Taichung County, Tainan County, Kaohsiung County names now relegated to the dustbin of history. What will happen in the new jurisdictions-special municipalities-that have absorbed these counties? The photo shows the Gaomei Wetlands, now part of the special municipality of Taichung City. (photo by Jimmy Lin)

It has been the single greatest metamorphosis in local government in the history of the Republic of China.

Before this Taiwan had been divided into two special municipalities-Taipei City and Kaohsiung City-directly under the central government, plus 25 other counties and cities in Taiwan Province. But hereafter, nearly 60% of the island's population will reside in five municipalities occupying 27% of the land area. Besides eliminating old boundaries that were an obstacle to growth and planning, the change will also provide impetus to the competitiveness of the country as a whole.

But there are also major challenges. Internally, the municipalities will have to deal with fiscal deficits in the tens of billions of NT dollars, contention over resources between formerly separate urban and rural areas, and reformulation of policies for everything from transportation and construction to local industries, land use, and environmental safety.

Another source of concern is this: Do the five municipalities, now given more autonomy, have the necessary human resources and capabilities to deal with what will be a rapidly expanding task set while finding their niches in the international economy?

How do the Big Five stack up? Taipei City (a special municipality since 1967) has not been altered in size, powers, or share of resources. The former Taipei County, though remaining the same size, has acquired new powers and resources, as well as a new name: New Taipei City. Taichung City and Tainan City bear familiar names, but in fact are new administrative entities covering, respectively, Greater Tai-chung (the old Taichung City and Tai-chung County) and Greater Tainan (the old Tainan City and Tainan County), with the enhanced status and powers of special municipalities. Finally, Kao-hsiung City has incorporated what was formerly Kaohsiung County within its boundaries, but has acquired less in the way of new powers, since it has been a special municipality since 1979.

The establishment of the five municipalities will necessarily bring changes to land-use policy and to competitiveness. Local and central government officials are all hoping that the erasure of administrative boundaries can generate intra-regional cooperation that will make cities more self-reliant and create diversified regional cores that have unified governance and stronger overall comparative advantage.

Inevitably, some growing pains will follow the birth of these new jurisdictions. But hopefully the new arrangements will enable the five municipalities to find new economic synergies and niches.