ASIAN AFFAIRS ON TAIWAN

Chang Chun-Hsiung - Premier of Taiwan

IS TAIWAN OUT OF THE DOLDRUMS?

The current interview took place before the elections of Saturday 1 December 2001.

At the head of a minority government, facing a hostile legislative chamber, Chang Chun-Hsiung could not implement any policy of his own. His agenda was simple: just hold on long enough, because the KMT that controlled 123 seats in the legislative Yuan could not and would not repeat the same performance in December 2001.

Whatever the outcome of the election, the DPP would fare and look better because it would mathematically increase its share in the chamber while the KMT would see its numbers diminished. This was an evidence. On the right of the KMT, Lee Teng-hui was going to poach a dozen legislators - he did it which in a way let you wonder if the voters vote for ideas or for the rich and the famous. On the left of the KMT, the People's First Party, James Soong party, was also going to lure a fair number of disillusioned KMT people. Fortunately for the DPP, the financial resources of the PFP did not allow James Soong to line-up PFP candidates in all the thirty constituencies. As for the DPP, given its position as the "ruling party", it had the financial muscle that it lacked in the past.

Chang Chun-Hsiung was therefore a confident man. We met a man that, like other members of the government, did not consider himself responsible for the dismal economic performance of Taiwan. The economic slowdown in the United State, now officially a recession, was a good scapegoat. Then, the September 11 2001, turned the table for good. In bad time, or supposedly bad time, people tend to line up behind their government, no matter what. The shameful U-turn of August 2001 on the China policy was all but forgotten when the people went to the ballot box.

Serge Berthier (SB).- One member of your own government describes the current political atmosphere as 'chaotic". As the Prime Minister of a minority government, facing election in a few months time, how would you describe your working environment?

Chang Chun-Hsiung (CCH).- First, I would like to point out that Taiwan used to have the longest period of martial law, with 40 years without any election. If we use a broader vision to look at the situation in Taiwan right now, we can see how much progress we have made in the evolution of democracy in Taiwan. Twenty years ago in Taiwan, when we were still under martial law, the people wished that they could set up political parties. At that time if you tried to hold such opinions, you might have been sentenced to death in military court (1). Eight people among the current political establishment of Taiwan were tried in military courts. Among them were the current Vice-President, Mrs Lü Xiu-lian, and the present Chairman of DPP, Franck Hxie. During their trial, there were fifteen lawyers, among them President Chen Shui-bian, the mayor of Kao-shiung, Franck Xie (Xie Changting) and I (2).

In these twenty years, Taiwan performed a lot of reforms, including the relaxation of rules for political parties, the removal of martial law, the tenure of the first popular election. These reforms were achieved in a confrontational way and with pain.

There had been four steps in that process: the legislature used to be dominated by the dominant party, the power was concentrated on the presidency, and the KMT was the ruling and dominant political party. Then, on March 18, 2000, people used their vote to turn the situation. We are now entering a new era.

SB.- Indeed, but what you refer to is the election of the President in a three-way race. The winner got 4 977 737 votes, the loser 4 664 922 votes and and additional 2 925 513 votes going to the KMT candidate that opposed the DPP. So it was far from being a landslide and a second round of voting would have most likely reversed the result of the election. Today there is a sense of political crisis and paralysis.

CCH.- It took time among the population to accept the new situation. The KMT had lost its power and the DPP was in charge. I’m the first DPP member to become Premier of Taiwan. Since we have less than one third of the seats in the legislature, people do not accept it easily. Whether the military and the public servants could adjust to this new situation was a worry. We are in a transitional period, from one system to another, and it can't be done without pain. Like every democratic building process, it cannot be achieved overnight and easily.

SB.- Yet, it is not very democratic to be the Prime Minister when the DPP controls so few seats in the legislative chamber.

CCH.- Actually, this can also be seen in other countries in the world, where the governing party does not have the majority in the parliament. How do they deal with that? In some countries, the parties constitute a coalition government. In Taiwan, since political parties don’t have any experience of cooperation between them, and in addition do not trust each other, a period of doubt is bound to ensue. That is where we are.

SB.- What are your priorities?

CCH.- When I was appointed Premier, I immediately raised two ideas: first, to see cooperation among the political parties and not confrontation any more. It does not prevent competition but it should not become an internal war between factions that would lead to political instability. Until now, I could say that the military, the intelligence sector and the public servants have all adjusted to the transfer of power from the KMT to the DPP and are cooperating. This in itself is a very important achievement.

SB.- What about the China factor? How do you look at the relationship with the Mainland?

CCH.- It was my second preoccupation. Some people may say that if the DPP was in charge of the cross-strait relationship, it would mean a war of tensions with China. However, I want to point out that even though we have not been able to make a major breakthrough on that issue, at least we have succeeded in stabilising the situation.

SB.- The dialogue with China is nonexistent and the economy is in shambles. What do you consider to be an achievement since you took up your position?

CCH.- Taiwan is now facing an economic crisis. Last year, the US NASDAQ declined dramatically and the world economy decreased discernibly, having a further impact on Taiwan’s SME’s. Information and electronic exports were adversely affected, and such traditional manufacturing sectors as machinery, metals, textiles, paper making, and light industries experienced a decline in sales. So now, we plan to invest in public infrastructure to boost the economy and jobs. Besides, we will foster some specific industries to maintain Taiwan's economic edge intact for the coming 3-5 years, as we used to do in the past when we first developed semiconductors and high-tech industries. Although Taiwan’s economy cannot avoid the effect of the world economy, we still want to pursue and maintain a 4 % economic growth, and that is where we now put all of our efforts. In the political arena, politicians, the Taiwanese people and society as a whole agreed on the principle for broader and more intensive cooperation between political parties, since it is likely that no single party can win the majority in the legislature. Nevertheless we still hope that we will see a majority emerging in the legislature coming out of the next elections that could bring about long term domestic stability for Taiwan (3).

SB.- The election is not yet there. In the meantime, the economic situation continues to deteriorate.

CCH.- The Government has adopted a number of measures. It has allocated a NT$ 450 billion loan fund to reinvigorate traditional industries, and another NT$ 5 billion has been set aside to expand the Small and Medium Business Credit Guarantee Fund and assist SMEs to acquire bank loans. I am confident that the government’s administrative measures will produce results, and that our economy will recover in the next six to twelve months.

(Note: The comment was made before the August 26th proposals to increase economic exchanges with China)

SB.- You admit that the DPP hold on power is tenuous. Yet, you keep calling the DPP the ruling party while it is unable to pass a single law in the Legislative Yuan and could not get the opposition to approve the supplementary budget needed for your economic program.

CCH.- We say that the DPP is the ruling party in Taiwan not because we have the majority in the Congress – and we have not -, but rather because both the Presidency and the President of the Executive Yuan, the Prime Minister, are from the DPP.

SB.- The President was elected with a small lead and about a third of the vote but you have not, and did not get a vote of confidence in the Legislature. How can you say the DPP represents the voice of the people?

CCH.- Before, in our constitution (4), the President was appointing a Prime Minister and the nominee had to get the approval of two thirds of the Congress to be appointed. An amendment to the constitution has changed the process. Now, when the President is naming the Premier, he or she does not need be confirmed by the legislature. However the deputies have kept the power to table a vote of non-confidence towards the Cabinet, but they didn't do so in the past year or so.

SB.- Why, since a majority rejects most of the Executive Yuan's proposals?

CCH.- That’s because the people’s will has constrained the deputies to do so. In a recent public opinion poll, only ten per cent of people believe that the instability of Taiwan has its cause in the new political setting. That’s not enough to allow the majority in the legislature to get rid of the Cabinet. There is not enough public support to justify such a move and the deputies would not benefit from such an action.

SB.- It is very unlikely that the DPP on its own could garner more than a third of the vote at the coming election. It needs a partner to win the election. What party would be prepared to work on a common platform with the DPP?

CCH.- As to who will be our partners for the coming election and after, I think there is still too much uncertainty surrounding this election that does not allow us to make a definite choice. However, President Chen has pointed out that cooperation will be found with parties that will support the government’s ongoing reforms and share the same ideals with the DPP.

(Note: shortly after the interview, it was officially announced the formation of a new party by Lee Teng-hui's supporters: the Taiwan Solidarity Union (TSU). The TSU announced that thirteen KMT legislators would cooperate with the DPP. The target was to strip the KMT of its claim of being the first party of the island since with 13 legislators defecting to a new party, the KMT was then unable to secure more seats in the DPP in the Legislative Yuan. It must be noted that the thirteen candidates of the TSU won their seats, a 100% result which provides further evidence that in Taiwan, as in Japan, some seats are secured for life regardless of what the candidate stands for. See the interview with Zhang Xianyao on the game of numbers).

SB.- There are many issues where your party is at odds with the other political parties, on issues such as the nuclear option, the Cross-Strait relationship and the domestic economy. Are you prepared to compromise?

CCH.- First, I would like to point out that the DPP is striving to become the majority party in the legislature after the elections. Secondly, some people do believe that the DPP is a pro-independence party. But, President Chen has made himself very clear last year in his inauguration speech on that point. We have to face several issues such as the nuclear one, the cross-strait relations and the domestic economic situation. For all of these, we have to maximise our common understanding and minimise our differences, and that could be done if we share the same vision and ideals for Taiwan's stability and prosperity. The issue of the fourth nuclear plant is a good illustration of how pragmatic the DPP is (5). We originally stood against nuclear power. But we handled the case of the fourth nuclear power plant according to our constitutional system to work a solution out. In terms of future cooperation with other political parties, we wish that we can find a common ground to conduct reforms together, in the same objective and direction for a better implementation of policies.

SB.- Some would say that the nuclear issue was badly handled and President Chen had no choice but to back down. At the time, the idea of a referendum on the issue was floated. As the energy issue is a matter of national security, it was not necessarily a bad idea. But today, the referendum is no longer mentioned. Why?

CCH.- When there is controversy in public policies, we will use people’s vote to decide the issue. To that effect, the Executive Yuan has already submitted a referendum law in the legislature, but the Legislative Yuan has not completed the passage of the law (6).

(Note: since then, the Prime Minister has officially said that the referendum will not take place in 2001).

SB.- Among the comments we had about Taiwan, coming from a close friend of Taiwan, if an American Congressman was to witness the so-called democratic election of the island, he would be shocked and unlikely to support a system where corruption is endemic. Is Taiwan cleaning up its methods?

CCH.- Over the years, Taiwan’s political and economic development has been threatened by "black-gold" politics. People have long felt frustrated and indignant about the unfairness existing in the society: a privileged few were monopolising the power and the wealth, close connections between officials and businessmen, and profiteering behind closed doors was the norm. The Ministry of Justice has been actively investigating the “black-gold” cases by implementing the “action plan for eliminating black-gold politics”. A total of 3,917 cases have been investigated from June 1, 2000 to May 20, 2001 (7).

SB.- Our last question is about the WTO. What will be the consequences of the admission of Taiwan to the international organisation?

CCH.- Since the ROC is committed to joining the WTO, the government will have limited latitude to manipulate tariff and non-tariff restrictions in the future. Therefore, opening the market will have a tremendous impact on domestic operations, processing, and exports. Considering the subcontracting and cooperative relationship between Taiwan’s large enterprises and small-and-medium-sized enterprises (SMEs), the latter are expected to suffer from the impact. In addition, WTO rules on self-manufacturing rates, distribution, opening of the service sector, termination of subsidies for price differences, abolition of investment incentives, and equal treatment for foreign and domestic workers will greatly affect the competitiveness and operation of domestic enterprises and may even bring about a readjustment of the industrial structure.

SB.- So it is not going to be an innocuous process. Is the political system mature enough to handle the stress that the domestic economy will inevitably feel, while the Legislative Chamber is likely to be fragmented and volatile?

CCH.- In his speech at the DPP’s provisional plenary session on May, 6, 2001, President Chen Shui-bian expressed his views about political development for the first time since he was elected. He said “If the DPP becomes the largest party in the Legislative Yuan after the year-end elections, it will unite with opposition parties, which have the same ideals and support reforms. The DPP will then form a new, stabilising majority in the Legislative Yuan, and the alliance created will support the administration during the next two-and-a-half years”. The President made these remarks, because he realised that none of the three major parties will hold a majority in the Legislative Yuan after the elections; therefore, pragmatic adjustments must be made. So we will see.

Summer 2001

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Notes:

1.- Taiwan was named Ihla Formosa, or “beautiful island,” by Portuguese explorers. In 1895, the Qing Dynasty ceded Taiwan to Japan “in perpetuity” under the treaty of Shimonoseki that ended the first Sino-Japanese War. Japan at first treated the territory as a sub-tropical colony to serve the interests of the mother country and, when militarists took over in the 1930s, as a base for its “East Asia Co-prosperity Sphere.” Literature during the time refers to the island’s inhabitants as “local islanders” as opposed to the colonisers. Taiwanese were forced to adopt Japanese names, wear Japanese-style clothing, eat Japanese food and observe Japanese religious rites. People old enough to have lived under colonial rule can still speak Japanese. While appreciating the social and economic benefits, many native residents did not like the Japanese, attributing the discomfiture to their status of being second-class citizens. During World War II the Allies agreed that at the war’s end Taiwan should be returned to China in the settlement of war claims against Japan.

When Japan surrendered in 1945, Taiwan was given to China to administer pending a transfer by treaty of the island from Japanese to Chinese sovereignty. Although when they first landed on Taiwan KMT troops were hailed as liberators, the rapacity of the new mainland Chinese overlords drove the Taiwanese to a bloody rebellion in 1947. In the late 1940s 2 million refugees, predominantly from Chiang Kai-shek’s KMT government, military and business community, fled to Taiwan following a civil war in China where Mao Zedong’s red army had the upper hand. By the fall of 1949, Taiwan was all that was left of the ROC, and in December that year, Chiang declared Taipei the “provisional wartime capital.” Although Japan renounced sovereignty over Taiwan in the treaty of San Francisco in 1951 (Article 2-b), it was never transferred either to the Nationalist China of Chiang Kai-shek (Jiang Jieshi) or his PRC rival. The status of the island has remained undetermined ever since. About 370,000 Aborigines inhabit the mountainous central and eastern parts of the country. The “ethnic” Taiwanese, numbering over 18 million, are descendants of Chinese who migrated from Fujian and Guangdong Provinces, primarily in the 18th and 19th centuries. The “mainlanders,” who arrived on Taiwan after 1945, came from all parts of China.

2.- The Kaoshiung Incident in December 1979 galvanised the Taiwanese on the island and overseas into political action. The Dangwai (“outside-the-party”) democratic opposition started to question the KMT’s claim to represent all of China, and began to work towards ending the 40-years’ old martial law. The movement subsequently formed the basis for the democratic opposition of the DPP and its overseas support network of Taiwanese organisations in North America and Europe. Virtually all leading members of the present-day democratic opposition had a role in the event, either as defendants or as defence lawyers. In September 1986, the Democratic Progressive Party (DPP) was founded, which then began its growth into a full-fledged opposition party. Martial Law was finally dropped in 1987, but replaced by a National Security Law. However, it wasn’t until 1991 that the KMT claim to rule all of China was dropped.

3.- Economic growth crawled in at 1.06 per cent in the first quarter which compromised the initial objective of a 6 % growth for 2001. The unemployment rate reached 4.51 % in July 2001 while the directorate general of Budget, Accounting and Statistics released the worst-case scenario for full-year jobless rate at 4.1%. See the interviews with Minister of Finance, Yen Ching-chang and President of the Chunghua Institution of Economic Research, Mai Chao-cheng, in this issue.

4.- Adopted on 25 Dec 1946, revised in 1994, and amended in 1997.

5.- On February 14, 2001, the DPP government announced that it would resume construction of Taiwan’s fourth nuclear power plant after the Council of Grand Justices ruled in a constitutional interpretation-judgment that the administration’s earlier decision to scrap the project was procedurally flawed. According to the DPP platform, the party is against building new nuclear power plants and seeks to close the three existing nuclear plants in Taiwan within 10 years. A few months before that, a tremendous debate raged in Taiwan about nuclear energy supply. The Council of Grand Justices’ Ruling 520 on the issue of the Fourth Nuclear Power Plant provides a clear answer as to which direction Taiwan’s democracy should proceed. First, the ruling said that the only way President Chen Shui-bian can keep his anti-nuclear campaign promise is through the consent of the Legislative Yuan.

Prior to the ruling, Chen asked himself time and time again what is the point of being president if he could not keep his anti-nuclear stance. Premier Chang Chun-hsiung echoed Chen and said that it was “very odd” that a party with different ideals cannot change a previous government’s policy. While the council has delivered its ruling, the minority government continues to stubbornly stand by such logic.

From the constitutional point of view, there is nothing odd about the ruling. If one can do whatever he or she wants just because he or she becomes president, then that person is an emperor instead of a president that we elect every four years. Second, what the ruling declares is that under any constitutional system that contains parliamentary characteristics, the parliamentary sovereignty is the primary principle that regulates the executive-legislative relationship. The legislative power is the only source of power. Needless to say, its hierarchy is superior to that of executive and judicial powers. If there is no legislative power to make laws, how can the executive power execute the laws? The council has made it clear that the nuclear plant issue is not about whether it is good or bad, but about whether the Legislative Yuan should be able to decide whether to keep it or not. As Taiwan had no referendum law at the time, the issue of the nuclear plant debate ultimately lies in the majority in the Legislative Yuan. Take France for example. The anti-nuclear Green Party currently participates in the so-called “pluralist leftist” coalition government, but is constrained by its limited seats in the parliament. The Minister of the Environment, who is also the Green Party’s chairperson, can only strictly implement the regulations regarding the disposal of nuclear waste, but cannot change the fact that nuclear energy generates most of the electricity supply in France.

Today, with the California energy crisis putting back on the agenda the nuclear energy option on the agenda of the US administration, it remains to see how the Taiwanese government will pursue its anti-nuclear stand.

6.- The likely reason for the delay which may become a cancellation is that the economic situation makes it unlikely for the government to win support for its non-nuclear option. The result would have seriously weakened President Chen just before the legislative election.

7.- 164 people were prosecuted for so-called “black-gold” offences. They included seven legislators and four county magistrates/provincial city mayors. 209 cases related to organised crime were investigated, out of which 106 were prosecuted. A further 559 cases were investigated for bribery offences (only 63 cases involving 141 people were prosecuted). And of the 3,042 cases linked to corruption, only 339 cases (800 people) have so far been prosecuted.

Summer 2001

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