Asia Times: China


	May 21, 2002	atimes.com

China

Taiwan: A job still half done
By Laurence Eyton

TAIPEI - Taiwan's President Chen Shui-bian celebrated two years in office on Monday in a modest way. He has, his critics say, a lot to be modest about. Certainly, Taiwan's first-ever democratic change of government has not been a stellar advertisement for democracy, in fact it has been almost a textbook case of how a muddled constitution can produce weak and ineffectual government. Halfway through his term, however, it now seems that Chen finally has both the cabinet talent and the parliamentary power that have eluded him for so long. But empty coffers and China's intransigence might still deprive him of the policy successes he craves.

Unexpected victory
The first drawback that Chen and his incoming Democratic Progressive Party (DPP) faced was that they never expected to win the election in the first place. That they did so was entirely due to the anti-DPP vote being split between Lien Chan, the candidate for the then ruling Kuomintang (KMT) and independent candidate James Soong, thrown out of the KMT for refusing to accept the party's decision that Lien, rather than he, should be its candidate. The Lien-Soong competition allowed the DPP to win the presidency with just 39 percent of the vote. It was much less than a mandate and its repercussions have dogged Chen's government to this day.

The DPP had in fact expected the KMT to win again, allowing it four years of sniping at the inevitably poor performance of Lien as president, before coming to power on a wave of rejection of the KMT and all its works in 2004. In 2000, the DPP had little that could be called coherent policy, few senior members with even local administrative experience and absolutely no idea how a transition of power was supposed to take place. Nor was the KMT, out of office for the first time in more than half a century, inclined to help.

Unsurprisingly, Chen's government did not get off to a flying start. Added to his burdens were deep distrust in Washington of both him and his party, with their past history of support for Taiwan independence, with the result that several key choices for Chen's first cabinet were at Washington's behest, considered safe hands for key posts, but figures with better connections to the outgoing KMT than to Chen and the DPP. Few of these choices were happy ones.

The Clinton administration was not the only one with reservations about Chen's stand on the thorny independence/unification issue. The military, still highly politicized and very much an adjunct of the KMT, was deeply conflicted about whether it could swear allegiance to a president who supported Taiwan independence, and a similar reluctance to work with the incoming government was also felt by many in the civil service, still a bastion of reunificationist conservatism.

Perhaps the greatest problem that Chen faced, however, was the inability of the opposition parties to accept that through their own division and stupidity they had given up their own power to Chen. The KMT, and the party formed by Soong from KMT defectors, immediately after his election defeat, the People First Party (PFP), controlled over two-thirds of the seats in the legislature. Since they had won nearly 60 percent of the vote in the election, they argued that they had in fact more of a mandate to form a government than Chen did and demanded that the president let them form the new cabinet, although they had no constitutional ground for this demand. Chen was unwilling to let them do so, at the cost of their doing everything possible to block the government's legislative agenda from that point on.

That is not to say that Chen did not try to work with the opposition. On coming into office he made it clear that he was quite prepared to work with talent for the opposition parties in what he called "a government for all the people", but the KMT was opposed to any of it members working with him. Those who did, such as Chen's first premier Tang Fei, needed special permission from their party and were placed under a harsh party spotlight to make sure that they were acting in accord with KMT policy.

Nuclear meltdown
Inevitably, such a situation foundered as soon as the new government tried to implement a policy the KMT opposed. The debacle was the Fourth Nuclear Power Plant, a US$5 billion boondoggle from which KMT cronies hoped to do very well. The anti-nuclear DPP wanted to cancel construction of the plant. The way in which it was done was a prime example of the ineptness of the new government.

Taiwanese were fairly evenly split between a vociferous anti-nuclear plant faction and a larger group of "nimbies", that is, those who didn't want the plant built near them but understood that Taiwan, short of electricity generating power as it is, perhaps needed the plant. Genuine pro-nuclear supporters, outside the KMT's circle of business cronies, were thin on the ground. The smart strategy would have been grass-roots campaigning organized by the DPP to win over the nimbies, then the government's cancellation of the plant as "in response to public concern".

Such a simple strategy was beyond the new government. Instead the plant was canceled on the premier's say-so without the prior creation of any extra-parliamentary political support or even parliamentary discussion. The KMT then used its very considerable advantage in the media to persuade the nimbies that cancellation was a bad thing for the economy, which had begun to sag alarmingly, while using its parliamentary power to force the government to cancel the cancellation.

The fight over the power plant wasted the entire first year of Chen's administration, as well as destroying the premiership of Tang Fei and emasculating that of his successor, Chang Chun-hsiung. It also showed that the opposition's control of the legislature was such that the DPP simply could not pass pet legislation that was either inimical to KMT interests or such a good idea that the KMT wanted to pass the legislation itself after it had regained power.

Examples of the first include a refusal to pass measures that would have made vote-buying, the KMT's traditional election ploy, more difficult. An example of the latter would be the opposition's refusal to provide a budget for an old age pension plan because it wanted to reap the thanks of this particular voting block itself.

Perhaps the only significant achievement of the first year in office was a negative one, in that despite Chen's pro-independence views - which he had downplayed both in his election campaign and after taking office - relations with China didn't worsen. It is true that substantive talks did not restart as Beijing chose to "boycott" Chen's government until it admitted the "One China" principle - though because of Beijing's own multiple interpretations of this doctrine, nobody in Taiwan is too sure what this is - something that Chen was unwilling to do.

But if a frozen standoff can be regarded as an improvement on threats of active conflict, Chen actually stabilized cross-Strait relations after the disquiet over of his predecessor Lee Teng-hui's assertion in 1999 that they were "state-to-state" in character.

Second-year improvement
It was only after his first anniversary that Chen began to show some of the political acumen he had displayed in the 1990s as the first-ever DPP mayor of Taipei. He decided to concentrate on the economy, largely because the ever-plunging GNP prospects for 2001 and rising unemployment were the news stories of the day, and also because this was an area where the KMT was vulnerable to public pressure.

Chen's strategy was to convene a conference to sort out the economy, which the opposition could not boycott without being blamed for prolonging the recession, but in which its voice was so diluted by business representatives and academics as well as government and DPP party members that its strategy of obstructionism had to be abandoned - at least as far as the economy went.

The National Economic Development Advisory Conference (EDAC) last August was the first time Chen had shown that he had both understood his position of weakness and also how, within that position, to still get what he wanted. Whatever the EDAC's usefulness in economic policy meant - and there is no doubt that it gave impetus to a number of measures, especially related to clearing up Taiwan's banking mess - it was a popular success for Chen in showing that he was not as high-handed nor as doctrinaire as was popularly thought and that he was willing to ditch DPP shibboleths when the wider consensus advised him to do so. Chen came out of EDAC looking like a man who could be worked with, and those who appeared not to want to work with him for the common good - the KMT leadership in particular - looked diminished.

EDAC provided a raft of useful legislation the opposition was committed to passing, and to some extent solved the gridlock problem in the legislature. More than that, it probably saved Chen's presidency. For earlier in the year, as the power plant debacle reached its nadir, it was all but impossible to imagine that the DPP could gain control of the legislature. Bbut by December, the turnaround in the DPP's fortunes had been amazing. In legislative elections the party saw its seats increase by 30 percent from 67 to 87, while a smaller recently founded ally took another 13 seats. While the PFP was also a big winner, the KMT saw its legislative muscle drop from 110 seats - out of total of 225 - to a mere 68.

When the dust settled, and after some musical chairs on the fringes, the DPP and its ally the Taiwan Solidarity Union, known as the "green camp" from the color associated with Taiwan independence, could muster 101 seats, while the KMT and PFP - the "blue camp" - could muster 113, the balance being held by independents. While this means the blue camp retains a majority, in effect it is too small to be relied upon and vastly improves the government's chances in passing its legislative agenda.

Success in the election was followed by a major cabinet reshuffle in which close Chen allies were elevated to more high-profile positions - the obvious example being Yu Shyi-kun, a presidential office strategist who was elevated to the premiership. On top of this, Chen is also to assume the chairmanship of his party.

Short of time, short of money
It has taken this long for Chen to emerge from the policy and organization vacuum, not to mention inherent political weakness, surrounding his unexpected election victory to produce a cabinet with a high level of professionalism and great public credibility. Chen himself has shown in recent months the affable urbanity of a man who is extremely confident and very much in control.

Certainly the strong pro-Taiwan stance of the Bush administration and the recovering economy - set to resume growth this year after its first contraction on record in 2001 - are contributing factors to this, as well as his having his dream cabinet team. To some degree, there is a feeling that now Chen can embark on showing Taiwan what a DPP presidency is like. But how Chen intends to reconcile the DPP's enthusiasm for social welfare spending with the severe budget constraints it faces remains a mystery.

Chen has, in the past year, done a remarkable job of pulling his government back from the brink in the wake of the power plant fiasco. He has also, by making some clever appointments, won over the military. Some areas of the civil service are still uncooperative and the intelligence services - KMT reunificationists to a man - have, however. almost collapsed.

But Chen's most pressing problem now is the budget shortfall; ie, where can he find the money to do what he wants to do? At 3.4 percent of GDP, the deficit is not critically high, the problem is that the government's ability to borrow is capped at 15 percent of its total budget. Currently this is exhausted by trying to make up a shortfall between what it needed for the current fiscally conservative year and what a hostile legislature allowed it. There simply isn't the money available this year for expanded spending. Yet waiting until next year will not give Chen the necessary time to implement projects before the next election in March 2004.

The obvious thing is to replenish government coffers with a tax raise, but raising taxes was something that Chen pledged not to do. Raising the purchase tax from 6 to 7 percent is being discussed, but it will not be popular and cannot be assured of legislative support, even from the DPP.

Other than that, the most popular measure that Chen could implement is to lift the ban on direct links with China. But this is hard to do without cooperation from across the Strait, and that is as elusive as ever. While Chen can smile as the once mighty KMT totters on the lunatic fringe of Taiwan politics, he is very far from guaranteed re-election yet.

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