Today let’s talk about Taiwan’s famous economic miracle

Out of many Asian countries

Taiwan, Hong Kong, Singapore and Korea developed advance economies

therefore are called the “Four Asian Tigers”

Although Taiwan is more like a kitten then a tiger now

Still, the story of our economic success

has more to it than just the well-adopted government policies

Many recognize Taiwan as one of the Four Asian Tigers

But do not know how the miracle happened

In 1945, the Great East Asia War in the Pacific was terminated

industrial infrastructure in Taiwan built under Japanese rule

like electricity, telecommunication and oil refinery and many more

were destroyed by the Allied Forces

At the time, Taiwan seemed to have no future

and the economy was like “once a good girl gone bad, she’s gone forever”

When the ROC government suddenly became an victorious nation and took over Taiwan

Taiwan’s economy were then influenced by China

and made the Chinese Civil War affect Taiwan

Inflation rate, unemployment rate and public discontent rised greatly

So How did Taiwan

overcome all obstacles and climb its way up?

and how did the economic miracle came about?

Ahem, let’s begin!

In 1949

the currency was no difference from monopoly money due to inflation

therefore national monetary reform took place

40 thousand Old Taiwan dollar

can be exchanged for one New Taiwan Dollar (NTD) that we are still using today

The use of NTD pulled us out from the falling economy influenced by China

and decreased the damage of inflation

but KMT who were in great debt after moving to Taiwan

had no extra fund to help Taiwan’s economic to takeoff …ur nope

I mean to revive Taiwan’s economy

And just when the government was under the pressure of communism and public discontent and was only planning retaking the Chinese Mainland

but had no actual ability to perform the act

a war erupted out of the blue and rescued Taiwan’s economy

It was Hanja

Ahem

It was the Korean War... war... war… simida...

This North-South simida~ Korean War started fiercely...simida yo~

and Mao Zedong, in order to resist U.S. aggression and aid Korea

transferred his army that was originally trained to take back Taiwan, to North Korea

The US then set up a defense line from South Korea to Malaysia

to fight against communism

Although Uncle Sam didn’t valued KMT very much

but no matter what, Taiwan held a key position to the defense line

So Uncle Sam didn’t have much of a choice but to sign the Sino-American Mutual Defense Treaty

Afterwards, all kinds of support came from the US

which was the so-called US Aid

From 1951 to 1965

the monetary total of the US Aid was up to 1.5k million USD

During the time, everywhere in Taiwan

you could see residents lining on the street for supplies

and children wearing underwear made from flour bags with the Sino-American labels

Aside from daily supplies

the US Aid also invested heavily on Taiwan’s agriculture and infrastructure

From Shihmen Reservoir, Siluo Bridge to Central Cross-Island Highway

are all results of the US Aid

In short,

the depressed post-war economy

was rescued by the US Aid fairy

The barely breathing ROC government gradually revived again

Besides the US Aid

The government also had to do something on their own to save itself

In 1949

Taiwan Provincial Government carried out land reform

hoping to improve farmers’ living conditions

the 37.5% Arable Rent Reduction Act that restricted the limit of Arable Rent to 37.5%,

the Public land release that allowed farmers to own public land

and the Land to the tiller act that lets the farmers to keep the land instead of the landlords

These reformations changed the fate of farmers and landlords

The land reform seemed like a great policy

It could bridge the gap between the social classes and save the farmers from suffering

but, it also robbed the landlords of their properties

The Landlords thought

why on earth did the Arable Rent need to be reduced

why on earth should my land be taken away

why on earth is my land not mine after one night

But at that time, Taiwan was in the period of White Terror

Governor of Taiwan Province, Chen Cheng once said

“The 37.5% Arable Rent Reduction Act must be conducted without hesitation.

There might be difficulties, since there are always shameless people who will not follow orders,

but I believe, there are never people who would put their life at risk.”

With just a few words, he frightened landlords to death

Even if they weren’t willing to follow, they kept silent and did as told

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 help developed the textile industry

Wheat sent from the US help developed the food industry

And because of the US aid

Taiwan was able to make noodles, breads and doughnuts

Taiwanese who used to take rice as our staple food

gradually accepted noodles and other flour-made food under promotion of the government

Daily necessities that used to rely entirely on imports

now could be produced and replaced imports

this is the stage called the Import Substitution Period

Until 1960s

The US Aid ended

Besides being a cry baby,

Taiwan had to think of new methods to help the economy

Like the Export Processing Zone set up at that time

and the Investment Incentive Act, carried out by the government

were all method that were hoping to encourage investments and replace the US Aid

The Investment Incentive Act allowed many companies and investors to enjoy tax reduction

But did these profits made from companies really benefit Taiwan?

And did these profits go into the pockets of big enterprises or regular citizens?

Under the assistant of the government, many private companies began to thrive

and those who originally sold rice or done logging became CEOs

In short

Taiwan’s economy turned export orientation

GNI, GDP increased substantially

What an amazing government that rescued the society, right?

But

Exporting won’t work just by planning

we need to have customers as well

Luckily, Taiwan caught up with the International division train

and replaced Japan who was moving on to the next economic stage

and became the OEM of industrial products

That’s why Taiwan started to sell sell sell, and foreigners got to buy buy buy

Wait a sec! There’s something to be clarified

Speaking of the Ten Major Constructions Projects

people seem to consider them the representative of Taiwan’s economic miracle, don’t they?

This large-scale of post-war public constructions

of course contributed greatly to the livelihood economics

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 criticized that it was built for the rich

turned into the transportation lifeline of Taiwan

not to mention the largest airport in Taiwan, Taoyuan International Airport

was off to a flying start and to a flying end….ur nope

Takeoffs are still happening each day

But honestly, some constructions used to be useful

and some aren’t equally useful nowadays

like the Port of Taichung, built to be the international port of central Taiwan

However, it seemed that they missed a few geography classes

causing the port to encounter many problems with tides and silt, and spending the government a great fortune on maintaining

Moreover, the SMALL Su-ao Port was dragged into being a part of the Ten MAJOR Constructions

The result of expanding such a small port caused a large budget deficit

Until the 70s,

under the emphasis put on being environmental friendly

Petrochemical industry and the nuclear power plants in the Ten Major Constructions

although seemed helpful to Taiwan’s economy

but brought out protesters due to the pollution issues

Had the government predicted that some constructions

might be untimely after they were constructed

Perhaps, there are some things you will regret tomorrow if you don’t do them now

but looking at these constructions fails, maybe for a few things

you will still regret tomorrow even if you do them today

After saying so much

we seemed to understand a little more about Taiwan’s economic miracle

In the time of globalization

economic development not only requires our own efforts

but looking out for the international trend is equally important

In the past, the economic miracle seemed like a smooth sailing

however, the sacrifices behind and the side effects it caused

should not be ignored

Environmental pollution and agricultural damage

plus the worsening disparity between the rich and the poor

should teach us a lesson

What kind of a development are we pursuing?

We used to be taught that

Taiwan founded on farming, and went through export processing stage

then relied on light industry, heavy industry, high tech to service industry

blah blah blah...

The economy development was like climbing on a ladder

all we had to do was climb step by step and we should meet success

don’t think, don’t whine, don’t hesitate

But is this how it should work?

Is it possible that a ladder might be suitable for others but not for us?

Or is it possible that we discover nothing at the top of the ladder and find that it is an one-way trip?

Or even if we assume there exist a globally suitable ladder

on which step of the ladder is Taiwan currently stand on?

And where should the next step lead us?

Ok

after saying so much. I am getting kind of thirsty

after drinking this piece of chicken cake(...?)

See you same time next month!

Bye

Taiwan Bar is produced by DJ Hauer

Scripted and hosted by Buchi "it’s our second-to-last episode!"

History context provided by Thomas the choo-choo train, who is dating all the time and have no time for us...

Animated by jiajiach, who stays healthy and pretty and only eats vegetarian pizza

Music produced by DJ Hauer

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Okay, that’s it

Yeah~ we can finally eat the chicken cakes

Hey, where did you get the chicken cakes?

Kris gave it to me

Kris who?

Kris, the boss of Philosophy Philosophy Chicken Cake

Evening, evening, good evening

I am Kris from P. P. C. C.

Starting next month

I will teach you how to make a desert in every episode

And talk a little about philosophy while we are at it

You might have indigestion problem eating while listening to philosophy

But that’s alright, I will eat what you can’t

Evening, evening, good evening, I am Kris

See you next time in P.P.C.C.!