1. Introduction
1.1. Background of the study
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CHAPTER 1 INTRODUCTION
1.1. Background of the Study
In agricultural economies, land is the most important resource. With access to fertile land, people in the rural areas can feed themselves and their families. However, the United Nations Food and Agriculture Organization (FAO, 2004) reports that landless household in rural areas represents about 80 percent of the people who are chronically hungry in the world today. In this regard, a powerful strategy for promoting economic development, and the reduction of poverty and inequality, has been the implementation of land reform. After the end of WWII in 1945, land reform was implemented by several governments around the world. They attempted to make radical changes in their territories, transferring agricultural land from powerful landlords to those who worked the land. At the same time, other states considered land reform as part of their first step in economic development and industrialization (Tai, 1974).
Among the East Asian countries, redistributive land reform has often been considered a substantial stimulus in the subsequent economic growth for Taiwan, Japan, and South Korea. Before the reforms, there were a small number of large landlords and many small tenant cultivators. After the reforms, tenancy effectively disappeared, having an impact on structural change and income per capita. Consequently, reforms were responsible for at least half of the actual reallocation of labor out of agriculture in each of these countries (Talan, 2018). Regarding the development of agrarian structures, in South Korea and Taiwan, Japanese colonialism severely weakened the traditional
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ruling class and landowning aristocracy, taking away their political power, and this led, as in the Korean case, to be identified as collaborators of the Japanese. The coup de grace came with the agrarian reform after the Second World War. In Taiwan, the Kuomintang, a right-wing nationalist party, was able to introduce land reform because they did not own land on the island, while in Korea the need for political stability led to land reform, under the patronage of the Government of the United States. The result was that in East Asia there was a more equitable distribution of the land (Maya, 2016).
However, in Latin America, the agrarian condition demonstrated that landholding patterns cause social injustice and economic stagnation. In the majority of the Latin American countries the land distributions were so unequal that did not have an impact on income redistribution and employment creation. In this situation, over one hundred million rural people living in poverty coexist with a minority that concentrated the abundance of wealth. So, in the end, this inequality causes land tenure to be the main obstacle to the development of Latin America (King, 1977). One of the basic objectives of land reform in Latin America has been to increase agricultural production. However, in several cases, the immediate result of redistributing the land has been a reduction of outputs. The new peasant owners did not have the technical competence to maintain former production levels. The Bolivian peasants are not the only ones who tended to ignore all but his own personal needs. And in Mexico, too, the ejiditarios were delayed in terms of productivity, partly because they lack technical know-how, and partly because the small size of many of the individual plots makes them inefficient (Robert, 1962). Moreover, in the case of Peru, new landowners had to compete in the market under unfavorable terms, and with insufficient economic support from the government.
This situation left them in the same conditions as before, or, in some cases, even worse off.
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In the present thesis, I will compare the result of land reform in one country from East Asia and another one from Latin America, in this case, Taiwan and Peru respectively.
The decision to study Taiwan and Peru is because both economies actually share common characteristics that could be useful to have a better understanding of the different results for each case.
First of all, land reform in Taiwan and Peru was run under a one-party system. In democratic states with multi-party systems, such as Puerto Rico, Venezuela and Chile, political parties openly competed for electoral support by compromising land reform.
However, when a political party wanted to promulgate land reform, it had to follow the open debate and many compromises with other political parties. Meanwhile, in the case of more authoritarian political systems, open party competition for popular support was severely restricted. However, even if the opposition parties were banned, the leftist parties were still clandestinely organized. This generally increased the pressures on the regime to support some type of land reform. The competing officers were often looking for populist support, which sometimes led them to undertake radical land reforms. This was the case in Peru with Velasco Alvarado regime in 1969 and the Taiwanese reform with the Chinese nationalist government in the 1950’s (Barraclough, 1999).
Second of all, both Taiwan and Peru experienced the same level of development during the period of analysis, being both agricultural economies. Before land reform, the economy of Taiwan was predominantly agricultural. The people employed in the agricultural sector represented 61% of the population and agriculture contributed about 36% to the domestic product. In this sense, the agriculture was a land-based economy, where the land problem was the basic problem in agriculture (Chang, 1974). In the case of Peru, agriculture has always been an important sector that sustains millions of
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families in the rural areas of Peru. During the 1950’s, the agrarian sector represented 24% of the national domestic product and the labor force in agriculture represented 59% of the population (Pintado, 2016). So, as we can see, before the land reform, both Taiwan and Peru were in almost the same conditions in terms of economic structure, predominantly agricultural.
Therefore, the fact that both Taiwan and Peru were controlled by a one-party system and that both were predominantly agricultural economies during the land reform implementation, give us a justification to evaluate the performance of land reform in both cases and to make a comparison in order to find the factors that explain why land reform worked in Taiwan but not in Peru.