President Tsai Ing-wen’s administration is planning to set up a task force to promote her New Go South policy. The policy is aimed at helping the business sector gain a stronger foothold in India and members of the Association of Southeast Asian Nations. Both India and ASEAN member countries are south of Taiwan geographically, hence the name “Go South.”
The original Go South policy was introduced in the 1990s to raise Taiwan’s profile in Southeast Asia through investment. The policy produced positive results for Taiwan’s economic ties with countries such as Indonesia, Thailand, Singapore and the Philippines in the first few years. However, it had lost its luster by the late 90s due to China’s economic emergence. The Asian financial crisis in 1997 further prompted Taiwanese investors to withdraw from the region. It was not until 2010 that Taiwan’s investment in ASEAN countries begin to increase as a result of rising labor and operating costs in China and the need to “Go South” began once more to gain attention.
The head of the task force, former Foreign Minister Huang Chih-fang, warned earlier this week that Taiwan has five more years remaining to secure its presence in ASEAN. Huang said Taiwan will lose its competitive edge if it fails to catch up with the rest of the world because countries like China, the United States, Japan, Australia and South Korea had a road map in place for investment in the region years ago.
In a sharp departure from the previous policy in the 90s that focused on investment and trade figures, Huang said the New Go South policy is an economic strategy that emphasizes on bilateral exchanges and training professional talent. While Taiwan’s manufacturing and R&D are a plus, Huang said the country is relatively weak in marketing and distribution skills. Therefore, stepping up to offer much-needed training is a priority.
As Taiwan has a fairly small domestic market, Huang said the country must “go south” while attracting more investment and tourists to itself.