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Taiwan Economic and Political Miracle; Lessons for Oil Exporting Countries in the Middle East

Taiwan Economic and Political Miracle; Lessons for Oil Exporting Countries in the Middle East

Karimi Moughari, Zahra Associate Professor

2019 Taiwan Fellowship Scholar

Field of Study:

No:

Date:2019/10/22

Abstract:

Taiwan is a relatively small island with a population of about 23.5 million, yet it plays a leading role in the international high-tech industry. Taiwan that was a backward and poor country in the early 1950s, changed significantly in the past four decades and got the ranking of 22nd country in the world regarding GDP per capita (about USD 25,000 in 2018) richer than the European Union member state Portugal (about USD 23,200 in 2018) with especially a very competitive information technology sector. The economic development of Taiwan was one of the remarkable transformations after the Second World War. Taiwan, like Japan raised from the grossest poverty, and entered into the world international markets for advanced technology products. Various important factors contributed in creating a successful transition from a backward agricultural economy to a country based on high tech industries in Taiwan. Supportive foreign aid, good opportunities to get access to international markets for modern technologies and exports of its products, sound economic policies implemented by a competent state, and creative small and medium sized firms have played vital roles in Taiwan’s economic success. This paper investigates the major causes of Taiwan’s success story. The paper is consisted of 8 parts. Part 2, after the introduction, examines the importance of Taiwan economic and political relations with US, Japan and China, as well as investment of overseas Chinese in the economic development of the Island. Part 3 is allocated to the role of government in Taiwan economic changes to show whether Taiwan has been a laissez faire model. Part 4 studies the role of private sector in Taiwan’s economic transformation. In this part the share of large, small and medium size enterprises is investigated. Unlike South Korea that the contribution of large companies was significant during the process of economic transition, in Taiwan small and medium sized firms have a great impact in the Island’s economy, especially in the initial stage of development. In part 5 income inequality and poverty in Taiwan is studied to explain the most important policies to combat poverty and to establish a relatively fair distribution of income. Part 6 studies about the roots and consequences of political changes in Taiwan; how a military government transformed into to a modern democracy and what is the effect of the political transformation on Taiwan’s economic development. Part 7 presents lessons from the Taiwan successful experience for the Middle East oil exporting countries. In the last section conclusion is presented.