How Political Conditions Have Affected the Economy in Taiwan

How Political Conditions Have Affected the Economy in Taiwan from 1949-2009
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How Political Conditions Have Affected the Economy in Taiwan from 1949-2009
Economic stability is the primary determinant of the welfare of a country. This is because it gives us a closer look at the financial stand. Countries with stable economies are prone to development since there are chances of progress. Underdeveloped countries have a struggling economy while developing and developed countries are in a better position. Multiple factors may determine the economic welfare of a nation. Some of these factors include civil wars and political stability. Usually, peaceful countries seem to be prospering economically. On the other hand, the economic situation in countries where there are political instability and civil wars, the economics of the said country is unstable. This leads to underdevelopment since the resources are not utilized extensively. The essay discusses how political conditions have affected the economy in Taiwan from the year 1949 to 2009.
The Republic of China, in other words, the national economy of Taiwan is ranked the 7th largest economy in the continent of Asia. This recognition has led to Taiwan being included in the group of countries with advanced economies by the International Monetary Fund. Also, the economics of Taiwan is estimated by the World Bank to be among the high-income economies group in addition to holding position 15 worldwide in the Global Competitiveness Report. The list of achievements continues, and the economy of Taiwan is remarkably developed as it was ranked position 22 in the whole world by Purchasing Power Parity. Being ranked number 24 about the Gross Domestic Product is also a milestone in the economy. Last year, telecommunication, financial and utility services in Taiwan were named to be the three highest paid sectors by the individuals.
There is a quite good reason why the economy of Taiwan was at the top of the mountain in the Global Entrepreneurship Index (GEI) in the year 2015. This is mainly because there has been privatization in most of the government-owned firms in the country. Family owned businesses have also evolved and are now the determinants in the economy of the country. The economy of the country is centered on technocracy. Technocracy is a way of governance where the decision makers are chosen mainly because of their expertise in the concerned areas. With the economic planning being based on technocracy, there has been notable growth of about 8% in the Gross Domestic Product. After World War II, there has been significant growth in the export sector.
The rates of unemployment and inflation have gone low. This is because there are upcoming business opportunities every single day. Agriculture, on the other hand, has also played a significant role in the rising economy. In the GDP, agriculture contributes up to 3% and makes up over 70% of the economy of Taiwan. The traditional industries which required much labor are being pushed aside and replaced with more technologically advanced industries. The manufacturing industries, for example, have advanced by using automotive equipment reducing the work needed. The Economy of Taiwan has become a vital partner in the electronics industry. The electric sector and manufacturing of personal computers strengthen the Information Technology sector of the economy. This gives Taiwan the upper hand in learning from the more advanced areas in other countries.
The Institute for Information Technology is the brains behind the massive success in the IT industry and development of the ICT sector. Also, the Industrial Technology Research Institute together with its global associates is the most advanced center for research in applied technology for the economy of Taiwan. Participation in international trade has allowed Taiwan to actively invest in other countries around the world like Vietnam and Thailand among others. There have also been significant investments in the country from people outside of China. The financial policy laid out by the major banks of Taiwan is stable and conservative. This is the reason why the country suffered a financial crisis from 1997 to 1999. The economy of Taiwan is made up of small and medium-sized businesses unlike in the neighboring countries of Japan and South Korea (Jones, 2019). The ten major construction projects that happened around the 1970s have made Taiwan be among the states with a newly industrialized economy. Ever since 1990, the economics of Taiwan has implemented liberalization of the economy, and it has proved successful. To mention a few, Taiwan is an active member of the World Trade Organization and the Asian Development Bank. China, USA, Japan, Hong Kong, and the European Union were the top five trade partners of Taiwan in the year 2010.
Political stability is one of the primary critical determinants in a country’s economic growth. Using Taiwan as the case study, political conditions that portray the stability level of the land influenced the financial position of the country from 1949-2009. One of the preliminary elements in the economic progress of Taiwan has been an amalgamation between the private sectors in the country and the government, which is an element that has helped the country to join efforts in enhancing the employment level in the country and ensuring that the economy grows extensively (Been-lon, 2011). The central government has been quite supportive in providing that Taiwan grows to become an economic powerhouse as the central government is an essential determinant in ensuring that a country develops economically. Other than enhancing industrial growth, the central government has also tried to maintain political stability by creating a conducive environment to enable people to work towards the economic growth of the nation.
One of the fronts that have made the economy of Taiwan to grow well is tremendous agricultural growth. Taiwan has had extensive growth in the field of agriculture as agriculture helps to feed the nation and with good agricultural extension, people would spend much on local made food products which allow the economy to grow well. The central government ensures that the docket of agriculture runs well as well as subsidizes the agricultural to ensure that this branch is quite progressive (Wan, 2016). Agricultural progress in Taiwan has been an element that that has helped the economy to progress as well as enhance the living standards of people in the country. The government has offered support such as through fertilizers, and the government has also helped the textile industry to grow subsequently.
The central government has also been encouraging the growth of small enterprises to enhance employment in the country....