Taking up the issue, Taiwanese business leaders, academics and journalists have blamed bureaucratic red tape for the island's inability to attract foreign talent. They called for changes to redress this as well as stem the outflow of local talent.
Mr Tharman had warned at a university forum in Singapore last Thursday that one of the factors behind what he called the 'Taiwan story' was that Taiwan had been keeping foreign talent at bay even as its best and brightest were leaving for better prospects in other countries.
BACKGROUND STORY
Only about 3 per cent of the some 810,000 foreigners on the island of 23 million people are white-collar workers, many of them Japanese executives and English teachers from the US and Britain.
BACKGROUND STORY
Barriers to attracting and keeping foreign talent
TAIWAN'S restrictions on hiring and retaining foreign talent (white-collar workers):
Source: Council of Labour Affairs, Taiwan
His comments immediately created ripples here. Mr Stan Shih, the founder of computer giant Acer, and hotelier Stanley Yen reacted by publicly calling for a more relaxed immigration policy.
Mr Shih told reporters on the sidelines of a digital technology show last Friday that Taiwan's development would be restricted if it lacked foreign talent.
'Foreign talent could make up only 1 per cent of the population of Taiwan, but the value they create could be 100, even 1,000 times,' he said.
He urged the authorities to adopt a 'new framework' to tackle the problem.
Only about 3 per cent of the some 810,000 foreigners on the island of 23 million people are white-collar workers, many of them Japanese executives and English teachers from the United States and Britain.
The island used to enjoy heady average annual growth of more than 9 per cent between the 1950s and 1980s, low unemployment and steadily rising wages.
However, wages have not budged for the past decade even as inflation chips away at purchasing power. Per capita income in Taiwan at US$21,592 (S$27,250) trails those of Singapore (US$50,714), South Korea (US$23,749) and Hong Kong (US$34,393). From being the kingpin of the four Asian Tigers, Taiwan's economy is now bottom of the pack.
In a commentary published in the mass-circulation United Daily News, Mr Yen said that 'even Singapore has pinpointed our problem, yet we remain oblivious to it, that is our biggest problem'.
Mr Yen is only partially right. Observers have said that the problem has not gone unnoticed by the government. What has been lacking is a solution, they say.
Dr Yang Chia-yan, a research director at the Taiwan Institute of Economic Research, said Taiwan remains 'institutionally' unfriendly to foreigners. Numerous rules, from educational and salary requirements to lengthy paperwork, deter employers from hiring foreigners.
Expatriate spouses find it extremely hard to find jobs. There are also few choices of international schools for children of expatriates.
'Academics have long agreed that the government should relax the immigration policy to attract more knowledge-based white-collar workers,' said Dr Yang.
On Sunday, the English daily newspaper Taipei Times, noting that Mr Tharman's criticism was not new, asked: 'Will Taiwan ignore this wake-up call, just like it has so many others?'
Premier Sean Chen had said last Friday in Taiwan's Parliament that Mr Tharman was an internationally renowned financial expert and that his comments would help spur a government review of the immigration policy.
He added: 'We are aware that Taiwan has a brain drain problem... it's worth reflecting on the Singapore Deputy Prime Minister's comments. I will ask the relevant departments to take note of them in our efforts to train, retain and groom talent.'
