Saturday, June 28, 2008

With a Cold Eye: Lawmakers, Beware the People's Judgment!

With a Cold Eye: Lawmakers, Beware the People's Judgment!
United Evening News reporter Kuo-Liang-huang / Special]
June 25, 2008

Wang Chien-hsuan (right) and Shen Fu-hsiung, Nominees for President and Vice President of the Control Yuan

Ma Ying-jeou has nominated Wang Chien-hsuan President of the Control Yuan. The public is enthusiastically applauding the move. But Wang Chien-hsuan's declaration that Control Yuan nominees need not visit the Legislative Yuan to solicit their votes has angered the Legislative Yuan. Today legislators threatened to humiliate Wang Chien-hsuan by rejecting his nomination. Superficially they were confronting Wang Chien-hsuan. In reality they were confronting Ma Ying-jeou. In fact, no matter who is right, this sort of senseless confrontation has left the public thoroughly disillusioned.

The Control Yuan is a safeguard against corruption. Its purpose is to prevent graft and the abuse of power. Therefore, any debate about the nomination process should be about who is qualified for the position. The debate must not be about who must be rejected or shut out of the Control Yuan based on whether they are willing to solicit votes. If the debated degenerates into an infantile contest of wills -- if you solicit my vote I will support you, if you don't solicit my vote you will suffer the consequences -- then the public can only lower its head and sigh.

The understanding Ma Ying-jeou and Wang Chien-hsuan have is correct. Control Yuan members are nominated by the president. The legislature then exercises its right of approval. That does not not mean that nominees ought to solicit votes from legislators. Anyone who solicits votes is making an appeal based on personal relationships. If the Control Yuan kowtows to legislators, if it genuflects before them in order to be appointed, how can they possibly execute their duties in accordance with the letter of the law, by impeaching officials guilty of malfeasance?

Wang Chien-hsuan is known as "Saint Wang." He is revered by the public. If their motive is to butt heads with Ma Ying-jeou, if their motive is to declare war on Ma Ying-jeou, legislators should pick another issue. If they use Wang Chien-hsuan's refusal to solicit votes as an excuse to vent their spleen, if they attempt to turn the issue into a political football, if they turn the issue into a war between Wang Chien-hsuan and the Legislative Yuan, they may defeat Wang Chien-hsuan in the Legislative Yuan. But in terms of public image, the Legislative Yuan will only shoot itself in the foot. If they insult a former official known for his personal integrity, merely to embarrass him, the ones actually embarrassed will be themselves. They will bring shame upon the Legislative Yuan. In order to engage in political wrangling, they will sacrifice Wang Chien-hsuan.

The public has enormous respect for Wang Chien-hsuan's character. It is said that after his physical examination early this year, he made out his will. He arranged to donate all his worldy possessions to charity. He expressed gratitude for all the support his wife gave him over a lifetime. He also joked that the only thing he's not willing to donate is his wife Su Fa-chao. Today Su Fa-chao told reporters she was reluctant to see Wang undergo the nomination process for President of the Control Yuan under such circumstances. The couple's expression of feelings have touched the peoples' hearts.

Wang Chien-hsuan has confronted the Legislative Yuan in this manner. Ma Ying-jeou can not of course always approach the Legislative Yuan in a confrontational manner. As the leader of the government, Ma Ying-jeou needs to learn a little more finesse. This is something Ma Ying-jeou lacks. Otherwise, his administration will find itself hamstrung. The Legislative Yuan meanwhile must not treat everything as a bargaining chip and adopt such a haughty posture. The eyes of the public are on you as well. You too will be judged for your behavior.

2008.06.25 08:18 pm







Friday, June 27, 2008

The Government Must Beware the Impact of Fuel and Electricity Price Increases in July

The Government Must Beware the Impact of Fuel and Electricity Price Increases in July
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 27, 2008

The pain from the May 28 fuel price increase has yet to recede. But alarms from twin increases in fuel and electricity prices on July 1 are already sounding. When stagflation is rearing its ugly head, the DPP is proposing yet another agitprop "Tax Rebate Wealth Sharing" initiative. Will the Liu cabinet make a wiser decision this time? We are all waiting with bated breath.

The opposition DPP is screaming about tax rebates and wealth sharing. The ruling KMT on the other hand, is busy calculating price increases. The character of the two political parties is as different as night and day. The former thinks only of currying favor with voters, without regard for the long-term consequences. The latter thinks only of balancing the books, and seems oblivious to people's feelings. If the two parties were to complement each other's weaknesses, the DPP would act a a little more responsibily and rationally, and indulge in a little less vainglory and populism. The KMT would display a little more sensitivity, and a little less stolidity. Only then would the public on Taiwan cease being victimized by both camps.

In normal times, fuel and electricity prices would be adjusted regularly according to a reasonable formula that reflected production costs. They would of course conform to the iron laws of the marketplace. They would also allow businesses to remain in step with the global economy. But the situation facing Taiwan today can hardly be termed normal. Internally, energy and important raw material prices were artificially held down during the Chen Shui-bian era. Allowing prices to resume their market levels too rapidly would inflict too much pain on the public. Externally, the global economy is mired in stagflation. Any little misstep by the government could spell danger, with incalculable consequences.

In fact, during the last fuel price increase, We reminded the new administration that must not lose touch with public sentiment merely because it won a landslide victory in the presidential election. Unfortunately, the cabinet was firmly committed to the "immediate and full restoration of market prices." The result is its current dilemma. Market prices have not been "immediately and fully restored." The only thing immediately and fully restored has been public discontent. The rapidly eroding reputation of the cabinet is not the only cause for concern. The stock market's continued decline reflects inadequate momentum in Taiwan economy. Add public pessimism over inflation, and the atmosphere hardly conducive to government efforts to rally public morale. The twin increases in fuel and electricity prices scheduled for July 1 are bound to provoke intense public dissatisfaction. The current lull is merely the calm before the storm. It is not something for which the Liu cabinet can control. The only question is whether the Liu cabinet knows what it's in for.

An economy poised atop a slippery slope has been staggered by a one-two combination from the global energy crisis and stagflation. No government is going to find it easy to deal with such a matter. The Liu cabinet includes numerous experts in economics and finance. But that doesn't mean it's prepared for this sort of massive internal and external change. This group of administators is too elitist in its nature. Most worrisome is its lack of sensitivity to public opinion and its lack of flexibility in the face of changing conditions.

The Government must be guarded in its response to this wave of price hikes, for three reasons.

1. Consumer Prices. Changes in fuel, electricity, water, and fertilizer prices are the ones most likely to trigger price fluctuations further down the line. Once the price mechanism kicks in, it sweeps across everything in its path. The impact is irreversible. When the Ma administration took office it announced in advance its timetable for various price increases. This not only fueled expectations of price increases, it was tantamount to a self-fulfilling prophecy. Once a spark touches off a prairie fire, it will inevitably be blamed as the cause.

2. Public Psychology. After one month of wear and tear, the new administration has lost its original lustre. Most people are still willing to give it a chance. But their patience is wearing thin. This must not be ignored. May consumer prices rose 3.71 percent. Core Consumer Prices reached a new nine-year high. By contrast salaries have not increased for years. Taiwan is already mired in the swamp of stagflation. When public doubts about "Things improving immediately" increase, yet the government remains unaware of the warning signs, its reactions are much too tardy.

3. Political Promises. The biggest promise Ma Ying-jeou made to the people during the election was its promise to revive the economy. Taiwan's economy is currently in decline, with no signs of improvement in sight. The government has focused its attention entirely on price increases. This inverts priorities and leaves it open to charges of being a "Price Hike Cabinet." Besides, constantly stressing SOE revenues while neglecting the public's economic hardship, amounts to a display of callous indifference. If public indignation comes to a boil, and the government throws it another bone, that will restore neither public confidence nor consumer prices. The DPP is demanding "tax rebates and wealth sharing." This of course is transparent political opportunism on the part of sleazy politicians. But the Ma administration's efforts to balance the books for SOEs on the backs of the general public is equally foolish.

Assessing the current situation, the Ma administration must be especially leery of the impact of its July 1 fuel and electricity price increases. Its response must be measured. In particular, the economy must receive a full injection of new blood, allowing the market and public confidence to rally. It must not allow society to remain mired in the pessimistic atmosphere of stagflation.

2008.06.27 03:01 am


在 野黨嚷著退稅分錢,執政黨卻埋頭盤算著漲價,兩個政黨性格簡直異如天壤。前者一心只想討好選民,不顧國家社會的長期後果;後者卻只顧追求行政枝節的平衡, 似乎未能回應人民的感受。兩黨若能彼此互補一下,民進黨多一點責任理性、少一點浮華民粹,國民黨多一點普羅感應、少一點學究冬烘;那樣,台灣人民才不致兩 邊受罪。

若在正常時日,油電價格根據合理公式定期反映成本,當然最符合市場經濟的穩健法則,也能讓企業經營與國際經濟節奏合拍。但台灣今 天面對的情勢,能否稱為「正常」?從內部看,能源及重要原物料價格在扁政府時代經過一番扭曲,短期內要全部漲足,民眾的痛楚將極深重;向外看,全球經濟正 陷入一波「停滯膨脹」風暴,政府決策稍一偏失,即可能將台灣推進危險地帶,後果難以逆料。

事實上,在上次調漲油價之前,我們即曾提醒新政 府不可憑恃選舉之大勝而失卻對社會現實感的掌握;可惜,當時內閣卡在「一次漲足」的思維框框中,進退失據。結果是其實並未「漲足」,民怨卻已沖天。一個月 來,讓人擔心的不只是內閣聲望的滑落,股市連續下挫反映了台灣經濟的動能不足,再加上民眾對物價飛漲所表現的悲觀,這種種氣氛,都不利於政府再採取衝擊民 生士氣的決策。亦即,七一油電雙漲注定要承受強烈的民意反感,眼前的寧靜過後,將是什麼樣的風暴襲來,恐怕不在劉內閣的掌握之中,唯不知劉內閣對此有無正 確的感應。


我 們之所以呼籲政府務必謹慎因應這波漲價,主要理由有三:第一,就物價論物價,最容易引發物價連鎖波動的,莫過於油、電、水、肥等公用事業價格;其漲價機關 一旦啟動,就是橫掃百業,無法逆轉。馬政府未上任即已預告各項費率漲價時程,不僅助長預期心理,也形同以物價「推手」自居;一旦野火燎原,必定成為眾人怪 罪的「禍首」。

第二,從民眾的心理看,政府的新銳之氣經過一個月磨損,已失去原先的光華。多數人雖仍抱持著善意期待,但人們受苦的耐心禁 得起多少挫折,實不容高估。五月份消費物價上漲百分之三點七一,核心物價漲幅更創下九年新高,對比薪資多年未漲,台灣實已踩在停滯膨脹的泥沼裡。當社會上 對於「馬上就會好」的質疑聲浪越來越大,政府若還察覺不出其中警訊,未免太過遲鈍。

第三,從政治承諾和決策選擇看,選前馬英九給人民最大 的承諾,是要重振經濟。現在,台灣經濟頹勢未見起色,政府卻把全副重心放在調漲價格,不僅本末倒置,也只會招來「漲價內閣」之譏。而且,一味強調公營事業 營收,卻輕忽民生疾苦,這展示了什麼施政仁心?何況,萬一決策招致民怨沸騰,政府再另拋利多去平息眾怒,恐怕也搶救不回民心和物價。民進黨要求「退稅分 錢」固然是政治投機客的近利思維,但馬政府以全民痛苦為代價替公營事業的財務爭平衡的做法,不也愚不可及。


Thursday, June 26, 2008

Ma Ying-jeou: Do Not Allow Talk of "Retreating to the Second Line" Bind You Hand and Feet

Ma Ying-jeou: Do Not Allow Talk of "Retreating to the Second Line" Bind You Hand and Feet
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
June 26, 2008

President Ma's comment that he has "retreated to the second line" has provoked considerable debate. What exactly is "retreating to the second line?" Have Ma's actions this past month been appropriate for a democratically elected president, as defined by the constitution? Put more simply, when Ma asks his financial and economic advisors "Why is the stock market falling without end?" are such expressions of concern consistent with "retreating to the second line?"

As everyone knows the stock market has fallen relentlessly ever since Ma assumed office. Investor losses can only be described as appalling. "Why is the stock market falling without end? is a question everyone ought to be asking. The only person who shouldn't be asking the question, at least not in public, is President Ma. After all, he is the one should be providing us with the answers. Although Ma has been in office for a full month, he has no idea why the stock market is falling without end. Yet he persists in commenting on matters that are none of his concern, such as whether rural primary schools should be eliminated, and whether Chuang Kuo-rong should keep his teaching post. Is this really the way to "retreat to the second line?"

True, President Ma is under the spotlight and in the hotseat. The slightest misstatement or misstep will invite a barrage of "damned if you do, damned if you don't" criticisms. But like it or not, President Ma must acknowledge a harsh reality. The people may support a president who respects his constitutional mandate. After all, Ma Ying-jeou received over 7 million votes. But they will not support a president who sticks his nose into matters that are none of his business, especially when he is still clueless about affairs of state one month after assuming office.

The past eight years of DPP misrule have provided the Republic of China with a valuable object lesson in how not to govern a nation. The KMT's return to power after a second change in ruling parties is providing the nation with another kind of lesson in constitutional rule. The key question is how will President Ma and the KMT define their roles during this process. Only a few comparisons are required to show how different the current political environment is from the past past eight years. During the eight years the DPP has been in power, a president elected by a plurality has presided over a minority government. Former President Chen never gave a damn about constitutional restraints on his power. He openly demeaned the constitution openly, in public. He expanded his powers without limit. He used and abused a string of Premiers. Outside observers concluded he was attempting to create an Imperial Presidency. Even more troublesome to Chen Shui-bian and the DPP was the opposition dominated legislature. Chen Shui-bian and the DPP were never willing to compromise or engage in dialogue. Instead they incited populist mob sentiment and butted heads with the opposition. The results were predictable. Eight years in office and nothing to show in the way of accomplishments. Its sole legacy? A negative example of how not to govern a nation.

Today's political landscape is the diametric opposite of what it was over the past eight years. We now have a majority President, and a ruling party that commands a supermajority in the legislature. Such an natural advantage gives President Ma an opportunity to realize his constitutional ideals. Ma Ying-jeou naturally cares more about the constitution than Chen Shui-bian. To him the constitution specifies a dual-leadership system. Therefore he does not want to encroach upon the powers of the Premier. Hence his declaration that he was "retreating to the second line."

Even more coincidentally, after Ma stepped down from the position of party chairman after being indicted by the Special Prosecutor in the Discretionary Fund case, Ma Ying-jeou had no intention of resuming his former role as party chairman. This has led to a situation never before seen under the old KMT: the sitting President is not simultaneously the Chairman of the KMT. This arrangement could be interpreted as Ma Ying-jeou's desire to be a "President to All the People." But this has already had immediate repercussions. The first is the president can no longer use the party machinery to mediate between competing departments. The second is that the party machinery tends to become a second arena in the struggle for power. To wit, recent speculation about whether Wang Jin-pyng, Chu Li-lun, or Wu Dun-yi will be the next party chairman.

President Ma has imposed "limits on himself" regarding relations between the Presidential Office and the Executive Yuan. He has also "totally severed" relations between the Presidential Offic and the KMT. The result has been what we have seen over the past month. A cabinet consisting entirely of career civil servants and academics, confronted by a barrage of issues in the legislature, and local authorities fighting tooth and nail over resources, finds itself at a complete loss about what to do next. Conversely, the KMT legislative caucus is using the opportunity to expand its power. Ma nearly lost control over the Diaoyutai Islands ramming incident. He even hoped to personally participate in cross-strait talks. Nominees for the Examination Yuan and the Control Yuan floated rumors and made threats. The result was every time President Ma came forward, the situation descended into chaos.

If the above phenomena, become the norm, one can safely predict that under President Ma the executive branch will become weaker and weaker. The legislative branch, given President Ma's forbearance, will become more and more presumptuous. The result will the undermining of President Ma's authority and leadership, and something akin to the Democratic Progressive Party's total loss of control. If this happens, President Ma's ratings will plummet a second time. Fortunately it is only one month into his term. He still has a chance to make changes. Having controversial issues come to a head earlier rather than later is not necessarily a bad thing. What matters is how President Ma uses his presidential mandate to define his role. That role has to be more than "retreating to the second line."

中國時報  2008.06.26









Wednesday, June 25, 2008

First Rank Academics Must Be Part of the Tax Reform Commission

First Rank Academics Must Be Part of the Tax Reform Commission
China Times editorial (Taipei, Taiwan, ROC)
A Translation
June 25, 2008

The composition of the Executive Yuan Tax Reform Commission and its modus operandi will soon be announced. The China Times has published numerous editorials analyzing the importance of this committee and offering suggestions for its future direction. Unfortunately the candidate roster announced by the Executive Yuan falls far short of tax reform ideals. We hope the Executive Yuan will rethink its roster over the next few days. It must offer a presentable list of scholars. It must use discretion from very outset.

We had hoped that the Chairman of the third Tax Reform Commission would, in contrast to the first and second Tax Reform Commissions, be a respected scholar. But the Executive Yuan intends to appoint Vice Premier Paul Chiu to the position. Other candidates' names appeared in media reports. Their academic credentials fall short of expectations. Since May 20, the Ministry of Finance has been earnestly endeavoring to implement the Ma Siew administration's policy proposals. It is apparently concerned that if an academic is appointed Chairman of the Tax Reform Commission, its policy recommendations may differ significantly from the Ma Siew administration's Tax Policy White Paper. So they simply had the Vice Premier double as chairman. Not only that, , even the vice chairman will be someone who contributed to the Ma Siew administration's White Paper. The intention of this "belt and suspenders" approach is apparently to ensure the seamless integration of the commission's conclusions with the Ma Siew administration's policy proposals. Such chairman and vice chairman assignments may be painstaking, but they also limit the commission's latitude. Frankly, after such contortions, people no longer expect much of the Tax Reform Commission.

In terms of qualifications, including seniority and erudition, Chen Ting-an, Chairman of the second Tax Reform Commission is the most suitable candidate for Chairman of the Third Tax Reform Commision. If Vice Premier Chiu doubles as chairman, then Professor Chen is the best candidate for vice chairman. In terms of practical experience and tax management ideas, former Minister of Finance Lin Chuan and Hsu Chia-tung are both outstanding scholars. They are smart, farsighted, and well received by the community. Unfortunately several candidates were omitted from the list leaked by the media. These omissions strike one as the deliberate neglect of genius and the glorification of mediocrity. If the nominees for chairman and vice chairman leaked by the media are accurate, then outstanding scholars of the first rank with a wealth of experience have been deliberately excluded. Instead, the scholars involved in the development of the Ma Siew administration's three Tax Reform Commissions have been forced to play ball. In which case the outside world's perception will inevitably be negative.

Compared to the Executive Yuan Mainland Affairs Council, we see how niggardly the Ministry of Finance was in its plans for the Tax Reform Commission. President Ma knows the public on Taiwan has different views on cross-strait policy. The appointment of Taiwan Solidarity Union legislator Lai Hsing-yuan as Chairman of the Mainland Affairs Committee was an effort to seek consensus. Besides criticizing her political coloration, the outside world leveled all sorts of personal criticisms against Lai Hsing-yuan. Yet the Presidential Office and the Executive Yuan maintained a unified front. They adopted a policy of inclusiveness to create a diversified platform for cross-strait dialogue. President Ma was open in promoting cross-strait policy. Why can't the Executive Yuan and the Ministry of Finance be equally open in promoting tax reform policy? The Ma Siew administration felt no need to force the drafters of their cross-strait White Paper on the Mainland Affairs Council. So why should the Executive Yuan reject other, more suitable candidates? Why must the drafter of the Tax Policy White Paper be in charge of the Tax Reform Commission? Cross-strait policy is a sensitive issue, affecting as it does the public's feelings about unification vs. independence. Even so, the government was able to increase participation by recruiting TSU personnel. Tax policy involves cold economic analysis. It is nowhere as politically sensitive as cross-strait policy. So why the compulsion to wrap oneself in a cocoon?

We would like to remind the Ma Siew administration that under democratic pluralism, with its free flow of information, whenever one is confronted with different views on policy, it is best to incorporate them into the system. it is best to be completely open, and not attempt to manipulate the dialogue. If tax reform advocates in academia are unable to find channels to express their views, if their views are suppressed, they will use the Internet, newspapers, or blogs to disseminate their views. Therefore, even assuming the commission was intended to be a body in which "What I say, goes." the public on Taiwan cannot allow the commission to lay down the law. Attempts to neglect ability and glorify mediocrity will not create consensus. They will merely give people the mistaken impression the government wants to ram through its agenda. In which case its losses will exceed its gains.

According to media reports the composition of the commission will be determined by the Ministry of Finance. This apparently reflects Minister of Finance Lee Sush-der's notion that "The Tax Reform Commission's purpose is to realize the Ma Siew administration's policy proposals." We really have no desire to comment on the Ministry of Finance's myopia. We are however deeply concerned about the Tax Reform Commission's direction. We hope Vice Premier Chiu will rethink his position. If Professors Chen Ting-an, Lin Chuan, former Minister Shea Jia-dong and other talented individuals are excluded, then the National Security Fund will probably be forced to prop up the market the very first day the Tax Reform Commission begins operation. Only a first rank scholar can come up with first rate policy prescriptions. Absent first rank scholars, one will only end up with third rate policy prescriptions. Chairman Chiu of the Tax Reform Commission has a long and difficult journey ahead of him. Even if we have to get down on our knees and beg, the Tax Reform Commission must invite at least a few first rank scholars.

中國時報  2008.06.25







Tuesday, June 24, 2008

Underestimate the Dangers of Inflation, and Pay the Price

Underestimate the Dangers of Inflation, and Pay the Price
China Times editorial (Taipei, Taiwan, ROC)
A Translation
June 24, 2008

International oil prices have skyrocketed from 100 USD a barrel at the beginning of this year to their current high of 140 USD a barrel. Although Saudi Arabia has agreed to increase production, oil prices will continue to rise. The entire world is faced with an inflationary crisis. Taiwan's Core Consumer Price Index (CPI) for May rose to its highest level in nine years. Its Consumer Confidence Index (CCI) fell to its lowest level in over seven years. Given prevailing public expectations, the Central Bank should take concrete action and demonstrate its determination to fight inflation.

Recently 30 major oil producing and consuming countries gathered in Jedda, Saudi Arabia, to discuss how to defuse the crisis in international oil prices. The largest oil-producing countries Saudi Arabia agreed to increase productivity beginning in July to 20 million barrels, from 9.7 million barrels per day. This is already the highest level of production since 1981, yet international crude oil futures prices continue to rise, with no signs of easing. Since 2000, international oil prices have increased 500 percent. Such a huge increase has led to comparable increases in fuel prices and other consumer product prices. Crop prices have increased several hundred percent. The impact on ordinary salaried workers has been horrific. The poor are having an even tougher time.

According to research from the Directorate General of Budget, Accounting and Statistics (DGBAS), the core CPI of 3. 23 percent in May established a new, nine-year high. In May the price of powdered milk, eggs and other foods increased by as much as 20%. The price impact on those who dine out has been as much as 10%. The May Consumer Confidence Index fell to a five-month low in 2007. With the new government's return to office, oil, electricity, and transportation costs have also risen. Public confidence in future prices is very low, Expectations of inflation are increasing.

When Ma took office, people genuinely expected to see better days. They did not expect international oil prices to shoot up further before the US subprime mortgage crisis took a turn for the better, the international political and economic situation became even riskier, and life became even harder. Under the impact of the US subprime mortgage crisis, global stock markets performed poorly. No one expected the once optimistic TAIEX to experience a 19 day losing streak. After the Ma administration took office, the global stock market hit bottom. People already suffering from rising prices found their funds frozen and their wallets shrunken. Many wondered whether the Ma Hsiao team had lost its magic touch. People expected the Old Hands of the Ma Hsiao team to take firm control. Increased fuel prices and electricity prices were intended to stimulate domestic demand. No one expected them to create problems, generate resentment, and trigger criticism.

In all fairness, Vice President Vincent Siew, Premier Liu Chao-hsuan, and Deputy Premier Chiu Cheng-hsiung held key positions during the Asian financial crisis 10 years ago, and have extensive practical experience dealing with financial crises. Today, 10 years later, the seriousness of the US subprime mortgage crisis has exceeded public expectations. Recently major Wall Street investment banks have been downsizing due to numerous losses. US stock markets have suffered a series of setbacks. The impact on Asian countries is gradually being felt. Most analysts never expected an Asian financial crisis, because Asian countries' economic structures are different from a decade ago. Many nations' economic and financial situation is sounder than 10 years ago, and should be able to cope.

Among the Asian countries only Vietnam is worrisome. A year ago Vietnam joined the World Trade Organization. It was the most attractive of the emerging batch of Southeast Asian tigers. Who knew one year later its status would change dramatically. Its stock market fell by 60%, real estate fell by 50 percent, and the exchange rate for their national currency is expected to depreciate by 30%. International credit rating companies blame the Vietnamese Central Bank's timid measures in response to inflation, set a poor example. In May this year, Vietnam's inflation rate touched off alarm bells. Consumer prices suddenly surged 25 percent, frightening away investors. Most analysts believe the Vietnamese Central Bank's interest rate increase was "too little, too late." This eventually resulted in runaway inflation. The main reason the Vietnamese Central Bank delayed raising interest rates was that political considerations outweighed all others. They worried that rate hikes would affect economic development. Indecisive wavering led to precisely the results they hoped against.

Vietnam's painful experience offers an object lesson for other Asian countries. If the authorities lack experience, and political considerations are foremost, a once stunning economic growth rate and investment environment will rapidly come undone. At the slightest rustling in the grass, and foreign investors who rushed to get in, will be the first to get out.

Taiwan's inflationary pressures are currently less serious than Vietnam's. Taiwan's economic structure is more mature than Vietnam's. But Vietnam's plight should not be taken lightly. Taiwan's economy relies primarily on exports. The NT dollar exchange rate increased this year by seven percent. To maintain export competitiveness, the banking sector thinks the central bank is unlikely to go all out by allowing the NT dollar exchange rate to float. Therefore raising interest rates has become a major tool to curb inflation. Over the past four years, the Central Bank has raised interest rates a total of 15 times. It has raised interest rates a total of 2.125 percent. But banks actually raised interest rates by only one percentage point. In fact, the impact was very limited.

Taiwan relies on imported gasoline. It is currently experiencing its most serious inflation in a decade. Taiwan's interest rates are low by Asian standards. If the Central Bank fails to show greater determination in its fight against inflation, if it worries about its every move, the consequences will be catastrophic.

中國時報  2008.06.24










Monday, June 23, 2008

Constitutional Interpretation 644: Will There Be a "Chinese Reunification Party" on Kinmen?

Constitutional Interpretation 644: Will There Be a "Chinese Reunification Party" on Kinmen?
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 23, 2008

Taiwan may soon legalize the establishment of a Communist Party or Taiwan Independence Party.

Last Friday the Council of Grand Justices issued Constitutional Interpretation 644. It ruled that provisions prohibiting civic groups from "advocating Communism or separatism" were inconsistent with the people's right to freedom of assembly, freedom of speech, and freedom of expression, as specified in the constitution, and should be considered null and void from this day forward.

In other words, future advocates of Communism or Taiwan independence, or Kinmen, Matsu, or Penghu's separatism or independence, must be permitted to form officially recognized political parties. The Ministry of the Interior may not reject their applications.

On the one hand, this is an important milestone in democracy. On the other hand, this is also a profound challenge to our system of constitutional government. For example, suppose one day the island elects a County Magistrate who belongs to a "Chinese Reunification Party " or a "Kinmen Independence Party?" That may not lead to immediate reunification or independence. But it will certainly affect Taiwan's political situation and cross-strait relations.

Communism and Taiwan independence are Taiwan's two major political problems. People may have different about Communism's theory of class struggle. But a Taiwanese Communist Party working in conjunction with the Chinese Communist Party could enjoy considerable leverage in cross-strait affairs. Conversely, because parties advocating Taiwan independence enjoy the right to freedom of association, they will inevitably have an impact upon Taiwan's political spectrum and political climate.

Constitutional Interpretation 644 seems progressive. In fact it lags behind current realities. Take its declaration regarding the advocacy of Taiwan independence. The DPP already has a "Taiwan Independence Party Constitution." The Taiwan Independence Party and the Taiwan Solidarity Union are also well-known Taiwan independence parties. Take its declaration regarding the advocacy of Communism. Many social movements have left-wing political colors. They also have links with mainland China. Members of the public occasionally drive sound trucks displaying PRC flags broadcasting leftist slogans. No one seems terribly concerned.

Constitutional Interpretation 644 does not establish any new civil right. It merely acknowledges the existing political reality. In fact, Taiwan's politics have already gone beyond the issue of whether one may advocate Taiwan independence or Communism. Instead the issue is how to cope with Taiwan independence and Communism, given a framework of democracy.

Regarding Taiwan independence, the amending of the "100 Criminal Laws" in 1992 already made Taiwan independence thought crimes and Taiwan independence speech crimes a thing of the past. The Taiwan Independence Alliance and other such groups are highly active. But this does not mean advocacy of Taiwan independence is about to become the Conventional Wisdom. Dealing with Taiwan independence using democratic means has allowed Taiwan independence to achieve a higher media profile, but it has actually weakened Taiwan independence in actual substance. For example, how long has it been since we have heard the call for "Taiwan independence nation-building?" The term has been replaced by such vague terms as the "Rectification of Names and Authoring of a New Constitution." or the "Normalization of the Nation." The January 2008 Legislative Elections and March Presidential Election could be considered a repudiation of Chen Shui-bian and the DPP's Taiwan independence political machinations by a majority of public at the polls. One might say that ever since the amendment of the "100 Criminal Laws," the laws no longer prohibited Taiwan independence. Instead Taiwan independence has been repudiated by the public at the ballot box. It has led the DPP stepping down. If the next round of legislative elections are conducted according to the "single constituency, two vote" system, and the presidential election is changed to an "absolute majority" system, then the fate of the Taiwan independence movement and the direction of the nation will be decided via democratic elections.

Constitutional Interpreation 644 grants Communist Parties freedom of association. It also allows the public to advocate dividing the nation. Its impact is difficult to gauge. Germany prohibits the reestablishment of the Nazi Party. The United States has not allowed the establishment of a Communist Party. All of these constitute restrictions on freedom. As noted earlier, suppose one day a "Kinmen Chinese Reunification Party" or "Kinmen Independence Party" wins the parliamentary elections and county magistrate elections? Suppose one day, given "China's rise," a "Taiwan Communist Party" appears? Suppose it makes a persuasive case for reunification with the mainland? This will be one of many unpredictable consequences of Taiwan's democracy.

Constitutional Interpretation 644 deserves to be affirmed. But it will test Taiwan's democratic system. As mentioned above, The Council of Supreme Justices has merely acknowledged existing political realities. Over the past 20 years Taiwan's democratic system has accumulated considerable experience in coping with Taiwan independence and Communism. Taiwan's political consensus is that Taiwan's future must be the joint decision of 23 million people. If that is the case, then the value of Taiwan independence and Communism will also be decided by 23 million people.

Freedom comes first. especially freedom of association. If one day a real Communist Party and a real Taiwan independence party appear on Taiwan, democracy must reign supreme. Taiwan's fortunes, for better or worse, and Taiwan's direction, must remain in the hands of 23 million people.

2008.06.23 03:12 am












Friday, June 20, 2008

One Month Ago the KMT Stepped Up and the DPP Stepped Down

One Month Ago the KMT Stepped Up and the DPP Stepped Down
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 20, 2008

Inauguration Day May 22, 2008

As of today, the Ma administration has been in office exactly one month. By the same token, the DPP has been in the opposition for one month.

For the Ma administration, there was no honeymoon period. Soon after it took office, six-hour long lines formed at gas stations. The repercussions from the Diaoyutai ramming incident are still being felt. One month has whizzed by, with hardly a day of peace. Yin Chi-ming's oil price hikes, Chen Chao-min's remarks on the 319 Shooting Incident of 2004, Francisco Ou's green card controversy, and Chen Wu-hsiung's fertilizer hoarding issue have all provoked demands for their resignations.

The Liu cabinet has been in office less than a month. Yet there have been calls for four cabinet members to step down. What exactly is the problem? Must the Liu cabinet learn the hard way, by means of "shock treatments?"

Since the Ma administration took office, the political landscape has changed. The public need no longer listen to endless static about "love of Taiwan vs. a lack of love for Taiwan," hate speech about "Taiwanese vs. Chinese pigs," "elimination of Chiang influences and de-Sinicization," and "rectification of names and the authoring of a new constitution." Political differences may not have gone away, but at least they are not longer drawing blood. The greatest consolation the second change in ruling parties has granted the people is liberation from never ending Blue vs. Green confrontation. The focus of public debate has shifted from "Taiwan independence" and "Taiwanese, not Chinese" identity politics to public policy issues. No longer is the government using controversies to divide the community. Instead, the community is setting the agenda. The public no longer has the uneasy feeling that its leaders are manipulating them. Instead the public is setting the agenda, and politicians are following their lead. Examples include oil prices, cross-strait issues, and the stimulation of domestic demand.

The Ma administration took office one month ago. Since then, one crisis after another has exploded in rapid succession, in unprecedented fashion. Major earthquakes are often accompanied by powerful aftershocks. If these crises are not handled properly, they can seriously damage the Ma administration's image. But if they are handled well, or considered handled well in retrospect, the Ma administration's stock may rise. The Ma administration took advantage of the Boao Forum to play the Vincent Siew card. It ordered the ROC Coast Guard to escort a private fishing vessel, the Quanjiafu, allowing it to circumnavigate Diaoyutai island. These are miraculous achievements. On the other hand, annoucing a gasoline prince increase at 5:45pm and failing to preempt the hoarding of fertilizers amount to shooting itself in the foot. Furthermore, the green card controversy was from beginning to end, a crisis of the Ma administration's own making. Ma administration crisis management turned out to be crises managing the Ma administration. More than one political appointee put his foot in his mouth, including Premier Liu Chao-hsuan, who said that that "giving up one's green card constituted a personal sacrifice." Obviously somebody forgot to tighten the screws.

Let's review the crises which have exploded since the DPP stepped down last month. The DPP has seized the initiative and has been setting the agenda. But it has failed to deal with the issues in sufficient depth. It has generated plenty of thunder, but little rain. Take cross-strait issues. Taiwan's opening to the mainland is a fait accompli. But the DPP has no idea how to deal with this macro trend. All it knows how to do is to deny the existence of the 1992 Consensus. It is unable to explain how it reached its conclusion. Take the Diaoyutai ramming incident. All it can do is accuse the Ma administration of being wishy-washy, of being suddenly soft then suddenly hard. It is unable to deny that the ROC Coast Guard circumnavigated the island, shattering a three decade old psychological barrier. Take the green card issue. It was later discovered that at least 22 DPP political appointees had dual citizenship, and that three "ambassadors" have green cards, including Representative to Japan Koh Se-kai, who has a "Sakura Card." The DPP has nothing of substance to offer on cross-strait and Diaoyutai issues. On the green card and other issues, the only dirt it has been able to dig up blew up in its own face. If the Ma administration ever learns how not to trip over its own tongue, the DPP may run out of issues to demagogue.

A month long ordeal, consisting of one crisis after another, all part of a larger struggle between the newly empowered KMT and the newly disempowered DPP. Major storms generate large waves. How will they impact the KMT and DPP's profit and loss columns? We will learn the answer only after the storm is over and the dust has settled. For example, the final verdict on cross-straits relations will depend upon the aftermath of the various summit meetings. The final verdict on the Diaoyutai ramming incident will depend on its impact on the national psyche. The final verdict on the government's policy of stimulating domestic demand will depend on its domestic political and economic consequences. In other words, on which party has dealt with these matters in greater depth. Whose impact will be greater, and who will emerge the victor, will be subject to the test of time.

The KMT government's greatest achievements one month into its term are: 1. A clearer sense of national identity, diminished frictions between community groups, and increased political stability. Amidst the hubbub, a quieter, more peaceful society has emerged. 2. Direct cross-strait transportation links and the confrontation over Diaoyutai have forced Taipei, Washington, Tokyo and Bejing to display greater flexibility, in theory as well as in practice. Important changes have already taken place. Taiwan will become more visible, and its status less rigidly defined. It need no longer be defined as a pawn in a "cross strait" or "Taipei, Washington, Tokyo" strategic struggle. It can now be considered a player in a "Taipei, Washington, Tokyo, Beijing" strategic scenario. Meanwhile, the KMT government faces major challenges. How will it achieve economic growth and social justice in the face of inflation and rising oil prices? How will it achieve its goal of an Asian Pacific economic and political platform?

The DPP may find it difficult to define this month's crises as grist for its mill or as its opportunity for a comeback. Once the KMT's fever has broken, the shock effect of these events and issues may help it find its way, eliminate blind spots and avoid dead ends. The Ma administration has been in office for only one month. Yet the DPP has been demanding that it step down. Such unreasonable demands, once discredited, will become less and less convincing over time. Therefore, the DPP had better redouble its efforts to find a new strategic objective. Guerrilla warfare and harrassment tactics may not be sustainable in the long-term.

For the past month the air has been thick with smoke. Some people consider it appalling that the new administration has descended into such chaos in only one month. Others see things differently. Others consider it fortunate that the Ma administration has been able to confront so many critical issues during its first month in office. Some are concerned about chaos. Others are wallowing in undisguised Schadenfreude. The DPP is probably rubbing its hands with anticipation at the prospect of a political atmosphere choked with impenetrable smoke. The KMT is probably working hard to ensure that the dust settles.

Over the past month, the air has been filled with smoke. The KMT government has repeatedly enacted the Chinese parable about the "Father and Son Riding the Mule to Market." No matter who rides or doesn't ride the mule, someone has condemned it. Will the KMT eventually find its way? Over the past month, the dust has gradually settled. The DPP however has seized on every opportunity to demand someone's resignation. Is this how it intends to fufill its role as an "opposition party with experience in governance?"

2008.06.20 03:23 am












Thursday, June 19, 2008

Joint Resignations Will Help the Ruling and Opposition Parties Define Themselves

Joint Resignations Will Help the Ruling and Opposition Parties Define Themselves
China Times editorial (Taipei, Taiwan, ROC)
A Translation
June 19, 2008

Representative to Japan Koh Se-kai's "Death before Dishonor" political gesture is pressuring Chen regime political appointees, foreign ministry officials, and executives of state-owned enterprises to submit a joint resignation. If this happens and the government conducts a thorough house-cleaning, then we really must give the DPP a giant thumbs up. If one is going to be an opposition party, this is the way to be an opposition party.

Doing so would at least solve an awkward dilemma that has prevailed ever since the change in ruling parties. On the one hand, the KMT would like to make major personnel changes as soon as possible. On the other hand, it is concerned it will be accused of carrying on a political purge. The result has been haphazard personnel assignments or rumors of personnel assignments that lead nowhere. The DPP meanwhile, constantly suspects the KMT of forming some sort of "Task Force for the Destruction of the DPP," of plotting to purge DPP appointees still in office. Now that the DPP is in the opposition, it must often witness its own members being humiliated by Pan Blue legislators. One month after the change in ruling parties, the ruling and opposition parties may have staked out their positions on the ideological spectrum, but neither side has been able to make any bold moves. Neither side is at ease. Wouldn't a joint resignation be an tremendous relief for both the Blue and Green Camps?

The ruling party could then act like a ruling party, and the opposition party could act like an opposition party. The sheep would have been separated from the goats. Pan Blue legislators would no longer be tempted to single out "Residual Greens" to cross-examine. Pan Green legislators would no longer worry about inadvertently burning one of their own. Nor would they have to endure the Blue Camp placing the blame on "officials from the previous administration." As DPP legislator Ker Chien-ming sees it, the DPP can't tolerate the KMT "using Green Camp political appointees as scapegoats to shift attention away from KMT incompetence."

Since the KMT has reclaimed the right to rule, and even promised "total governance, total responsibility," it should appoint its "Best and Brightest." But ever since the Green Camp accused Ma of conducting a political purge, he has been walking on egg shells. Many officials who should have been replaced have been kept on. By the same token, many officials appointed by the former administration find themselves caught in a dilemma. They don't know whether to stay or to go. At any moment they know they could be replaced. How many of them are going to have the presence of mind to implement new policy?

Reports of an alleged "Task Force for the Destruction of the DPP" are really rather absurd. If the DPP is so feeble it can be destroyed by some Blue Camp "Task Force," then the game is already over. The DPP might as well pack it in. Eight years ago, when the Democratic Progressive Party came to power for the first time, how did it treat Blue Camp officials who remained in office? Today the Blue Camp is merely treating them the same way. If you can't stand the heat, get out of the kitchen. Why not use the opportunity to establish a tradition of joint resignations based on whoever is the ruling party? Paranoid speculation about some "Task Force for the Destruction of the DPP" is unlikely to increase Blue Camp political momentum. But it could seriously diminish the DPP's stature.

Ironically, Representative to Japan Koh Se-kai's "Death before Dishonor" political gesture provides a way out of this predicament. If the Green Camp wishes to assign political responsibility for the Diaoyutai ramming incident, it can hardly blast the Ministry of Foreign Affairs while heaping praise on Koh Se-kai. The Green Camp can't wait to humiliate Pan Blue officials, but is unwilling to allow Koh Se-kai to appear in the Legislative Yuan, to be "humiliated" by Blue Camp legislators. To avoid the charge of double standards, the Green Camp's only choice is a joint resignation.

The solution is actually quite simple. The Blue Camp needs to assume total political responsibility. The Green Camp needs to provide comprehensive checks and balances. If five or six hundred officials in the Ma administration still have their hearts in the Green Camp, isn't something seriously wrong with the arrangement? The Green Camp was in the political opposition for a long time. The first time it took office it lacked the necessary talent, and was forced to recruit Blue Camp officials. This was entirely understandable. Since the Blue Camp insists it is "ready to go," it should have no problem filling hundreds of vacancies. If the KMT is not concerned about charges that it is conducting a "political purge," it should assign its own people to these positions and not look back.

Every time a U.S. presidential election results in a change in the ruling party, large numbers of former officials pack their bags and move their families home, to be replaced by new officials. Sometimes every four years. Sometimes every eight years. This is all perfectly normal. Nobody considers it the least bit strange. Nobody hints darkly of political purges of former officials. Nobody turns joint resignations into Greek tragedies. Nobody alleges the existence of a "Task Force for the Destruction of Such and Such Party." After all, this is nothing more than a routine change of ruling parties.

As for these five or six hundred officials, allegedly the DPP's Best and Brightest, will they all resign simultanously on orders from the DPP? We'll have to wait and see. After all, each of these officials has a different story. Some were promoted with great difficulty. Some really hustled to get themselves promoted. Some were hurriedly installed just before the change in ruling parties. Some have no intention of clinging to their rice bowls. Some are well qualified for their jobs. If the DPP issues an order demanding a joint resignation, how many of them will fall in line? We will know in just a few days.

中國時報  2008.06.19










Wednesday, June 18, 2008

Koh Se-kai's Desertion Under Fire

Koh Se-kai's Desertion Under Fire
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 18, 2008

After days of protests and denials, the Japanese government has finally expressed a willingness to pay compensation and to apologize for ramming and sinking an ROC fishing boat. ROC legislators have canceled their reconnaissance mission to Diaoyutai. The storm has temporarily died down. The most regrettable aspect of this major diplomatic incident, is continued partisan infighting on Taiwan, and the inability of the opposing parties to unite to defend the ROC's national interests.

Representative to Japan Koh Se-kai refused to report to the Legislative Yuan. Instead, along with another legislator, he held a press conference, condemning the Ministry of Foreign Affairs and demanding that it immediately approve his resignation. Koh Se-kai's gesture not only violated the civil service code of ethics, it was a serious dereliction of a diplomatic envoy's sworn duty. The two nations are mired in a controversy. When the Ministry of Foreign Affairs recalled ROC Representative to Japan Koh Se-kai, it was one way for the ROC to bargain with Japan. Yet Koh chose this moment to loudly announce his resignation. He not only deserted his post in the heat of battle, he publicly embarrassed his own government. No competent diplomat would ever betray his own country in such an underhanded manner.

Several Blue Camp legislators denounced Koh Se-kai as a "traitor to Taiwan." Their charges were inappropriate. But as the ROC's diplomatic envoy to Japan, Koh Se-kai is duty-bound to report to the legislature as a whole, not just a few impolite Blue Camp legislators. Yet he used this as an excuse to refuse to report to the Legislative Yuan. This was not merely an act of contempt for the legislature, it was also a dereliction of his solemn duties as a public servant. Therefore no matter how well Koh Se-kai might have performed during his term of office, at the crucial moment he let his country down. He came up short. He neglected his duties. He failed to speak on behalf of his country.

Koh Se-kai's dereliction of duty was rooted not merely in his possession of a "Sakura Card," i.e., Permanent Resident status in Japan, but in his Taiwan independence and Japanophilic orientation. Blue vs. Green animosity, aggravated by the recent change in ruling parties, with encouragement from Green Camp legislators, motivated Koh Se-kai's rash behavior. From Koh Se-kai's "sounding of retreat" we can see that diplomatic envoys are not the only ones afflicted with cognitive disorders. Partisan politics on Taiwan is rife with such befuddlement. Otherwise
how could the ruling and opposition parties indulge in partisan bickering when the nation is confronted by an external threat?

The Ministry of Foreign Affairs' recall of Koh Se-kai during the confrontation is a commonplace means of diplomatic protest. It was directed at Japan. Who knew Koh Se-kai would conclude it was directed at him? Who knew he would interpret it as an expression of new administration dissatisfaction with his performance, and as an attempt to humiliate him? Given his failure to distinguish between public and private issues, it is little wonder he failed to understand his solemn duty. As his country's Representative to Japan, Koh Se-kai should have been loyal to his nation and his government. Instead he was loyal only to the DPP. He defied the new administration's directives. Some people said his most significant achievement while in office was to successfully cast Ma Ying-jeou as an "anti-Japanese element." With diplomats such as this stationed in foreign countries, how can we possibly uphold our nation's larger interests?

The Chen Shui-bian regime has ripped apart society with eight years of Blue vs. Green demagoguery. What's worse, it has led the nation on a Quixotic political quest, for an unattainable goal. For eight years the DPP has been shouting "We love Taiwan." In fact, their shrill declarations of love for Taiwan have merely enabled them to question the loyalty of anyone "not one of us." They trumpeted their "bull in a china shop" diplomacy and their "scorched earth" diplomacy, but turned a blind eye and a deaf ear to challenges to ROC sovereignty, fishing rights and human rights. Koh Se-kai's desertion under fire is hardly an isolated case. It represents the DPP's befuddlement regarding national identity. They dare not proclaim sovereignty over Diaoyutai. They dare not argue on behalf of Taiwanese fishermen when their rights and interests are violated. When diplomats stationed in foreign countries are recalled to testify before the legislature, they play the partisan card. So the question is: How exactly does the DPP love Taiwan?

The Diaoyutai incident has triggered an island wide political storm. It has highlighted the island's identity crisis. If the nation is unable to unite in the face of threats to its sovereignty, how will it cope when confronted by more severe tests? The opposition party is hardly the sole culprit. Ruling party legislators have also stirred up trouble, clamoring for war and demanding the dispatch of troops. They have increased the executive branch's already heavy burden. This is hardly the way a ruling party should behave.

The current storm had a favorable outcome, primarily because incontrovertible evidence showed that a Japanese warship rammed and sank an ROC fishing boat. The new administration was therefore able to use public anger to demand justice. The rights and interests of the fishing boat owner will probably be protected, but the underlying problem remains unsolved. It is said that diplomacy is an extension of domestic politics. The soft power wielded by our civil society and our economic system can help increase the ROC's inadequate diplomatic breathing space. But irrational partisan bickering could become a burden for foreign policy. The Koh Se-kai incident has added a new wrinkle to the Diaoyutai incident, and is something the ruling and opposition parties must consider as part of the larger picture.

2008.06.18 03:08 am









Tuesday, June 17, 2008

Republic of China Vessels Circumnavigate Diaoytai for the First Time in 30 Years

Republic of China Vessels Circumnavigate Diaoytai for the First Time in 30 Years
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 17, 2008

Is Diaoyutai Republic of China territory or not? If it isn't, then all we can do is bite our lips and stare at our feet. If it is, then Japanese warships may not intrude into our sovereign territory and kill our people.

The Diaoyutai incident is currently occupying center stage. Not only is it a test of the ruling KMT government, it is also a test of the opposition Democratic Progressive Party.

Yesterday's ramming incident has led to two major developments. 1. On the part of the government: Defend Diaoyutai protestors boarded a boat named the "Quanjiafu" and entered Diaoytai Island waters. Over 20 Japanese ships attempted to block them. Republic of China Coast Guard ships positioned themselves between the Japanese ships and the protestors' boat, preventing the wake from capsizing the smaller boat. They positioned themselves to both the port and starboard sides of the Quanjiafu, helping it circumnavigate Diaoyutai Island. They even engaged in a water cannon duel with the Japanese ships. 1. On the part of the DPP: Representative to Japan Koh Se-kai, an advocate of Taiwan independence, offered his resignation. He attempted to force the Ministry of Foreign Affairs to "immediately approve his resignation." Former legislator Tsai Chi-fang returned to the Legislative Yuan and said: "Only Kinmen and Matsu are Republic of China territory. Taiwan, Penghu and Diaoyutai are not."

When the ramming incident first occurred, DPP legislators screamed for blood. They declared they didn't rule out a shooting war. They declared their willingness to sacrifice their lives for their country. But as soon as the government adopted a harder line, and recalled Koh Se-kai, its Representative to Japan, DPP Chairman Tsai Ing-wen abruptly changed her tune and said the government's response was "excessive."

Koh Se-kai's reaction was even more interesting. Japan expressed "regret" over the incident, but refused to apologize. ROC Minister of Foreign Affairs Francisco Ou said that Japan's response "fell short of expectations." Koh Se-kai however said "An expression of regret is an apology" and that the matter should "be considered concluded." How can one carry on diplomacy when an ambassador has the temerity to openly thumb his nose at the Minister of Foreign Affairs?

Before Taiwan independence advocate Koh Se-kai became a public official, he maintained that Diaoyutai is Japanese territory. Chen Shui-bian appointed him Republic of China Representative to Japan. The result was what we have today, suffering on the part of our own compatriots, and rejoicing on the part of our enemy. Koh Se-kai's resignation at this sensitive moment Is tantamount to deliberately kicking his own government when it is down. It is tantamount to deliberately humiliating the Republic of China. The ramming incident allows us to discern the vast difference between the Taiwan independence movement's concept of sovereignty and foreign policy, and the Republic of China's concept of sovereignty and foreign policy. Advocates of Taiwan independence such as Lee Teng-hui and Tsai Chi-fang go so far as to assert that Diaoyutai is Japanese territory. Other advocates of Taiwan independence dare not make such open declarations. But they are reluctant to challenge Japan's claims. That is why Tsai Ing-wen opposes recalling Koh Se-kai. That is why Koh Se-kai would like to consider the matter closed. That is why Tsai Chi-fang alleges that "Taiwan, Penghu and Diaoyutai are not Republic of China territory." Their reactions provide insights into the psychological workings of these individuals.

The DPP's response to the ramming incident is distinguished by two major characteristics: 1. The speakers are determined to insult their own government and avoid condemning Japan. When the government maintains a soft line, they adopt a hard line and blast the government. When the government adopts a harder line, they abruptly reverse themselves and blast the government for "excesses." 2. The DPP uses the media to humiliate the government, but categorically refuses to participate in or support public protests against Japanese aggression. When a fishing boat was turned over to Lee Ching-hua, the DPP took to the streets, demanding that it be turned over to political protest groups. Put simply, the DPP is using the Defend Diaoyutai movement as a pretext to engage in partisan warfare against the ruling KMT. It has never viewed the Defend Diaoyutai movement as a movement to defend the nation's territory against foreign aggression.

The ramming incident has once again exposed the DPP's hypocrisy and befuddlement. Open conflict has erupted with a foreign nation. How is one to resist foreign aggression, defend national sovereignty, and maintain national dignity with such a disloyal political opposition?

The Quanjiafu convoy represents the first time in 30 years that Republic of China naval vessels have circumnavigated Diaoyutai Island. The closest they came to the island was 0.4 nautical miles. This was the first time Republic of China warships openly confronted Japanese warships and declared that "Diaoyutai is Republic of China territory." Given such developments the ruling and opposition parties must reach a new consensus regarding Diaoyutai. As noted at the beginning of this article: Since Diaoyutai is Republic of China territory. Japanese ships have no right to intrude and ram our vessels. This is the only possible conclusion the public on Taiwan can reach. There is no alternative.

This Is a dispute over territory. This is a dispute over sovereignty. If the DPP considers a Japanese ship violating ROC territorial waters and ramming and sinking an ROC fishing vessel not "excessive," then our ships escorting an ROC vessel through ROC territorial waters can hardly be considered "excessive." Still less can recalling our Representative to Japan be considered "excessive." The situation being what it is, we hope the DPP will consider the big picture. We also hope the ruling KMT will respond properly. Yesterday's decision by the Coast Guard to navigate Diaoyutai waters, was authorized by our national security system. This is the right approach. By contrast, we take exception to members of the legislature hijacking the Defense Minister and forcing him to conduct an "inspection" of Diaoyutai. In June 2005, Legislative Yuan Speaker Wang Jin-pyng and Defense Minister Li Jye boarded an ROC ship and came within 38 miles of Diaoyutai. The Quanjiafu's private sector political gesture yesterday, along with the Coast Guard's numerous gestures are sufficient. Tomorrow's Lafayette frigate voyage is superfluous.

The Diaoyutai issue is the result of 30 years of weakness on the part of Taiwan. As a new beginning, the Coast Guard may wish to circumnavigate the island once a week. However everyone must have a well thought out plan. We must not be slapdash. We must not treat the waters around Diaoyutai as a stage for political posturing.

我國艦隻三十年來 首次繞行釣魚台一周
2008.06.17 03:11 am












Monday, June 16, 2008

Stability for the Wealthy: Responding to the Global Economic Tidal Wave

Stability for the Wealthy: Responding to the Global Economic Tidal Wave
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 16, 2008

Global inflation continues to arrive, wave upon wave, increasing uncertainty about the propects for continued economic growth, and leading to recent shocks in international financial markets. The US, mainland China, and Hong Kong market indices have fallen to new lows over the past year. A 25-day losing streak in Vietnam's Ho Chi Minh Stock Index triggered renewed concerns about a repeat of the Asian financial crisis. Even though warming cross-strait relations are providing some support, Taiwan has not been spared. The TAIEX has fallen over 10% since the new administration took office less than a month ago This betrays investor uncertainty. This year, beginning with the U.S. subprime mortgage crisis, the world economy has endured swiftly increasing oil prices and steadily increasing grain prices. Under their combined impact, the economic challenges are formidable, and the watchword in political policy is "stability."

The current wave of economic changes and market corrections can be traced back to early summer last year. Until last April the world's major economies were still intoxicated by the longest and strongest economic expansion in post-war history. The large scale crisis in the housing industry led to bankruptcies in the financial industry. The first shot fired, the subprime mortgage crisis, failed to alert the market. Only the Bear Stearns hedge fund collapse in July touched off a chain reaction. The market has experienced an across the board liquidity crunch. Central banks in Europe and America have joined hands in an attempt to save the market by means of capital injections. Only now has the market become aware of the seriousness of the problem, and made a series of corrections in asset valuations, policy, and regulatory structures. At the same time, high oil prices and high grain prices, long a hidden concern behind the economic boom, have reared their ugly heads. But the sense of crisis remains less intense than during the previous financial storm. Therefore it is not receiving the attention it deserves.

Problems have remained unsolved, and myopic policies have fueled inflation. For example, in order to solve the liquidity crisis European and American central banks have injected massive funds into the market. This may temporarily quench the market's thirst, but it will also delay the healing process. It will aggravate inflation. In order to forstall a recession, the U.S. Federal Reserve Board has repeatedly lowered interest rates. This may slow the slide into recession, but at the cost of higher inflation. It delays the response to changes in asset prices. In Asia, Japan was on track to raise interest rates. But now business loan considerations have put this on hold. The economy has not improved, but inflation has already increased. Among the emerging economies, mainland China's overall prospects remain the same, but already seems more tentative. Crude oil prices are controlled. Grain prices are subject to short term speculation. Unrelieved increases can easily cause significant distress. Others countries such as India, Vietnam, and Indonesia, adopted similar policies. But were forced to cancel them due to increasingly negative results.

The attention of financial market investors has turned from when the United States' subprime mortgage crisis will end, to whether global inflation is worsening and how the major economies are responding. Emerging economies in Asia kept their distance from the subprime mortgage crisis. Can they withstand this acid test, and survive catastrophic inflation? Developed countries experiencing across the board slow downs are paying particular attention. Emerging countries in Asia have been the most powerful driving force in global economic growth in recent years. Their forward momentum directly affects the performance of the global economy, especially because they are export-oriented economies. Asian countries today face difficult economic policy choices. When they began economic development they were heavy on growth and light on inflation. Now however, the bill has come due.

Theoretically speaking, the standard method for controlling inflation is raising interest rates. Countries dependent upon energy imports may even require currency supports. But no matter whether they raise or lower interest rates, they may increase their industrial overhead. This may affect their export competitiveness, reduce their corporate profits, and undermine their economic growth. Countries that suffered through the Asian financial crisis understand the importance of foreign exchange reserves. They have aggressively accumulated foreign exchange reserves and have actively encouraged domestic investment. As a result, the effectiveness of efforts to control inflation have been seriously diminished by more fundamental policy countermeasures. But if one allows inflation to worsen, not only will it impact current economic performance, it is likely to change a short-term correction into a long-term recession. It is likely to increase political risk, causing social unrest, leading to unpredictable consequences. Therefore the market is watching discreetly from the sidelines. Stocks in Asia have fallen even more than in Europe and America, reflecting investor concern.

Under such circumstances, many nations are changing their economic policies. The most important task now is controlling inflation. The US has ceased lowering interest rates. European central banks have indicated that they will hike rates. Asian central banks have also substantially increased their prime rates in order to stabilize their economies. The US has successively cut interest rates. Taiwan, by contrast, has slightly raised interest rates, demonstrating a steady hand. Judging by this, Central Bank CEO Peng Huai-nan has lived up to his reputation as a first class chief executive. One hopes he will maintain a steady course, and do what must be done.

2008.06.16 02:52 am







Friday, June 13, 2008

Tsai Ing-wen Rejects the 1992 Consensus

Tsai Ing-wen Rejects the 1992 Consensus
United Daily News Editorial (Taipei, Taiwan, ROC)
A Translation
June 13, 2008

Tsai Ing-wen said that when the ruling Democratic Progressive Party regains power, it may reject the 1992 Consensus.

If the Democratic Progressive Party regains power, it will not be before 2012. By then, on the basis of the 1992 Consensus, the two sides will have established direct flights across the Taiwan Strait, mainland tourism to Taiwan, and even Taiwan's entry into the WHO. By then, what exactly will the DPP be rejecting? The 1992 Consensus, or direct flights across the Taiwan Strait, mainland tourism to Taiwan, and Taiwan's entry into the WHO?

If the DPP hopes to offer a convincing cross-strait policy platform, it needs to get the jump on the KMT and not allow itself to be left behind. Tsai Ing-wen says that when the Democratic Progressive Party regains power (no earlier than four years from now) it may reject the 1992 Consensus. But four years from now, an extensive superstructure erected on the foundation of the 1992 Consensus will be a fait accompli. Does the DPP really have any alternative but to accept the 1992 Consensus?

A Chinese aphorism says that "when you point at the moon, you concentrate on the moon and forget about your finger." The 1992 Consensus is merely the finger. Direct flights and other cross-strait policies are the moon. The DPP must offer its own rationale for direct flights and other cross-straits policies. Rejecting the 1992 Consensus is no longer an option. Can declaring that four or eight years from now it will reject the 1992 Consensus unscramble the omlet?

In the past, The DPP proposed "doing away with the 10,000 Year Legislature" and "lifting martial law." It ran ahead of the KMT, it welcomed the future. If today it uses "Rejecting the 1992 Consensus when it regains power" as a rallying cry, then it is falling behind the KMT, and attempting to turn back the clock.

The DPP is still piecing together a new cross-strait policy platform. So far its main themes are: 1. Reject the 1992 Consensus. 2. Reject the term "Chinese Taipei." In fact, during the Chen Shui-bian era, it never openly opposed the 1992 Consensus. It merely alleged that "There wasn't any 1992 Consensus." Today, now that there is a 1992 Consensus, the DPP has no choice but to up the ante, and demand "One China, Different Interpretations." But since Hu Jintao already spoke the words "One China, Different Interpretations" during Bush and Hu's Hotline conversation, the 1992 Consensus is merely an abbreviation for "One China, Different Interpretations." Besides, "One China, Different Interpretations" has room for growth. During the Wu Hu Meeting the two political parties recognized each other as ruling parties. Therefore the 1992 Consensus, or One China, Different Interpretations, hold out the promise of pragmatic and positive developments. This is not something the DPP can control. The DPP is in danger of becoming marginalized, even of becoming an outsider. Besides, If the DPP believes the 1992 Consensus has some other meaning other than "One China, Different Interpretations," what would it be? If the DPP rejects participation in the WHO in the name of "Chinese Taipei," does it want to wage yet another divisive campaign to "Join the UN in the Name of Taiwan?"

Tsai Ing-wen said: "If the DPP regains power it will reject 1992 Consensus." This is predicated on the assumption it will regain power. Actually, the DPP's rejection of the 1992 Consensus and the term "Chinese Taipei" may be a choice thrust upon it by its status as an opposition party. For the DPP to adopt such a stance is actually helpful to the ruling Kuomintang. Because the KMT can use DPP opposition as a reason to improve cross-strait relations. Furthermore, this is probably not the path by which the DPP will return to power. Anyone with any political sense will find it hard to imagine that four or eight years from now, the DPP will emerge victorious on the basis of the campaign slogan: Down with the 1992 Consensus!

Tsai Ing-wen said: Taiwan's sovereignty is non-negotiable. But Tsai Ing-wen has not clarified her bottom line. Is it the "Resolution on Taiwan's Future?" If so, why does the DPP oppose changing the name of the postal service back to the "Republic of China Post?" Is it the "Taiwan independence Party Constitution" and the "Resolution for a Normal Nation?" Tsai Ing-wen has not clarified what is negotiable and non-negotiable. She has merely rejected "Chinese Taipei." But how many times has the DPP used the term "Chinese Taipei" during its eight years in office? At least once every time an international baseball game was held.

If the DPP hopes to regain power, it cannot simply "reject the 1992 Consensus." It must confront the new cross-strait scenario erected on the foundation of the 1992 Consensus. It must find a way for Taiwan to seek solutions and avoid problems, to achieve a win/win cross-strait scenario. It should stop trying to push aside the finger pointing at the moon. It should confront the moon already high in the sky!

2008.06.13 03:03 am










Thursday, June 12, 2008

No Matter How Rushed, The Law is the Law

No Matter How Rushed, The Law is the Law
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
June 12, 2008

The new government has been in office less than a week. Yet it is already asking for a supplementary budget in order to increase domestic demand and construct public infrastructure. Logically speaking local governments ought to welcome such a budget. To everyone's surprise the Legislative Yuan Budgetary Research Center announced it considers such subsidies illegal. Although Blue and Green camp legislators see matters differently, their conclusions are identical. Both have sharply denounced this 100 billion NT budget package. Both Blue and Green camp local government leaders are equally dissatisfied. The new cabinet has just come to power. Yet its first act has come to such an ignominious end. This ought to be considered a warning sign.

Why has a cabinet made up of veteran financial and economics experts fumbled so badly? Because it is congenitally defective. How? Over the past eight years people have endured too much pain. This inspired the Ma team to wage an election campaign proclaiming "We're ready!" and "Everything will be better, as soon as Ma takes over!" The result was Ma Ying-jeou received over 7 million votes, 2 million more than his opponent. Once the KMT returned to power, public expectations that "Everything will be better, as soon as Ma takes over!" became a cross the new administration had to bear.

In response to such expectations, the KMT think tank held intensive meetings just before the new administration assumed office on May 20. It explored ways to ensure that everything would actually get better when Ma took over. This is how the short-term contingency budget came into being. The intentions were good. The economic prospects were too depressing. Expanding domestic demand can revitalize economic growth, therefore it is a feasible approach. Over the past eight years the DPP government has also used supplementary budgets to underwrite additional construction or increase public employment, in order to revive the economy,.

But the supplementary budgets or special budgets proposed by the DPP government over the past eight years encountered the same problems as the new cabinet. Therefore the Legislative Yuan Budgetary Research Center will issue a report pointing out, with few exceptions, violations of the Budget Law. What's embarrassing is that for the past eight years the Legislative Yuan Budgetary Research Center has been a weapon of the KMT. But because the supplementary budget involved local government interests, KMT legislators merely went through the motions. They didn't block extravagant expenditures. They allowed the legal dispute over the supplementary budget and the special budget to remain unresolved, for eight years. Now that the KMT has returned to power, the issue is blowing up in its own face.

According to the Budget Law, supplementary budgets and special budgets are subject to preconditions. Supplementary budgets are responses to expanded authority, expanded operations, or major accidents. Shortfalls in revenue or major accidents will be brought to the President's attention by the Executive Yuan committee. Surely the recent change in ruling party cannot be considered a "major accident?" The DPP government submitted similar budgets to the Legislative Yuan in the past. These budgets were investigated by the Control Yuan. One year they discovered a 7.4 billion shortfall in revenue. The Executive Yuan failed to make up the shortfall in accordance with the law by using the previous year's surplus. The Control Yuan was forced to "correct" the Ministry of Finance's oversights. The special budget, meanwhile, being more akin to a transitional budget, must meet requirements for transitional budgets.

From this perspective, the Executive Yuan's decision to invoke the short-term emergency supplementary budget and special budget amendment is questionable. For example, the Executive Yuan originally assumed that weekend cross-strait charter flights and the arrival of mainland tourists in July would be an obvious and effective short term panacea providing a boost to the economy. That is why the Bureau of Environmental Protection proposed a 38,500,000 NT "environmental upgrade in response to mainland passengers arrival on Taiwan" supplementary budget. The amount may have been small, but the Legislative Yuan Budgetary Research Center nevertheless cited it as a Budget Law violation. The Bureau of Environmental Protection's needs were met. But they were promptly deleted from the supplementary budget and instead incorporated into regular budget expenditures.

This is the easy part. Many local governments' budget items have encountered similar problems. They have been rejected by the Executive Yuan and the relevant ministries. They have been asked to reconsider their requests. County and municipal governments first submitted their requests in late April, after the KMT think tank announced its proposal and local party heads had engaged in a preliminary exchange of views. They submitted a second request after the new cabinet took office on May 20. They submitted a third request after a controversy erupted in the Legislative Yuan. All told, county and muncipal leaders submitted three or four versions. After they submitted their budgets, they dared not assume that they would be approved. As a result, both budgets have been submitted to the Legislative Yuan for consideration or for first instance review. Yet the details were finalized only on June 20. What is this besides a joke at the Legislative Yuan's expense?

The new administration has taken office. Its earnest attempt to ensure that "Everything will get better as soon as Ma takes over" deserves affirmation. But some things simply cannot be rushed. The government's two major concerns, the annual budget and pending legislation are just such things. The new cabinet is not fully in place. The incoming administration does not fully understand how the outgoing administration's budget has been allocated. It does not understand local government needs. Nor does the new cabinet have time to get caught up on such matters. It must hurry up and propose supplementary budget cuts and special budget amendments. These are examples of haste making waste.

The new cabinet may be in a big hurry. The Legislative Yuan Budgetary Research Center has cited a number of legal violations. But no matter how unhappy the Legislative Yuan may be with the Executive Yuan's budget, the people are suffering. As long as the budget is not outrageous, it should be passed. Most importantly, the 2009 central government budget is about to come out. No matter how difficult it may be, the new cabinet must find time to work closely with the various ministries, legislators, and even local governments. It cannot make such decisions on its own, behind closed doors.

中國時報  2008.06.12