Formosa: Success Story

Like ambitious moonlighters holding down two tough jobs, the Chinese of Formosa are trying to build up their precarious economy while maintaining one of the world's costliest military machines--600,000 armed men in a population of 11 million. To the surprise of Asia, the relief of the U.S., and the embarrassment of Red China, Formosa's economic effort is succeeding. So much so, in fact, that this week Howard Parsons, the new director on Formosa for the U.S. Agency for International Development, told the Taipei press: "Within a few years, Taiwan will be in a position to maintain a viable economy without special economic assistance from the U.S. Government."

Up with Production. Formosa's surprising success is, of course, largely due to the $3 billion in economic and military aid that the U.S. has poured in since 1949 under the watchful eye of the Chiang Kai-shek government. But unlike the sorry case in many other underdeveloped areas, U.S. aid to Formosa has been dispensed wisely and put to work intelligently. Formosa's gross national product has been growing at the rate of 7.7% a year, and industrial production is up 11% from last year. Per capita income has been rising, and so has consumer buying.

Probably the strongest single force in the Formosan economy is the U.S.-Chinese Joint Commission on Rural Reconstruction, which has worked on some 3,000 economic projects and carried out a much-needed distribution of farm land that has benefited half a million Formosan fami lies. The commission created a whole new export industry by teaching farmers in 1959 to raise mushrooms; this year Formosa will export 1,000,000 cases of mushrooms worth $10 million. Formosa has become the world's largest pineapple exporter ($12 million worth last year), thanks largely to the fact that the commission taught local growers how to raise their yields. Altogether. Formosa's farm exports hit $140 million in 1962.

Up with Hotels. Foreign businessmen complain about Formosa's niggling bureaucratic controls and steep interest rates (up to 30%), but many have overcome their misgivings under the lure of a 1960 tax incentive law. Socony Mobil Oil, Allied Chemical and a Chinese partner have set up a $22,500,000 joint fertilizer venture. American Cyanamid has joined with the Taiwan Sugar Corp. to set up a $2,000,000 antibiotics plant. Together with Chinese partners, Procter & Gamble is building a detergent-manufacturing plant. Atlas Chemical an industrial dynamite plant. Singer sewing machine, Harvey Aluminum and Gulf Oil plan to come in soon.

Formosa's successes do not mean the end of its economic difficulties, but they do mean that the island is approaching what Howard Parsons calls "a position of self-sustaining economic growth." The Formosans are learning fast. Aware that the 1964 Olympics will be held in Tokyo, they have built three new hotels in Taipei, are building three more. Purpose: to siphon off a good number of money-laden tourists on their way to or from Tokyo.

This file is automatically generated by a robot program, so reader's discretion is required.