Salient: Victoria University Students' Paper. Vol. 28, No. 11. 1965.
3-Stage Growth Plan
3-Stage Growth Plan
Taiwan—15 years of progress
Dr. Lew talks to the Asian Studies Society
The development and economic viability of Taiwan have been a matter of world interest, Dr. Daniel Lew told a recent meeting of the Asian Studies Society.
Dr. Lew, a Ph D graduate from Harvard, is a former Professor of Government at Tsinghua University in Peiping. He is now Nationalist China's ambassador to New Zealand.
He told members of the Society that Taiwan was nearly bankrupt when the Korean War broke out In 1950. Farm productivity was extremely low; industrial output was almost non-existent. Inflation was incipient, unemployment was high and living standards low.
Yet today its Gross National Product had more than doubled; its per capita income has risen to almost £60 a year, the second highest in Asia, industrial production has more than doubled, and electric power output is over one million kilowatts.
"United States aid had been one of several important factors which have made possible the remarkable economic achievements of free China," said Dr. Lew.
Excluding military aid, the USA had provided roughly one-third of the capital investment for Taiwan's economic and social development.
Dr. Lew told the meeting that land reform was an indispensable pre-requisite to the economic development of Taiwan. The Land Reform Programme was carried out in three stages.
The first was to reduce the land rent (generally about 50 per cent) to a uniform rate of 37.5 per cent of the annual main crop. This increased earnings of tenant farmers, and at the same time made landmarks lords more willing to sell their land as its proportionate rent value fell.
The second stage was to sell cultivated public lands to tenants over a 10-vear investment plan. Over 120,000 tenant farmers bought 151,000 acres on this basis.
The third step was the redistribution of privately rented land by limiting the size of the land hold-lings. Some 340,000 acres of excess land were purchased by the Government at fair prices and resold to tenant families.
Some landlords invested the proceeds of their land sales in new industrial enterprises.
Dr. Lew then explained the function of Taiwan's economic development plans.
The First Plan (1953-56) gave emphasis to increased production of consumer goods.
In the second plan (1957-61) an effort was made to broaden the industrial base. During this period the growth of private enterprise was accelerated. Private ownership of industrial concerns rose from 39.5 per cent in 1952 to 66.8 per cent in 1963. Private industrial concerns were floating substantial bond issues. Taiwan was demonstrating that a low-income, newly developing area, can create a capital market.
The Third Plan was aimed at increasing the rate of growth in national income through private and public investment. Special efforts were made to attract American and overseas Chinese private capital. Already 119 factories in Taiwan are owned by overseas Chinese.
Dr. Lew suggested that industrial expansion is primarily responsible for the great increase in Taiwan's international trade. In 1964 his country had a total trade of 875 million USA dollars. In the same year Taiwan had an export surplus of 52 million USA dollars.
The Formosan economy is now sufficiently well developed to be able to get by without USA aid. In fact, the Nationalist Government now finds itself in the position of extending a Foreign Aid Programme to 50 other countries in Africa, the Middle East, Asia and Latin America.