Hello everyone
welcome to Taiwan Bar
Today we're gonna talk about
Taiwan’s economic miracle
Out of many Asian countries
Taiwan, Hong Kong, Singapore and Korea
had the highest growth rates in their economies
And were called the “Four Asian Dragons”
Although Taiwan is more like a worm right now
But a lot of folks don't know much about
Taiwan's economic success
Other than some government policies that were not too shabby
How exactly did this miracle happen?
In 1945
the curtains falled for the Great East Asia War in the Pacific
Taiwan's industrial infrastructure built under the Japanese rule
Like power plants, telecom towers and oil refineries
Were all destroyed by the Allied Forces
At the time, Taiwan seemed to have no future
The economy was like a good girl gone bad
you best believe it's gone forever
When the ROC government took over Taiwan
Taiwan’s economy was then connected to China's
Affected easily by the Chinese Civil War
Inflation, unemployment and public anger rose greatly
So
How did Taiwan
Start from the bottom
and how did it bring the whole team here?
Ahem
here we go!
In 1949
The inflation was so bad
actual currency was like Monopoly money
So the national monetary reform took place
40 thousand Old Taiwan Dollars
Could be exchanged for one New Taiwan Dollar (NTD)
the kind we’re still using today
Cutting all economic strings attached to China
and restricted the damage caused by inflation
But the KMT
which was in great debt after moving to Taiwan
Had no budget to help Taiwan’s economy take off
Even under the pressure
from the commies and the peeps
The government's mind
was still fixed on retaking the Mainland
But at the same time, didn't have what it takes
At this moment
a war jumped out of the nowhere and saved Taiwan’s economy
It was the Korean
War...
simida...
This civil simida~ war yo~
started fiercely simida in Korea yo~
and Mao Zedong, in order to fight the U.S. and help Korea
transferred the focus of his army
from Taiwan to North Korea
In turn, the US set up a defense line
from South Korea to Malaysia
to fight against communism
Although Uncle Sam didn’t think much about the KMT
Taiwan still held a key position in the defense line
So the US kinda had to help Taiwan a bit, you know?
Sign a Sino-American Mutual Defense Treaty and what not
As a result, all kinds of support came from the US
And in general, we called this the US Aid
From 1951 to 1965
The US Aid accumulated up to 1.5 billion USD
At that time, it was omnipresent in Taiwan
You could see grandpops
and grannies lining up on the street for supplies
And kiddos wearing undies made
from flour bags with Sino-American labels
Apart from daily supplies
the US Aid also invested heavily
in Taiwan’s agriculture and infrastructure
From the Shihmen Reservoir
the Siluo Bridge to the Central Cross-Island Highway
All of these were outcomes of the US Aid
In short
the depressed post-war economy was rescued
by the good-ol fairy-godmother known as the US Aid
And the barely breathing ROC government
was relieved from les miserables
Besides the US Aid
The government also had to do something
to save its buttocks
In 1949
The Taiwan Provincial Government
carried out a land reform
hoping to improve farmers’ living conditions
The 37.5% Arable Rent Reduction Act
that restricted the upper limit of land rent
And the Public land release allowed farmers
to own public land
Finally, the Land to the tiller act let
farmers keep the land instead of landlords
These reformations changed
the fate of farmers and landlords
So it sounded great
Being the breaker of chains
and mother of social classes, you know?
But at the same time
it robbed the landlords' properties
The Landlords thought
Yoooooo
Why'd you reduce the Arable Rent, bro?
Why'd you take my land, bro?
Why'd you give my land to farmers
while I was sleeping, bro?
But at that time
Taiwan was still in the period of White Terror
The Provincial Governer Chen Cheng once said
The 37.5% Arable Rent Reduction Act
must be conducted without hesitation
There might be difficulties
there might be shameless rebels
but I believe
there will not be idiots with a death wish
With just a few words
he scared landlords to death
Even if they didn't agree
they kept quiet and sucked it up
No matter what
The monetary and land reform
plus the US Aid
gradually revived Taiwan’s economy
after the war
Cotton yarn sent from the US
helped develop the textile industry
Wheat sent from
the US helped develop the food industry
And because of the US aid
Taiwan was able to make noodles
bread and doughnuts
doughnuts
The Taiwanese, who for the most part ate rice
Gradually accepted noodles and other flour-made food
under promotion of the government
Daily necessities that used to
rely entirely on imports
Could finally be produced
by ourselves and replace imports
So this period in time
became the stage we call the Import Substitution Period
In the 1960s
The US Aid ended
Besides being a cry baby
Taiwan had to come up with new ways to
help the economy
Like the Export Processing Zone
set up at that time
and the Investment Incentive Act
carried out by the government
These were both methods hoping to
encourage investments to replace the US Aid
The Investment Incentive Act allowed many companies
and investors to have tax reduction
But did these profits made from companies really benefit Taiwan?
Did they go into the pockets of big enterprises or small citizens?
Under the assistant of the government
many private companies began to thrive
and those who originally sold rice or wood
became Warren Buffets
In short
Taiwan’s economy started to lean towards exports
The GNI, GDP
everthing increased substantially
What an amazing government
you must think, right?
BUT!
Exporting won’t work just by planning
You need to have customers as well
Luckily, Taiwan hit the jackpot and caught up
with the international economy bandwagon
Taiwan replaced Japan's role
as Japan was moving on to the next economic stage
and became the OEM of industrial products
Hence, Taiwan got to sell sell sell,
and foreigners got to buy buy buy
Hold on, let's clarify something real quick
Speaking of the Ten Major Constructions Projects
Everyone seems to think
those represent Taiwan’s economic miracle right?
This large-scale of post-war public constructions
Of course contributed greatly to
the livelihood economy
Especially to land and air transportation
For example
the North Link Line connected the east and the west
reducing travel time
and the Formosa Freeway
though always criticized for being built for the rich
Also turned into the transportation lifeline of Taiwan
Not to mention the largest airport in Taiwan
the Taoyuan International Airport
Now it is always flooded with ...
uh… tourists
hehe
But to be honest
some constructions used to be useful
But are kinda out of date today
like the Port of Taichung
It was built to be the international port of central Taiwan
But, it seemed like the people
who built it missed a few geography classes
Because the port always suffered from tides and silt
Wasting the government a fortune on maintaining
Also, for some unknown reason
the TINY Su-ao Port was also dragged
into being a part of the Ten MAJOR Constructions
You know the only thing MAJOR
you can get out of expanding such a small port?
A MAJOR financial loss, get that
In the 70s
Being environmentally friendly was the new cool thing
So the petrochemical industries
and the nuclear power plants in the Ten Major Constructions
Although helpful to Taiwan’s economy
Also faced a lot of protests because of pollution
I wonder if the government knew
That some constructions would be rendered obsolete
by the time they were finished
Sometimes
there are things you'll regret tomorrow
if you don’t do them today
But looking at failed constructions
maybe there're also things
You'll regret no matter what
After all that talk
We now seem to understand a little more
about Taiwan’s economic miracle
In a time of globalization
Economic development not only requires our own effort
but also a keen eye for international trends
In the past, the economic miracle seemed like smooth sailing
however, the sacrifices and side effects it caused
should not be ignored
Environmental pollution and agricultural damage
plus the worsening disparity between the rich and the poor
All teach us a lesson
What kind of development are we pursuing?
We used to be taught that
Taiwan started from farming
went through an export processing stage
then it relied on light industry, heavy industry
all the way to high tech and service industries
yadda yadda yadda
We always thought
that economic development was like climbing on a ladder
All we had to do was climb step by step
Don’t think, don’t whine, don’t hesitate
But is this really the case?
Is it possible that a ladder
might be suitable for others but not for us?
is it possible that we'll end up discovering nothing
at the top of the ladder
before finding out that it's an one-way trip?
Let's assume there is a universal ladder that's good for everyone
Which step is Taiwan currently on?
And where should the next step take us?
Al-righty
After all that talk
I'm a bit thirsty
After drinking this piece of chicken cake
(...?)
We'll see you next time
Bye