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Analysis on the Application of Developmental State Model in the Case of Taiwan

Introduction to Taiwan
Introduction
It has been in the interest of many researchers from different fields to study the story that
the Newly Industrializing Countries (NIC) like Taiwan have went through in order for them to
become a developed country in a relatively short period of time. Although many accounts have
already tried to explain the exact phenomena that have happened or have been happening in
Taiwan, in particular, most of it still lack certain elements that would have explained some key
changes in the domestic economy during the development period. In this essay, the writers attempt
to tell the full story of Taiwans development by examining the conditions of Taiwan before and
during the rapid development period and by disaggregating its policies in several aspects relative
to its nature.
Geopolitical Characteristics
Taiwan or Republic of China is an island nation located in East Asia in the southeastern
coast of mainland China, situated in the western Pacific Ocean. Countries that are near Taiwan are
Japan in the north and Philippines in the south (Library of Congress, 2005). Its exact coordinates
are 2503'N latitude and 12130'W longitude (Maps of the World, n.d.). Taiwan usually experience
a long summer and a short, mild winter. The north and central regions have subtropical climate
while southern regions have tropical climate. An average of four typhoons hit the island every
year.
According to World Stat Info (n.d.), Taiwans total land area is around 36,000 square
kilometer (14,400 square miles). It is consist of 30.3% arable land, 52.7% forest land and 17%
others. Sea coast is about 1,600 kilometers long. Taiwans population was estimated to be at 8
million in 1950 where as it grew to 19.4 million in 1986.
The soil in Taiwan was inherently infertile although through the use of fertilizer, it was
able to produce sizeable amount agricultural products which made up its economic foundation.
Sugar and rice were its principal crops while pineapple, mushrooms, asparagus, sweet potatoes,
tea and bananas were also produced primarily for export (Ranis & Fei, 1988). Although forest land
was its biggest resource, wood production was found to only have a very small contribution to the
economy as most of its part were either inaccessible or of poor quality (Library of Congress, 2005).
Furthermore, fishing industry was inherently bountiful due to its geographical location. Coal,
marble and natural gas were also available.

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Since the retaliation of Republic of China (ROC) in Taiwan in 1949, the countrys
government has evolved to become a multiparty democracy. In this type of government, the
president is the head of state and commander-in-chief of the Armed Forces (Department of
Information Services, Executive Yuan, 2014). Under the president is a central government consists
of five Yuans (branches) namely: executive yuan, legislative yuan, judicial yuan, examination
yuan and control yuan. The executive yuan is headed by the premier which is selected by the
president. The legislative yuan is the sole law-making body. The judicial yuan supervises the
processes of the court systems. The control yuan oversees the other branches of government and
is an investigatory agency. The examination yuan is in charge of administering the nations civil
service exam which is the highest examination organ (Department of Information Services,
Executive Yuan, 2014).
Japanese Rule and World War II
Taiwan during its earlier periods was the trading hub between Southern China and
mainland China. During the 17th century, China let the Dutch govern Taiwans economic system
which led to the establishment of the Dutch East India Company. The Dutch East India Company
established different trading posts in the country allowing commerce with China, Japan, Korea,
and South East Asia through the exportation of sugar, animal hides, carvings, and certain lumber.
Subsequently a war broke out in Taiwan which resulted to Chinas repossession of power
over the prior country. The re-establishment of the Chinese regime in Taiwan led to the
construction of a Treaty Port System that linked 4 major Taiwanese cities with the other cities.
Furthermore, in order to drive the Dutch away, majority of the agricultural reforms were mainly
implemented for the purpose of sustaining the military with their daily needs. This, however, did
not cease Taiwans commerce with Japan and Great Britain.
Moving forward to 1845, the Japanese gained control over the country due to the peace
treaty made between China and Japan. Under the new regime, Taiwan experienced great economic
surge due to various infrastructure development undertaken. In contrast to other colonized
countries, Taiwan was allowed to divert from its mother countrys agricultural production as it was
considered to be a compliment to Japans agricultural appendage, with Taiwan producing majorly
rice and sugar. In addition, commercialization of agriculture in Taiwan significantly progressed
primarily due to the agricultural system it had wherein small scale farmers and tenants were
combined with big Japanese capitalists (Myers, 1972).
On the other hand, with Taiwan carrying over the landlord-tenant system from the Chinese
administration, Japan institutionalized land reforms to modify the system. The Japanese
implemented property rights in order to organize the land taxation and transactions. The Japanese
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provided incentives for the landlords to produce more by decreasing their taxes which squeezed
out their tenants to the maximum. These tax incentives provided by the government reassured that
there will be minimal opposition from the landlords on taxation purposes. Not only did the tax
reforms provided better incentive to produce but it also provided Japan to shoulder the intensive
financing in its agricultural endeavors in Taiwan providing greater financial support other than the
Diet allocation from the mother country (Rubinstein, 2006).
Furthermore, Japan spearheaded bio-technological advancement, seed strain development,
increase profit provision and agriculture expansion as well (Amsden, 1979: 346). This, however,
was not just to make Taiwan to be self-sufficient in the future but to be its exporter of raw materials
and importer of produced goods and physical capital in the long-run. Initially, this hindered the
utilization of Taiwans industrial progress but plans were later constructed before the Second
World War (Amsden, 1979: 347).
By this period, Japans great involvement in the war distorted Taiwans economy. Major
structural shift happened wherein military and defense support was prioritized in the production.
Allied bombing also caused very severe damage to local infrastructures which further halted its
development (Ranis & Fei, 1988). Cessation of trade with the Japanese stopped its importation of
fertilizer which greatly affected Taiwans agricultural output.
Republic of Chinas movement to Taiwan
In 1949, after the loss of Kuomintangs Republic of China with Mao Zedongs communist
party in the Chinese civil war, the former government together with some 1.6 million people
retaliated to Taiwan. This aggravated the inadequacy in production and deficit in fiscal budget.
Hyperinflation in mainland China and Korea further worsen the situation. This posted a challenge
to the very core of Taiwans stability.
Rapid Development Period
The countrys experience in late 1940s and early 1950s pressured the government to
establish concrete plans in order to ensure that the economy would not collapse in the process. A
lot of policies were implemented to address the current problems of the society as well as to
establish a foundation to Taiwans development. In this paper, these policies are categorized to ten
classifications namely: domestic, external trade, interest rate, foreign exchange rate, international
capital movement, government, agriculture, manpower and development, science and technology
and economic development planning. Furthermore, the paper indicated two turning points in the
economic progression of Taiwan which are its transformation from import substitution to export
orientation in 1962 and the initiation of technology orientation in 1980.

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Domestic
With a huge threat in its security, Taiwan spent a lot of its budget to defense spending.
Given the low income level at that time, the government had a hard time collecting enough taxes
to fund all of its project which created huge amount of budget deficit. In order to partially answer
this problem, the government implemented in 1955 a consolidated income tax policy that
decreased tax deficit in the succeeding years. By 1961, budget surplus came to be realized through
progressing economic activities and decreasing government spending due to less market
intermediation. That was why, in 1986, value-added tax policy was implemented, supporting the
goals of the government of economic liberalism.
External trade
One of the ways Taiwan used to promote industrialization was to established importsubstituting industries. This was done to decrease the dependency of the country to foreign imports
and to establish trade balance. Here, industries were created based on the products that Taiwan
usually imports. Since these industries were new to the competition, an edge was needed in order
for these businesses to thrive. The edge that the government used to promote these local industries
was the introduction of a rigid tariff protection and import controls most especially to products
that has a local counterpart. Furthermore, after these industries were successful to penetrate the
market, the government further extended its hand by giving custom duty rebates on exports.
However, these still were not enough to promote creation of industries primarily due to
complex and rigorous process of business application in Taiwan during the early 1950s. This did
not only hindered the investment of foreigners but of locals as well. The government was able to
recognized this problem early enough to conceptualize and actualize the idea of export processing
zone (EPZ) in 1966. EPZs are free trade zones that are not just relatively free from importation
and exportation controls of the government but also has used a more simplified administrative
processes. Although in its early years, only importing industries can be built inside the EPZs and
that its products cannot be sold inside the country, a significant number of firms have filed their
application. By 1986, 239 firms were already operating inside the EPZs and a cumulative
investment of $459 million was reached (Ranis & Fei, 1988). Later on, due to the increasing
liberalization in Taiwan, the usefulness of industries locating inside the EPZs became minimal.
Firms at the EPZs also began to resent some limiting regulations such as prohibition of selling
goods at the domestic economy. This was eventually relaxed although firms were still not satisfied
with the government giving only specific approvals.
Interest rate
Due to the hostilities that happened during the mid-1900, prices in the global market spiked
which led to high inflation rate in the domestic market of Taiwan. Since a prolonged high inflation
makes business more unpredictable and people more cautious, the government tried to stabilize
the prices of goods and services through the implementation of high interest rate policy. This was
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done to limit the money supply in the local economy. This policy was a success as prices became
stable in the succeeding years.
After almost 30 years, the government initiated interest rate liberalization in 1980 (Ranis
& Fei, 1988). The government no longer dictates the level of interest rate and let the market forces
to determine it. By 1985, interest rate regulations were discontinued. Through this, Taiwans
financial markets flourished and investments further increased.
Foreign exchange rate
In its early years, Taiwan implemented a unitary exchange rate system. This was beneficial
to industries especially to export industry as they faced no exchange risk. However, this made the
New Taiwan dollars to be undervalued and it became harder to manage due to exports far too
exceeding the values of its imports. Thus, in 1978, a floating exchange rate system was introduced
and in 1983, foreign exchange regulations were rationalized and amended (Ranis & Fei, 1988).
International capital movement
It is commonly belief that Taiwans miracle growth was primarily due to international
investments. Although it is necessary for Taiwans development to initiate, it is not necessarily
sufficient. Initial reconstruction of the country after the aftermath of the Second World War would
not be possible without the aid given by the United States through U.S. Aid. Through the different
policies implemented by the government to make the investment climate of the country
encouraging to foreign investors, international investments rapidly surged and increased through
the years.
Government
Taiwan's development started around the 1950s, a few years after World War II. The
government closely managed and controlled the economy during its early stages of development
but gradually relaxed after seeing signs of rapid growth and continued development. It was
imperative for the government to exert control over the economy especially when the development
was still starting because it provided them with the people's much-needed guidance and motivation
which steered them into the right direction. Some of its roles include: 1) maintaining a stable and
law-abiding society, 2) strictly implementing their policies, and 3) formulating programs that will
serve as catalysts for national development.
1. Transfer of four major government enterprises
Up until the 1960s, the government kept a close eye on the economy. The government
supported emerging industries and protected them against external competition. Restrictions were
imposed on setting up new plants in industries where demand for a product is already satisfied
domestically but lacked the potential to export. Because of this, competition in the protected
industries was softened.
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When Taiwan was freed from the Japanese and were held by ROC in 1945, the government
had control to most industrial properties. During that period, the country was lacking both
entrepreneurs and capital for private operation. In 1953, the land to tiller program served as a
means of privatizing the four major government enterprises namely Taiwan Cement Corporation,
Taiwan Paper and Pulp Corporation, Taiwan Industrial and Mining Corporation, and Taiwan
Agricultural and Forestry Development Corporation (Chen, 1964). Huge landowners would be
paid part of the land price in the form of stocks of government corporations which would later on
be transferred under private hands in exchange for land which would be given to tillers.
The triumph of the Taiwan Cement Corporation was the most notable. Under Koo Chenfu's leadership, Taiwan Cement Corporation ranked first and produced more than half of the
cement. Taiwan is the fourth largest exporter of cement with a yearly export of 1 million metric
tons per year and an annual production of 2.3 million metric tons.
2. Major Development Projects
During the financial crisis in 1973, Taiwan also had to deal with a national crisis of
confidence and a threat to its survival (Taipei City Government, n.d.). Under the ruling of Chiang
Ching-kuo, Chiang Kai-shek's son, the government revealed its Ten Major Development Projects
which includes: North-South Freeway, the Taoyuan International Airport, Suao Harbour,
Taichung Harbour, railway electrification, the North-Link Railway, petrochemical industry
development, steel mills and shipyards in Kaohsiung, and three nuclear power plants. This sparked
hope in the eyes of its people and was the core for Taiwan's economic miracle during the 1980s.
The previously mentioned projects totaled $8 billion. An underlying problem on how to
generate the funds needed for the projects persisted because it was during this time where the oil
crisis was still rampant and national income was low. Government investments shouldered 60%
of the funding while the rest were from foreign lenders (Li, 2002).
3. Twelve new development projects
Another project by Chiang was the Twelve New Development projects. This started in
1978, a year before the completion of the Ten Major Development Projects, and finished in 1986
where its purpose according to Ma (1997) was to carry on with the construction of infrastructure
and promote cultural development in Taiwan. The twelve projects included: Island-wide
Transportation Network, Kaohsiung Free Trade and Ecology Harbor, Taichung Asia-Pacific SeaAir Logistics Center, Taoyuan International Aviation City, Intelligent Taiwan, Industrial
Innovation Corridors, Urban and Industrial Park Renewal, Agricultural Village Revival, Seashore
Regeneration, Greening Afforestation, Flood Control and River Rectification, and Sewer
Construction (Department of Investment Services, n.d.).

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4. Fourteen major infrastructure projects

During Chiang's second term of presidency from 1984 to 1988, another achievement was
the completion of the Fourteen Major Infrastructure Projects. Like the two other projects, its main
purpose was to expand infrastructure constructions in Taiwan. The Fourteen Major Infrastructure
Projects put emphasis on medical care and domestic tourism (Ma, 1997).
Agriculture
Agriculture played a key element in the development of Taiwan. After the World War, the
country was greatly in need of sustenance since they have been badly affected by the hostilities.
In the end of the World War II, the agriculture sector emerged and this occurrence brought great
progressions to the nation. According to Huang (1998), there were three historical phenomena that
transpired in Taiwan. The first is the emergence of the social classes of full owner-cultivators
where the fading of tenants caused the land reform policy to take place. Moreover, this incident
changed the dedication of the farmers which produced the modernization of the state.
Subsequently, the emergence of the middle class demonstrated a transfer to the industrial society.
Furthermore, the number of farmers gradually deteriorated and the agrarian experience weakened
resulting to the shift to the industrial sector. Lastly, the emergence of a middle-class intelligentsia
emphasized on popular education which proclaimed the democratization of Taiwan.
Certain events led to the significance of the agriculture industry in the land of Taiwan.
During the retaliation of the Chinese government in 1949, an enormous amount of people relocated
to Taiwan where majority of them were involved in the army. People lacked basic necessities
which increased the responsibility of the government. As a result, the government exchanges
fertilizers to local farmers for rice which was advantageous to both parties (Ranis & Fei, 1988). In
addition, the land reform policy that was implemented played a very essential role to the lives of
the farmers. The reform came to pass in four stages: (1) leasing government-owned land to tenants;
(2) 37.5 percent shares on privately-owned farmland; (3) the sale of public land to farmers; and
(4) the land-to-tiller program (Yueh, 2009). Moreover, the payment of the farmlands to the tenants
was spread over 10 years which was very beneficial to the households. Over 139,000 hectares of
land was distributed. Overall, the land reform decreased income inequality and the proliferation of
national savings and public investments took place. The government created policies which were
truly for the assistance of the domestic.
The rise of the agrarian culture was mainly because of the success of the land reform during
the 1950s. The attitude of the farmers expressed a great pride and devotion to the agriculture
sector. In addition, they had an optimistic viewpoint in life which further increased their interest
in their cultivation. As stated by Huang (1998), one source for the success of the land reform was
that policy makers were separate from the land owners which made land reform procedure a
relatively affair. Another is that the policy makers in the inland were dedicated while those in
Taiwan did not hesitate since they were fresh from the harsh experience that they went through.
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Additionally, they had a genuine allegiance in politics. Lastly, the public was fervent to restore the
unjust distribution of land from the Japanese Era. The modification of the social awareness of the
farmers reorganized the association of the farmers which functions to include the sales and
promotion of the agriculture business.
The fall of the agrarian culture was mainly devoted to the beginning of the industrial
development in the state of Taiwan. During its rise in the 1960s, the deterioration of the agrarian
sector led to the alienation of the farmers to their land-dwelling. The major components of the
agrarian crisis in the 1960s had two main components which was attributed to land and income
(Huang, 1998). The land was treated as a mere commodity which was to be brought up by the
speculators which sold it at a very expensive price. Since there was an extreme drop in agriculture
prices, there was a sudden influx of imports from the overseas countries. In addition, the income
of the farmers declined which resulted to the rejection of the traditional monolithic farming. These
individuals lost faith in the agriculture sector which led to their change in attitude. The
mechanization of farming occurred where the people are embolden to leave their old vocation and
join the new industry since higher compensation was attributed to the manufacturing industry
(Ranis, 1988).
Even if the agrarian reform brought great advantages to the community, there are still
economic consequences that arose. For instance, the profits of rent reduction and the sale of public
land have not been equivalently distributed and there was a surplus from the agriculture to the nonagriculture sector (Koo, 1966). People may be benefitting but the amount of assistance that they
received was not effectively monitored. Furthermore, the rice produce did not surge essentially
after the 1953 land-to-tiller program and it basically had statistically insignificant results on
productivity (Tseng, 2004). Overall, the land reform reduced income inequality but it did not help
in the productivity of the agriculture sector.
Manpower and Labor
The developmental state model of Taiwan was a boost in almost all of the sectors in the
economy. It was clear how these sectors especially the agricultural sector was affected by this from
the previous paragraphs. However, it is worth mentioning that there are specific policies which are
targeted to the service sector. These types of policies have first-hand effects towards the citizens.
We shall call these policies that affects Manpower and Labor.
In terms of compulsory education, Taiwan education system consists of six years of
elementary education and three years of junior high school education since 1968; which is a total
of 9 years of compulsory education. However there are recent reports that it intends to increase
this number eventually to twelve years, to the hopes of creating and molding a more complete
educational structure.

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The second point is a heavier topic since it does not only apply to Taiwan but also to many
other countries such as Japan. This is the issue of Family Planning. In the 1960s, Taiwan
implemented a family planning program and it was successful since there was a rapid decrease in
the fertility rate; and was even praised by the huge accomplishment. However, it is seen that this
exact thing that was celebrated 50 years ago may be one of the largest problem of Taiwan today.
The continuing decrease of the fertility rate in the country is alarming since these extreme low
birthrates may result to rapid population aging that may bring out negative socio-economic effects.
This unintended consequence is now being targeted by the government through its Mega Warmth
Social Welfare Program (MWSWP) of 2006. This specific program includes maternity leave
benefits, parental leave benefits and a childcare subsidy system.
In terms of promotion of vocational, education and manpower training, the dynamic
evolution of national planning is to thank for. The vocational education system is a success since
its framework was modified to adapt to appropriate times to achieve high quality and quantity
goals for the economy. This all allowed the vocational education system to flourish and to continue
and provide the people various types of skills and expertise that they may practice to contribute to
economic development. It is also worth mentioning that even in the early stages of the
development, the government even encourages the citizens to attend these vocational school rather
than to pursue their tertiary education.
Around 1976, while Taiwan was experiencing their growth, their educational goal was
revised into teaching applied science and technology to train professional personnel with practical
skills. Though this is a good mission. The completion of this results to the citizens all wanting a
higher paying job. Right now, there are few people willing to work in the agricultural sector and
because of the low birthrates more are retiring rather than entering the workforce creating a scarcity
of workers.
With all these said, we are now going to tackle the protection that is being provided by the
government to their labor force. In this case, they created a Labor Standard Law which protects
the right of the workers. Issues such as workers welfare, labor-management relations, safety and
health, appropriate quotas for foreign workers and gender equality are all big parts that was
clarified by legislation. In comparison to the Philippines Labor Code most of the focuses are
similar; but is worth mentioning that the gender equality issues are being tackled more in Taiwan.
An example of this are day care systems that would allow the moms to go to work not worrying
about their childs safety.
The early and sustained efforts of Taiwans human resources in terms of scientific and
technical fields has its importance. The result was Taiwans emergence in the international
knowledge-based economy. In addition, its emphasis on human skill development led to its

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flourishing information technology sector. Taiwans success even led to Chinese mimicry in terms
of state-led policy (Rubinstein, 2007).

Science and technology

The different institutions and policies toward the development of science and technology
in Taiwan is perhaps the most important factor that has allowed Taiwan to sustain its growth
momentum until the 90s. With a shift in the global production patterns occurring in the 80s,
Taiwans timely industrial upgrading has allowed the country to take advantage of this shift in the
production network (Naseemullah, 2012).
The industrial upgrading of Taiwan, together with its stable governance, has allowed the
country to be highly attractive for both American and Japanese foreign direct investments of hightechnology goods such as automobiles and electronics. Moreover, these allowed giant
multinational corporations to set up their plants in Taiwan, and in effect, increasing the value of
the production in Taiwan.
Aside from the countrys state capacity, Taiwans commitment for high-technology
production through its national industrial policies have paved the way for the Taiwan miracle to
happen. In 1973, Taiwan launched the Industrial Technology Research Institute (ITRI), and by
1978, it has launched the Science and Technology Advisory Group (STAG). Through the creation
of these institutions, Taiwan was able to channel its high-technology investments through their
small and medium enterprises which resulted to inclusive growth in the country.
It is because of these policies that Taiwan and the rest of Northeast Asian countries have
experienced growth way beyond the grasp of most Southeast Asian countries. Furthermore, the
proactive approach of the government of Taiwan on its Research and Development has allowed
the country to remain competitive during the shift of demand to high-value, high-tech industries
in the 90s.
In recent times, Made in Taiwan is considered to be of high-quality products and will
most likely maintain this image in the coming years. With Taiwans tax break on high-value
strategic investments, its development of a Science Park, and its 10-year Science and Technology
Development Plan, Taiwan will remain highly competitive in the region despite the tough
competition it faces with the developed and developing East Asian countries.
Economic Development
National Development Plans

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The Taiwanese government has been acclaimed for achieving significant economic
development through a mixture of successful economic plans and policies that helped promote
economic growth and industrialization. Noted that Taiwans development are divided into three
main periods, these periods can be attributed to the succession of four-year and six-year national
development plans. This began after the withdrawal of Taiwan from Mainland China with the help
of experts from USAID.
The first four-year national development plan occurred during 1952 to 1955, which goal
was for the textile industry to support the governments manufacturing import substitution policy
(Chen Chui, 2007). This plan emphasized reconstruction, due to the aftermath of the war, and an
increased production of rice, fertilizers, and hydroelectric power. This was supported by the
government through providing tax incentives to those who are importing machines for the purpose
of producing textiles. This resulted to the rapid growth of the textile industry wherein the value of
cotton-yarn production doubled within four years. The second four-year national development plan
further encouraged import substitution industries. This period focused on improving the quality of
their products while meeting domestic demand. This growth resulted for the textile industry to start
exporting their products. This was followed by the third four-year plan, which focused on laborintensive export industries and further growth of agricultural industries.
The USAID assistance ceased at 1965, which led to the development of the fourth and fifth
four-year national development plan. This period marked the rapid and significant growth of the
exports sector. This sector was the fruit of the massive growth of the agricultural industries, which
lead the textile industry to be export-oriented during the mid-1960 until the mid-1970. It is during
this time that Taiwan registered high increases in its exports of manufactured goods, which led
them to have consistent trade surpluses. This led the government to shift its priority from laborintensive industries to capital-intensive industries. This was followed by the sixth four-year plan
that aimed to continue the rapid growth of exports. This plan was eventually replaced to a six-year
national development plan due to the inability of the sixth four-year plan to sustain high GNP
growth because of the recession that occurred.
Council for United States Aid (CUSA)
It was during the late 1940s to mid-1960s that the United States Agency for International
Development (USAID) provided help to the Taiwanese government through economic aid,
technical assistance, and agricultural commodity aid while Taiwan was recuperating from the
aftermath of the war. This was established as part of the Sino-American Economic Aid Agreement
that both the Republic of China and the United States made. USAID is an agency that commits
itself to help neighboring countries all over the world, which was mostly in the form of spurring a
nations agricultural and rural development. It was through this Agency that the Taiwanese
workers gained sufficient technical training that aided them as they produce agricultural products.
This made progress of Taiwans agricultural sector particularly faster.
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Taiwans Economic Council

The CUSA was eventually dissolved due to the cessation of financial assistance provided
by USAID. This led to the reorganization of CUSA into the Council for International Economic
Cooperation and Development (CIECD). The purpose of this council was to spearhead economic
plans and had the power to create economic policies. In 1973, the Taiwanese government again
reorganized CIECD into the Economic Planning Council that made it a mere advisory agency by
separating the policy-making power to another government agency. The Economic Planning
Council would once again be reorganize into the Council for Economic Planning and
Development, which was revitalized to become a supraministerial agency (Aberbach et al., 1994).
It was responsible for all concerns with regards to national economic development such as the
drafting of policies and assessment of economic plans of the Taiwanese government. This would
then be dissolved and be replaced by the National Development Council, which was inaugurated
under the Cabinet by the Taiwanese government.
New National Development Plans
Taiwans six four-year plans would eventually be replaced into a series of six-year national
development plans in order to cope up with economic needs that the country faced. The first sixyear national development plan focused on the expansion of basic industries and the development
of ten major infrastructural projects. This plan was a product of the countrys drive to progress
technologically. A series of six-year development plans would be made, which focused more on
transportation, power generation, telecommunications, and pollution control. This eventually led
the creation of the more recent six-year development plans to focus more on meeting the worlds
standards in technology, increasing GDP growth, reducing unemployment, and increasing foreign
visitors in the country.
Conclusion
Through the policies stated above, one can see the huge role that the government played in
the development of Taiwan. How the government was able to create policies that would suit the
resources and opportunities of the country. It can be seen that like most developed countries,
Taiwan also used the infant industry model to promote industrialization and economic growth.
This proves that Taiwan was able to implement the developmental state model.

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