Special thanks to Roy Ngerng for data on Singapore. 

(Cover photo by happypixel19 on Pixabay)