Over time , I have decided that that many Taiwanese have a tendency toward pessimism – or at least an aversion to optimism – about change and “making their own luck”. For right now specifically, this pessimism is about the economic future of Taiwan, and what the prospects are for the younger generation. So how did we get to this gloomy situation? It is quite likely that normal fears at ever-changing challenges have been reinforced by historical experience.

The morale of those living in post-war Taiwan was grim. In 1950, the Nationalists lost the Chinese Civil War, although they clung to the forlorn hope that they would someday “Retake the Mainland!” The best they could do though was to hang on to Taiwan, Penghu, Kinmen and Matsu. Even that was touch and go: the specter of a major war with Mao’s People’s Republic of China (PRC) loomed large throughout the 1950’s, as the PRC gobbled up some ROC-held islands off the mainland coast, and engaged in artillery battles with Republic of China (ROC) forces in the Kinmen and Matsu islands.

Military tension legitimized martial law, and the Taiwan Garrison Command had the power to detain, torture and execute almost anyone they wanted to, whether an alleged communist agent or Taiwan independence activist. To boot, Taiwan’s economy was in recession. For the average Taiwanese, life was tough.

But things got better. From 1959, there was a cease-fire, the beginning of today’s status quo. Moreover, the economy stabilized, and started to improve. And improve. And improve! And then a miracle happened: the Taiwan Economic Miracle. From cane rat to Asian tiger in just 20 years!

Taiwan’s economy had long been agricultural, sugar being the main export. But to help with the war, Japan had started industrialization. Under the KMT, this continued, first as import substitution, then as manufacturing for product export. Expansion was facilitated by infrastructure development, such as government-built ports, highways, railways etc. The 1970’s and 80’s also saw the beginnings of offshoring for the burgeoning US electronics industry, for which Taiwan was an early partner. Investment capital and expert advice were not in short supply; nor were native work ethic or business savvy.

The results rocked: In 1960, Taiwan’s per capita GDP was the same as Swaziland’s. By 1980, it almost equaled that of Portugal.

Per Wikipedia: “Between 1952 and 1982, economic growth was on average 8.7%, and between 1983 and 1986 at 6.9%. The gross national product grew by 360% between 1965 and 1986. The percentage of global exports was over 2% in 1986 … industrial production output grew a further 680% between 1965 and 1986.”

Healthcare and education improved, and a new middle class emerged, the grandparents and parents of today’s students and young working people.

With wealth came a stronger military. But the security situation was in constant flux. The United Nations recognized the PRC as “China” in 1971, triggering Chiang Kai-shek to quit the UN. The US broke off formal diplomatic relations with the ROC in 1979, and most American soldiers left. However, the US Congress also passed the Taiwan Relations Act, promising welcome (if vaguely worded) military support.

Although martial law was relaxed somewhat after CKS’ death in 1975, police busted up a pro-democracy march in Kaohsiung in 1979. The following year saw a series of arrests and murders of underground activists, and many others fled police, often with the help of the Presbyterian Church.

In 1987, President Chiang Ching-kuo – CKS’ son – ended martial law and further democratized the country. The pro-independence Democratic Progressive Party, founded in 1986, became legal and gained greater influence. In 1988, native son Lee Tung-hui became the KMT president of Taiwan, pivoting the government toward independence and localization.

This situation was far from ideal for the old-guard Nationalists, who longed for (re)unification with China. Also, the country as a whole faced some challenges. Economic growth was slowing and rival China was increasing in power, both as a business competitor and as a military threat. But overall things weren’t too bad! Taiwan had a free democracy; the children of the Taiwan Miracle workers enjoyed a standard of living far exceeding their predecessors. And America was there in case of trouble with China.

So, as opposed to Taiwan’s history leading inevitably to pessimism, these years provided a significant basis for optimism. Does this then unravel my thesis? Not so fast, dear reader! Our despair wouldn’t be properly gloomy if we didn’t first crush false hope!

Since the 90s, China has been expanding like a huge and dangerous red star just a few hundred kilometers away from Taiwan, the power of its gravity pulling on the entire world. Financially, militarily, and diplomatically far outmatched, the Taiwanese must feel sometimes like the heirs of Koxinga, waiting for China to come in force to capture – one way or another – their Kingdom of Taiwan.

Democracy – always more attractive in the abstract – has proven somewhat farcical to many Taiwanese, what with former president Chen Shui-bian being jailed for corruption, badly failed economic promises by the last president Ma Ying-jeou, and legislators regularly performing stunts or throwing chairs at each other – when they aren’t being overrun by student activists!

In the economy, wages have stagnated for almost 15 years, causing a brain drain of the best and brightest to China, America and Europe. Plans to be a “center of value-added innovation for the global ICT supply chain” or “the new southbound policy” sound suspiciously like old wine in new bottles.

Hence, it’s no surprise that the Taiwanese can seem a bit resigned and gloomy about the future sometimes. It’s hard to feel that your glass is half full when the level is falling and the bartender is always busy with other customers!

On the bright side though, many observers feel there is still a path back to tiger-hood for Taiwan, if it has the guts to embrace it. They say Taiwan needs to shake off the ghosts of the past and become truly innovative – in effect, to pour a really new wine into the glass. I hope so. And on that note, dear reader, I’m off to the pub myself!

Keep it coming!