After receiving dismal reports on a faltering export industry, Taiwan is reviving the notion of “economic autonomy,” which could improve its global competitiveness along with its economy and related exchange traded fund (ETF).

Exports for Taiwan slumped 28.6% in February, the sixth consecutive month of year-over-year declines, according to The International Herald Tribune. Imports have also dropped 31.6%, which left a trade surplus of $1.7 billion in February.

Analysts estimate that Taiwan could contract from 5% to 11% this year because of diminished demand for Taiwanese goods across the world. The Taiwanese government thinks the economy is likely to contract 3%.

The current economic crisis is just the right occasion for Taiwan to consider a long-term, cross-disciplinary perspective, according to Taiwan News. It may be time to shift away from traditional concepts used by the former Kuomintang government that used state-owned banks to “assist troubled enterprises” in a way that involved moral hazard problems.

It is thought that other sectors, not including capital intensive and high-tech export-oriented industries, should be provided assistance. The government should consider allocating assets to boosting the stability of the domestic economy, employment and social stability. If a national campaign were to help upgrade small and medium enterprises, then the country would pave the way for improved global competitiveness through “technological autonomy.”

• iShares MSCI Taiwan Index (EWT): down 3.2% in the last month; up 4.1% in the last three months

Tags: Asia, China, Emerging Markets, EWT, Global ETFs, Taiwan