The role of the state in industrialization and modernization in Taiwan during the process of international economic integration in the period 1961-2003 - Lessons learned and the possibility of application to Vietnam

comparison in the international division of labor system. In other words, the state must play a strategic orientation role and have policies to support businesses to improve their competitiveness to increase exports.

g. On investment policy and development of technical infrastructure

In industrialization and modernization, to facilitate the development of economic sectors, it is necessary to have a commensurate technical infrastructure, including transport infrastructure, energy supply systems, information and telecommunications infrastructure, etc. Practice in many developing countries shows that due to slow economic development and limited potential, the infrastructure is often weak and cannot meet practical requirements. Therefore, the construction and development of a technical infrastructure system is an urgent requirement, not only a premise to ensure economic development but also directly contributes significantly to the process of rapid growth towards modernization, contributing to restructuring and improving the competitiveness of the economy.

In reality, the private sector is often unable and/or unwilling to invest in infrastructure construction due to the nature of this activity requiring large capital and a long payback period. Therefore, only the state can afford to build and provide technical infrastructure for the economy. If the state does not undertake the construction of infrastructure, no other economic and social force can undertake it effectively. That demonstrates the state's efforts to invest in serving industrialization and modernization.

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In addition to direct investment, the state needs to tap the potential of the private sector, not as a substitute, but as a supplement to the state in building and providing infrastructure. On the one hand, the private sector can directly participate in infrastructure provision services. On the other hand, the private sector can contribute indirectly through tax payments and the government will allocate a larger proportion of the budget to invest in infrastructure.

In short, in addition to direct investment from the budget, the state needs to have a policy to mobilize other capital sources from the private sector and from abroad into the field of infrastructure development.

In many developing countries with limited capital for infrastructure construction and development, it is inevitable that the state must select key investment items in the entire investment portfolio. The principle of selecting construction and development of infrastructure items must have the effect of stimulating domestic demand and stimulating economic development at the maximum level. From that point of view, the construction of transport infrastructure, energy, information - telecommunications and urban infrastructure can be considered as key investment points because this can promote the development of related industries thanks to the construction of infrastructure and the promotion of urbanization will lead to the development of industries and services, creating conditions to attract more surplus labor from agriculture. At the same time, the state's policy of investing in developing infrastructure to serve industrialization and modernization needs to be associated with the urbanization process and contribute to attracting investment in remote areas to gradually reduce the gap between economic regions and between mountainous and plain areas.

In summary, both theory and practice affirm that industrialization and modernization in international economic integration in developing countries is a difficult and complicated process with many issues that need to be solved and the state must be an important agent, often decisive to the success of industrialization and modernization. The state not only plays an orientation role but also intervenes directly or indirectly to create an environment with favorable conditions and has policies to mobilize and allocate resources for development investment. In specific circumstances, the state needs to proactively promote the industrialization and modernization process as an investor, planner and innovator. Effective intervention of the state in economic activities will significantly contribute to shortening the industrialization and modernization process.

Chapter 1 Summary

Chapter 1, the thesis has systematized and clarified the basic theoretical issues on industrialization and modernization, the role of industrialization and modernization and the objective necessity of industrialization and modernization for developing countries; analyzed the factors affecting industrialization and modernization in international economic integration, the goals of industrialization and modernization in international economic integration to see the necessity of the role of the state in industrialization and modernization in developing countries today. On the basis of generalizing the theories on the role of the state in economic development, the thesis has explained and clarified the role of the state in industrialization and modernization in international economic integration in developing countries, expressed in two main contents: the role of determining strategies and promulgating policies, especially policies to promote the driving force of the market economy; policies to adjust the structure of economic sectors associated with promoting comparative advantages, policies to mobilize resources of capital, technology, and human resources; export promotion policy; infrastructure construction and development policy to facilitate industrialization and modernization to achieve the set socio-economic goals.

Chapter 2

THE ROLE OF THE STATE IN INDUSTRIALIZATION AND MODERNIZATION IN INTERNATIONAL ECONOMIC INTEGRATION IN TAIWAN

(PERIOD 1961 – 2003) AND LESSONS LEARNED

2.1. OVERVIEW OF TAIWAN'S SOCIO-ECONOMIC SITUATION IN THE PERIOD 1949 - 1960

2.1.1. Natural conditions

Taiwan is located in Northeast Asia, southeast of China, with a total area of about 36,006 km2 including Taiwan Island and many other large and small islands such as Lan Island, Guishan Island, Diaoyu Island... and the Penghu Islands. Taiwan Island has an area of 35,879.3 km2 , accounting for 99% of the territory. The mountain ranges running from North to South have divided Taiwan Island into two plains, the West and the East. The arable land area accounts for about 29% of the total area, distributed in many areas: the Jianan Plain, the Pingtung Plain in the South and the Yilan Plain in the North. Taiwan's river system consists of nearly 50 rivers, but most of them are short and steep, with a high difference in elevation from sea level. This is a favorable condition for Taiwan to build hydroelectric projects.

Taiwan's territory is surrounded by sea. The natural conditions of one main island and many small islands of the Penghu and Diaoyu Islands have created favorable conditions for the construction of large seaports such as Keelung Port, Kaohsiung Port and Anping Port.

In terms of soil, Taiwan's mountainous areas are widely distributed, the hilly areas are mainly yellow and red soils, the coastal lowlands are mainly alluvial soils with relatively high fertility and acid sulfate soils. Agricultural land in Taiwan is relatively small, about 1.7 million hectares. The average cultivated land per capita in Taiwan is ranked as

the lowest in the region. The diverse natural conditions, climate, and soil have created favorable conditions for the development of many types of organisms and vegetation. Taiwan is poor in minerals. According to survey data, Taiwan has discovered about 200 types of minerals. However, important minerals such as coal, gas, and dolomite only have small reserves.

In terms of population, in 1952, Taiwan's population was 8,128 thousand people with a labor force of 3.063 million people. By 2003, Taiwan's population was 22.535 million people with a per capita national income of 13,157 USD. Of which, the labor force was about 10 million people [90, pp. 15-17]. The majority of the population living on Taiwan island is Han Chinese who migrated from the Mainland. Taiwan's aboriginal people have two ethnic groups, the Gaoshan and Pingpu, accounting for about 2% of the population. Due to the limited land and large population, Taiwan is one of the areas with the highest population density.

among the highest in the world. According to statistics, in 2003, the population density in Taiwan was 625.86 people/km 2 [90, p. 23]. The population distribution in Taiwan is uneven. Following economic development, people tend to migrate to live in the West, where there are fertile plains and large cities. Some areas with high population density such as Taipei city have a population density of up to 10 thousand people/km 2 , Kaohsiung city is over 9 thousand people/km 2 ... However, some other areas such as Hualien district, Taitung district have only about 70 people/km 2 [90, p. 23].

In general, Taiwan has many unfavorable natural, geographical and climatic conditions. However, with its island location, Taiwan can become a center of international economic activities, especially in the trend of globalization of the world economy.

2.1.2. Economic - political - social conditions

In 1895, the Qing court had to sign the Ma Guan Treaty, according to which China had to cede Taiwan, Penghu and other neighboring islands to Japan.

Japan then established the dictatorial Governor-General rule, all legislative, administrative and military powers were in the hands of one person and implemented the assimilation policy.

Economically, Japan implemented the policy of "Japanese industry, Taiwanese agriculture" with the aim of turning Taiwan into a region specializing in supplying rice and a place to consume Japanese industrial products. Regarding industry, Japan paid attention to light industry, agricultural processing industry, especially sugar production. In 1927, Taiwan had 45 sugar factories, accounting for 98% of total industrial products. In addition, Taiwan also had a number of industrial establishments in other fields such as rice mills, fiber processing, cement, fertilizer, paper, chemicals, etc. The transportation system including railways, roads, ports, etc. was also built to facilitate the circulation of goods such as the railway connecting the North and the South, the railway lines along the East, the road system connecting cities, districts and communes. The upgrading of Keelung port allows ships with a capacity of 100,000 tons to enter and exit. Kaohsiung Port was also built and upgraded.

In fact, Japan's colonial exploitation policy had a positive impact on promoting Taiwan's economy. However, during the period of 1937 - 1945, Taiwan's basic resources were mobilized by Japan to turn Taiwan into a defense industrial base to serve Japan's war purposes. Therefore, Taiwan's industry and agriculture suffered serious losses, and its productivity became increasingly low. The economy was always in a state of shortage of consumer goods while labor was surplus. When World War II ended, Taiwan was liberated from Japanese rule, but new conflicts between the Taiwanese people and the government and army from the mainland arose and became fierce. People rebelled against the government and were quickly suppressed. Taiwan's economy fell into a state of collapse and chaos. The rapid population growth while agricultural production declined led to a shortage of

There was a serious shortage of food. Agricultural production in 1948 was only 59% of that in 1941, not enough to supply the islanders. Consumer goods became increasingly scarce and prices skyrocketed.

In 1949, when the People's Republic of China was founded, economic relations between Taiwan and the mainland were completely severed. Taiwan followed the capitalist path. In terms of foreign relations, in the 1950s and 1960s, Taiwan received relatively broad political support from the United States and other capitalist countries. Many countries recognized the Kuomintang regime and established diplomatic relations with Taiwan. Taiwan was also an official member of the United Nations, but by the 1970s, Taiwan had lost its footing in the United Nations, which also caused many difficulties in Taiwan's international relations. The People's Republic of China declared Taiwan a part of China, and many countries severed diplomatic relations with Taiwan. However, Taiwan implemented a "pragmatic diplomacy" to gain support from other countries through economic, trade, and cultural activities.

In international relations, Taiwan is in a very special geopolitical position, where two social systems were confronted during the Cold War. Therefore, Taiwan received large amounts of aid and investment from the US, Japan and Western European countries. At the same time, among the massive migration from the Mainland, there were capitalists with capital, technical expertise and management experience, which was also a favorable condition for Taiwan's economic development.

After separating from the mainland (1949), Taiwan's backward economy suffered the severe consequences of war, its economic structure was unbalanced, and inflation reached 1189% in 1949 [63, p. 36]. People's lives were very difficult. Employment pressure also increased due to the consequences of the wave of immigration to Taiwan. That situation forced Taiwan to quickly carry out economic recovery (1949-1952) with the basic content of limiting and preventing economic chaos, controlling inflation, and stabilizing society.

To control inflation, Taiwan implemented specific solutions such as reforming the monetary system through the issuance of new currency, selling gold to build people's confidence in the new currency, increasing credit interest rates to 7%/month, etc. Thanks to that, the inflation rate in 1950 decreased to 84%, and in 1951 to 53% [63, p. 37]. In agriculture and rural areas, Taiwan issued a land reform policy starting in 1949. The change in land ownership contributed to fundamentally resolving the conflict between landlords and farmers, liberating production capacity in agriculture and rural areas. In industry, the state sold 461 small and medium-sized enterprises taken over by foreign capital to the private sector [66, p. 101]. Thanks to the application of a series of positive measures, by the end of 1952, Taiwan's economy had recovered and reached its pre-war peak. The economic situation had basically stabilized, creating conditions for Taiwan to enter industrialization.

2.1.3. Overview of the implementation of the import substitution industrialization strategy (1953 - 1960 period)

In the early stages of industrialization, with the starting point being an economy that was still based on backward agriculture, small industry, and most industrial consumer goods still had to be imported, the Taiwanese government chose the import substitution industrialization strategy. The basic content of this strategy was to take advantage of available domestic resources, especially the abundant labor force, to build a number of industries that produce imported products to meet the diverse needs of production and consumption, create more jobs, and contribute to socio-economic stability.

Since 1953, Taiwan has proposed four-year economic development plans: 1953-1956, 1957-1960 and 1961-1964. The basic content of these plans is to stabilize commodity prices, gradually reduce inflation, reform foreign exchange management to stabilize the economy, improve people's lives... The Taiwanese government has implemented the following policies and solutions: