1. Country Study: Taiwan

2. An Overview An export-driven economy A gradual decrease in state intervention with privatization of public sector Agriculture constituted 35% of GDP in 1952. At present agriculture account for only 2% of GDP. Services constitute 71% of GDP Population of Taiwan is estimated at $23 million

3. An Overview GDP per capita $32,000 (PPP) growth rate 4-5% GDP (PPP) is $738.8 billion Population growth rate is 0.23% Infant morality rate 5.35 / 1000 live births Population below poverty line 0.95% Inflation rate 3.7%

4. Development Model Outward-looking industrialization Labor-intensive growth and industrialization Small business sector emphasized in five year plans Government plays an important role. With privatization, role of government is decreasing Aid from U.S. (1950) used for primary and secondary education Land reforms Less dependence on debt In recent years, more skill-intensive growth fueled by biotech and computer industry

5. Development Model Taiwan’s labor-intensive industries (shoes, textile) moved offshore as they were hurt by appreciation of New Taiwan Dollar and rising labor costs After a sustained growth over a decade (7%) in 2001-2002, Taiwan experienced negative growth rate (-2.2%). Bad debt from the banking system, poor government policies and global downturn were among the major causes

6. External Relations In 1971, the U.S. changed its policy of recognizing Taiwan officially Mainland China’s threat-affects internal parties and elections Recently, there are more economic ties with China – tourism, air lines KMT is a major political party

7. Current Problems Global recession Large defense expenditures (3% of GDP) to protect Taiwan against P.R.C. Current leader Ma’s administration has called for diplomatic truce