Taiwan's Economic Rise: A Model for Development

Taiwan's economic success story is a fascinating example of how a developing country can achieve rapid
economic growth. This case study examines the key factors that contributed to Taiwan's development,
including:
● Emphasis on education: Taiwan heavily invested in education, making it compulsory for six years
by 1950 and nine years by 1968. This resulted in a highly educated workforce, which is critical
for innovation and industrial development.
● Extensive infrastructure development: The legacy of Japanese colonial rule and the government's
investment in the 1950s and 1960s provided Taiwan with a strong infrastructure base. This
included transportation networks, ports, and communication systems, which facilitated the
movement of goods and people.
● Early and thorough land reform: The land reform program in the 1950s transformed Taiwan from
a land-owning aristocracy to a society of small farmers. This boosted agricultural productivity
and created a foundation for later industrialization by freeing up rural labor and generating capital
for investment.
● Very high rates of savings and investment: Taiwan achieved remarkably high domestic savings
rates, reaching 30-40% in the 1950s and 1960s. High savings rates provide the financial resources
needed for investment. This culture of saving provided the financial resources needed to invest in
infrastructure, industries, and education.
● Absorption of commercial ideas: Taiwan actively absorbed commercial ideas from Japan and the
United States. This included knowledge about new technologies, management practices, and
marketing strategies.

Debate on the Role of Government Intervention

Some argue that a free market approach was key, while others highlight the success of government
policies like export promotion and import controls. Regardless, Taiwan's economy also benefited from
market forces and incentives to produce wealth.

Other factors that contributed to Taiwan's success include:

● The work ethic and productive attitudes of the labor force: Taiwan's population has a strong work
ethic and a long history of entrepreneurship.
● A long history as an entrepreneurial culture: These cultural factors were conducive to economic
development.
● The initiation of an export-led growth strategy in the early 1960s: Taiwan's focus
● The necessity of economic development as a defense against China

In sum, Taiwan illustrates well the complex mix of factors behind the kind of rapid
economic and social progress often termed a development miracle.

Today, Taiwan is a developed economy with a high income status. However, it faces new challenges such
as environmental pollution and competition from mainland China. Despite this, Taiwan's focus on
high-tech industries positions it well for continued growth, making it a valuable model for developing
countries.
Clarice Angeline / 3303022001
Nathanael Billy H. / 3303022002
Chella Natasya T. / 3303022005
Brian Alvaro / 3303022006
Veronica Shierly W. / 3303022008
Mario A.P.Y. Kabosu / 3303022012