Tuesday, September 29, 2009

1949: Shattering the Myth of Winner Takes All

1949: Shattering the Myth of Winner Takes All
United Daily News editorial
A Translation
September 30, 2009

Tomorrow is the 60th anniversary of the founding of the People's Republic of China. In two years, it will be the 100th anniversary of the founding of the Republic of China.
1949 was the beginning of divided rule across the Taiwan Strait. The 1949 Civil War marked fact the conclusion of the domestic and foreign troubles that have plagued China since the Opium War of 1840. Among these was the 1912 showdown between the monarchy and the republic. The republic won, only to be plagued by more domestic and foreign troubles. It won a costly victory over Japan. In 1949, capitalism had a showdown iwth communism. The Communist regime occupied the mainland, and the Kuomintang regime retreated to Taiwan.

In essence, 1949 was about military victory and defeat. The KMT's "Three People's Principles" and the CCP of the "Communism" were basically window dressing for a military struggle. The KMT's yet to be implemented "democracy" and the CCP's "Communism" were merely superficial features of the student movement, the labor movement, and demands for the "killing of landlords, and the division of their land." The victory or defeat of the KMT and CCP had little to do with the right and wrong of their "isms." At the time these "isms" were mere slogans. The main reason for the KMT's military defeat was that it was the ruling government of a nation in ruins from endless war, beginning with the Opium War and ending with the Second Sino-Japanese War. The sole task of the CCP, on the other hand, was rebellion.

The struggle between the KMT and the CCP did involve "isms." Their respective battle cries had to do with the question, "Whither China?" The military struggle determined victory and defeat. But it did not determine right and wrong between rival "isms." Ironically, the issue of right and wrong can be seen far more clearly 60 years later.

In fact, the Communists of Mao Zedong's generation never really understood what communism was. They had only a crude understanding of communism, or else deliberately distorted its meaning. The founding of the People's Republic of China government was followed by the Three Antis, Five Antis Campaigns, the Anti-Rightist Rectification Campaign, the Three Red Flags Movement (The General Line, the Great Leap Forward, and the People's Communes), and finally by the decade long debacle known as the Great Proletarian Cultural Revolution. Was this really the meaning of Communism? Was this really how the Communist Party won the war against the KMT in 1949?

Winning does not make one a hero. Winning does not make one right. The Kuomintang lost the mainland for many reasons. For that it must take responsibility. It cannot shift all the blame onto the chaos that began with the Opium War and ended with the Second Sino-Japanese War. Besides, the Kuomintang made more mistakes on Taiwan, including the 2/28 Incident and the White Terror. But it also racked up an impressive record of achievements. These include democracy and the rule of law, direct presidential elections, changes in the ruling party, the criminal prosecution of a former president, and 60 years of free markets. This was the political and economic realm several generations of Chinese sought to achieve since the Opium War, the Self-Strengthening Movement, the Kang Youwei/Liang Qichao Reform Movement of 1898, the 1911 Revolution, the June 4th Movement, and the Chinese Civil War. The Taiwan region achieved free markets at least 30 years before the mainland. The Taiwan region lifted martial law and established democracy at least 20 years before the mainland. Moreover, during the past 60 years the Taiwan region has been on the track towards "progressive democracy." The mainland on the other hand, still has no timetable for the popular election of city mayors and county executives.

Some may say that the Taiwan region is too small. Its achievements count for little. But Singapore is small. Switzerland is small. Moreover, Taiwan's plight for the past 60 years has been difficult. Yet it was able to achieve freedom and democracy. Winning does not make one a hero. Being small does not make one wrong.

Sixty years ago, we decided between military victory and defeat. Sixty years later, we are deciding between political and economic right and wrong. The Beijing regime is now known in the Western world as an "enlightened despotism." For the CCP this is real progress. Homemade blast furnaces do not equal "Mr. Science," and the "Dictatorship of the Proletariate" does not equal "Mr. Democracy." Today those most able to help the Chinese people stand on their own two feet are not Mao Tse-tung's "class struggle" Communists. They are not the Communists who defeated the Kuomintang in 1949 by means of military force. They are Deng Xiaoping and the two generations of Communists who succeeded him. They are the Communists whose political and economic path more and more resembles that of the Taiwan region. In 1949 the KMT and CCP engaged in a life and death struggle over "isms." Today they are moving along the same track towards political democracy and economic freedom. The only difference is that the Taiwan region is a few steps ahead of the mainland. Furthermore, one can safely assert that Beijing must move increasingly toward democracy and freedom. It must increasingly relax its "Four Cardinal Principles." Only then can it truly undergo a "peaceful rise."

1949 was a long time ago. Today cross-Strait issues can no longer be resolved militarily. Internal and cross-Strait issues must be resolved in accordance with the principles of democracy and freedom. If Beijing believes cross-Straits issues are Chinese issues, then it can no longer use military force to determine victory or defeat. It must invoke democracy and freedom to determine right and wrong. By the same token, the public on Taiwan must be realize that when the Taiwan region implements democracy and freedom, its political and economic achievements provide a frame of reference for the whole of China. Taiwan can relate to the mainland on the basis of "neither reunification nor independence / both reunification and independence." It can relate to the mainland on the basis of an "ism," rather than the use of force. Taiwan independence, paradoxically, is the worst possible political strategy.

Tomorrow is the 60th anniversary of the founding of the People's Republic of China. The aspect most worth celebrating is the metamorphosis of "Mao Zedong's Communist Party" into "Deng Xiaoping's Communist Party." Democracy and freedom have replaced Communist dogma in cross-Strait relations. The time has come to determine right and wrong, and renounce the use of force.

2009.09.30 04:26 am











Detention Law Reform vs. Solidarity with Ah-Bian

Detention Law Reform vs. Solidarity with Ah-Bian
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 29, 2009

The High Court continues to detain former President Chen Shui-bian. It has cited three reasons: He is a flight risk, he would destroy evidence, and he has been convicted of a felony. Chen Shui-bian has filed suit against U.S. President Barack Obama, demanding that the United States Military Government in Taiwan intervene and demand his release. He is arguing that during his administration he frequently acted on orders from the American Institute in Taiwan, therefore he should be considered an official of the United States government.
When the public learned of this development, they were incredulous that Chen Shui-bian, a former head of state, would go so far to free himself from custody. They had trouble believing he would take such an unwise action and trample the dignity of the Republic of China, a sovereign and independent nation. They could not understand the logic behind his claim that a US military court should exercise its jurisdiction and demand his release. Ah-Bian's overseas legal move merely makes the High Court's decision to keep him in custody for another three months, for fear that he might be a flight risk, seem more reasonable than ever.

To be fair, regardless of how ridiculous Chen's idea might be, the court should not detain him merely because he is disrespectful. Is he being detained because he has been found guilty of a felony and handed a life sentence? Is continued detention under the Code of Criminal Procedures consistent with the constitution? There is room for discussion. This has universal relevance, and is not something relevant only to Ah-Bian. The pre-trial detention system is overdue for comprehensive review. Is Chen being detained because he has hidden large sums of money overseas and may destroy evidence? Defendants have no legal obligation to provide evidence of their own guilt. Therefore this ruling is questionable. Concerns that Ah-Bian has squirreled large sums of money overseas, and therefore may be a flight risk, are consistent with common sense. Now Ah-Bian is appealing to Uncle Sam for help. Once he is released, might he seek political asylum at the American Institute in Taipei, and make it difficult to continue legal proceedings? That is actually a easier scenario for the court to imagine. If Chen Shui-bian wants to avail himself of another nation's judicial processes in order to evade prosecution, that is his right. But if he expects America to rescue him, he is indulging in wishful thinking, and will only make it more difficult for the courts on Taiwan to believe he is not a flight risk. He is merely shooting himself in the foot.

His politically foolish and morally unscrupulous moves will only make it more difficult for him to win public sympathy. The Democratic Progressive Party's response to Ah-Bian's folly will also test its political wisdom. Not long ago, DPP Chairman Tsai Ing-wen demanded a meeting with Lai Ying-chao, President of the Judicial Yuan. He turned her down. She then demanded his resignation. This was another breach of protocol that ought to be examined.

When the Chairman of the DPP demanded a meeting with the President of the Judicial Yuan, she boasted that she represented millions of people. She said "I am not just any passerby." She said her request should not be rejected. But what was the purpose of her demand for a meeting? The public knows only too well that it was to demand an immediate Grand Justice ruling on the constitutionality of Chou Chan-chun and Tsai Shou-hsung's review of the Chen corruption case. The Grand Justice's ruling would have a direct bearing on whether the local court was legal, and whether its ruling in the Chen corruption case was valid. The largest opposition party banged on the door of the Judicial Yuan, demanding a hearing. It demanded a constitutional interpretation on an ongoing case pertaining to Chen Shui-bian. The DPP claim that it was not interfering with the administration of justice convinces no one. In fact, it is hardly the only case that would have be made vulnerable to judicial interference.

The President of the Judicial Yuan politely refused to meet with the Chairman of the DPP, as was his right. Society expects judicial independence. President Lai's refusal to meet with Chairman Tsai, on the grounds of judicial independence, was proper and wise. The Chairman of the DPP is the one who deserves to be criticized for lacking restraint and exceeding her brief.

The Chairman of the Democratic Progressive Party President is not just any passerby. That is precisely why the Judicial Yuan must avoid the perception that political parties have hijacked the justice system. Otherwise one is merely repeating the same mistake made by the Kuomintang in the past, when it "owned the courts." Otherwise the DPP is merely calling the KMT black. DPP leaders have explicitly declared that their preeminent concern is the defense of human rights, that they are not merely trying to cover for Chen Shui-bian. The public is having trouble believing them, because recently every one of the DPP's human rights demands has revolved around the Chen corruption case. The DPP is working in lockstep with the Chen defense team. The public sees no effort on the part of the Democratic Progressive Party to improve human rights per se.

Over the past two years, over 10,000 people have been subject to pretrial detention. Close to that number have been detained this year alone. Over 3,000 people are currently being held in detention centers. Many have been detained merely because they were charged with a felony, or might collude with others to falsify their testimony. How many people besides Ah-Bian are being detained for all three reasons at the same time? The DPP expresses solidarity only with Chen Shui-bian. It gives no thought to demanding changes in the system of detention. That is why the public sees through its human rights lip service.

Chen Shui-bian enjoys freedom of expression. He has the right to denounce the justice system and run crying to a foreign government. What we want to know is whether the Democratic Progressive Party feels any political or moral obligation to uphold our national dignity?

中時電子報 新聞
中國時報  2009.09.29
社論-推動修改羈押法制 比聲援扁更有意義










Monday, September 28, 2009

Rid the KMT of Factions, Now

Rid the KMT of Factions, Now
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 28, 2009

What does winning or losing an election mean? A single legislative seat? Or whether casinos will be built in a particular electoral district? On September 26, Yunlin held legislative by-elections and Penghu held a referendum on whether to legalize gambling. As it turned out, the KMT vote was split in the legislative by-elections, allowing the DPP nominee to ease himself into office. The results of the referendum, on the other hand, were contrary to expectations. Social movements staunchly opposed to legalized gambling prevented passage of the the referenda. Because most KMT officials supported legalization of gambling in Penghu, these local votes were characterized as "setbacks for the KMT," or even the "Ma administration's loss of power."

Based purely on the vote counts, the legislative seats, as well as the KMT's policy proposals, these inferences would be correct. But if one examines these two local votes at a deeper level, we may need to redefine victory and defeat.

Take the Yunlin legislative by-election. The by-election was necessary because the KMT candidate was declared ineligible following his conviction for bribery. KMT candidates in Yunlin must almost always accede to the demands of local factions. Toward the end of the Lee Teng-hui era, these local factions both depended on the KMT, and fed on the KMT. They have undergone very little change. Eventually they contributed to the downfall of the Lee Teng-hui regime, making it synonymous with "black gold." During the eight years since the change in ruling parties, some of these local factions have switched their allegiance to the DPP. Chiayi County has broken out of the stranglehold of these local factions. But most regions have changed little. They may be dependent on the KMT or independent candidates, but they are always making deals. These local political bosses are always hijacking the elections to maintain their local political and economic power base. Meanwhile, they eat away at the KMT. Yunlin County is a typical example. It is always Chang Jung-wei. It is always the Yunlin Irrigation Association. It is aways a case of "Meet my demands or I will back the DPP!" Chang Jung-wei definitely has power. His power, however, is always in the service of Chang Jung-wei. The Yunlin Irrigation Association is a local network cultivated by the KMT. But it is not that different from the Chang Jung-wei faction. For them, the KMT's raison d'etre is to ensure that the Chang Jung-wei faction or the Yunlin Irrigation Association does not fall.

These factions should change with the times in order to meet the needs of the people. They should establish clean government. If they were to do so, they would not constitute a problem. Unfortunately these local politicians who depend upon local factions for their survival, all play by the same old rules of the game. It makes no difference how well educated they may be, or how impressive their resume might look. Are the candidates unwilling to buy votes? No problem, the local political bosses who support them will do the buying for him. Is the candidate's son unwilling to buy votes? No problem, I'll buy votes for him. The local election system treats voters like idiots. Is it any wonder it suffered a defeat?

The Yunlin by-election has gained the DPP one more legislative seat. The impact of this one seat on the legislature is not that significant. The KMT still commands an overwhelming majority in the Legislative Yuan. The DPP is still a long way off from having enough seats to force a presidential recall. On the other hand, local factions now have the DPP in a stranglehold. The DPP would have been better off stiffening its resolve and declaring "honor before riches!" Ma Ying-jeou made just such a declaration during the controversy over the Hualien County party primaries. During the Yunlin County legislative by-election he demonstrated quiet determination, from beginning to end.

The Penghu referendum pertained to the legalization of gambling. Penghu's local politics are not as distinctive as Yunlin's. But neither is it that different. In the end, there is only the "King of Penghu." The local officials who surround the King of Penghu all sing the same tune. They want casinos. They began lobbying for casinos during the Lee Teng-hui era. During the eight year long Ah-Bian administration. these local politicians who depend upon the KMT, were miraculously able to gain the support of DPP heavyweights. Even former Vice President Annette Lu took the time out to make an inspection tour. But controversy over the casino has been too great. It has been repeatedly debated for over 10 years. But no one has been able to bring it to fruition.

President Ma Ying-jeou's campaign platform endorsed casinos in special districts on the outer islands, but only if local residents held a referendum. As with the Yunlin legislative by-election, Ma Ying-jeou remained silent from beginning to end. He allowed locals to make their own decisions. The King of Penghu had little chance to influence Ma Ying-jeou. Ma Ying-jeou expressed no opinions. KMT legislators' were also divided, and included both supporters and opponents. The legislature did not intervene in the referendum. It allowed local politics free reign. For the next three years at least, it will be unnecessary to waste energy debaing whether to build casinos on Penghu. Should other cities and counties should build casinos? Penghu County has established a precedent. A referendum is the easiest way to resolve disputes and achieve consensus.

The Kuomintang ruled on Taiwan for over half a century. Yet Black Gold brought this venerable party down overnight. The lesson is clear. The KMT has been back in power less than a year and a half. Yet the same special interests, the same outmoded ways of thinking are gradually re-emerging. The political calculations of local factions and party heads have never been based on deep convictions or high ideals. The results of the Yunlin County legislative by-election and the Penghu referendum have given the KMT a chance to re-examine their convictions and ideals, to recall the commitments they made back in 2008 in order to reclaim political power: integrity and reform.

中時電子報 新聞
中國時報  2009.09.28
社論-國民黨擺脫派系羈絆 此其時矣









Friday, September 25, 2009

In the National Interest: No Invitation to Kadeer

In the National Interest: No Invitation to Kadeer
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 25, 2009

The Green Camp recently invited the Dalai Lama, Tibetan spiritual leader, to visit Taiwan. Now it has extended an invitation to Xinjiang independence activist Rebiyah Kadeer. This time the invitation has nothing to do with humanitarianism. It has even less to do with religion. The Kaohsiung Film Festival is merely screening a documentary film on Rebiyah Kadeer. The invitation has provoked a backlash from the local Kaohsiung tourism industry. The Kaohsiung City Government responded by moving up the screening. Controversy has flared up, and the Green Camp is elated. The pro independence heavy metal band Chthonic visited Washington and invited Rebiyah Kadeer. Her visit is subject to the approval of the Ma administration. The Green Camp is watching to see how the Ma administration deals with this hot potato. They don't realize this hot potato is just like the Dalai Lama. It won't burn the Ma administration. It will only burn the DPP.
Rebiyah Kadeer is different from the Dalai Lama. Xinjiang's problems are different from Tibet's. Feverish Taiwan independence groups see the word "independence" and reflexively gave their approval. They have misunderstood the situation. They are harming the national interest. They are indulging in feel-good emotionalism, merely because of the word "independence." Their theatrics are futile and ignorant.

Kaohsiung City Mayor Chen Chu, eager to demonstrate her affinity with democracy, freedom, and human rights, made a special effort to see the Kadeer documentary ahead of time. After viewing the film, she said she and Kadeer were alike. According to the mainland, Kadeer did not come from a wealthy family. But thanks to reform and liberalization, a decade of struggle, and a special franchise granted by Beijing, she is now worth hundreds of millions of dollars. She is the richest woman in Xinjiang. Not only that, she was handpicked by the Beijing government and elected to the Eighth CPPCC National Committee. Apart from the fact that both Chen Chu and Rebiyah Kadeer both served time in prison, how is Chen Chu anything like Rebiyah Kadeer?

Not long ago, just before newly appointed Premier Wu Den-yih was interpolated in the Legislative Yuan, Green Camp legislators blasted Wu Den-yih for meeting with a "former CPPCC National Committee member." They accused Wu of colluding with Communists to sell out Taiwan. But isn't Kadeer a "former CPPCC National Committee member?" The Green Camp is cozying up to this life long beneficiary of Chinese Communist Party mentorship, and political and commercial sponsorship. Having benefitted, she is now biting the hand that fed her. In 1999 Kadeer was arrested for crimes against national security. In 2005 she was granted medical leave, and allowed to go to the United States. Before her departure, she promised "never again to participate in any activities that would endanger China's national security." But once she reached the United States, she plunged headlong into Xinjiang independence activities. In 2006 she was elected Chairman of the World Uyghur Congress. The World Uyghur Congress includes 20 East Turkistan separatist organizations in over 10 countries. It has engaged in terrorist attacks, and been identified as one of several terrorist organizations by Beijing. The 7/15 Incident and the recent needle attacks have provoked Beijing beyond its limits.

Taipei does not need to follow Beijing's lead. But neither does it need to deliberately invite Kadeer just in order to anger Beijing. The Dalai Lama spoke of love for peace. He has reiterated that he does not advocate Tibetan independence. He said he came to Taiwan solely to lead disaster victims in prayer. But why is Kadeer coming? What can she do for Taiwan? Preach Xinjiang independence? The intensity of the Xinjiang independence movement far exceeds anything the Green Camp can imagine. The Xinjiang independence movement sees independence for Xinjiang as a Jihad. Non-Muslim countries may not even assist or participate. But Xinjiang is not a region inhabited by only one ethnic group. It is true that Beijing has plans for Han Chinese to migrate to the region. But Xinjiang has long been home to Kazaks, Kirgiz, Kashgars and eight or nine other ethnic minorities. These ethnic minorities are scattered along Xinjiang's western border. They do not oppose the central government in Beijing. In fact they are responsible for garrisoning the Mainland Chinese border. The Xinjiang independence movement is based in southern Xinjiang, yet it often incites ethnic friction in northern Xinjiang. Is this really something pro-independence elements on Taiwan really want to see?

Green Camp organizations have Invited Kadeer. They hope the Ma administration will agree to her visit on the basis of "human rights." But if one wants to talk about human rights, why invite Rebiyah Kadeer? Why not invite pro-independence human rights icon Shih Ming-teh? After all, Shih was a "party outsider" and DPP Chairman who dedicated years of his life to human rights on Taiwan. The Green Camp has discarded its own human rights icon like an old pair of slippers. Instead it engages in Machiavellian calculation and underhanded political manipulation. It incites conflict within the community. It undermines cross-strait relations. But to what end? What is Taiwan to champions of Taiwan independence? Is it a land they can callously abuse?

When the Dalai Lama was about to visit Taiwan, the Presidential Office studied the matter for five or six hours, then gave its approval, on the basis of humanitarianism. It agreed on the basis of the welfare of the disaster victims. It followed through by treating religion as religion. It ensured that cross-Strait relations would not be damaged. Kadeer says she wants to visit Taiwan in December. The Ma administration has yet to express a position on the matter. It is over two months until December. Even if the Ma administration wants to drag its feet for two months before expressing an opinion, the Green Camp will not forsake this opportunity to play up the issue. It has demanded that the Executive Yuan provide an answer no later than Friday. Put bluntly, it wants Premier Wu to publicly respond during interpolation in the Legislative Yuan. It wants Wu to tell them whether the government dares to allow Kadeer to visit Taiwan? Is this hot potato hot? No it isn't!

Businessmen in Kaohsiung have risen in protest. They have demanded that the Kaohsiung City Government refrain from inciting controversy harmful to the local economy. So why is the Ma administration hesitating? The government must give priority to just one thing: the national interest. The Ma administration should come right out and tell the public that based on the national interest, it is not appropriate for Rebiyah Kadeer to visit Taiwan.

中時電子報 新聞
中國時報  2009.09.25
社論-為國家利益 不宜讓熱比婭訪台









Thursday, September 24, 2009

The Taiwan High Speed Rail Scandal: The Feelings of Ordinary Citizens

The Taiwan High Speed Rail Scandal: The Feelings of Ordinary Citizens
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 24, 2009

The Taiwan High Speed Rail Corporation (THSRC) scandal has been the focus of recent public attention. According to the Control Yuan, over the past few years the Continental Engineering Corporation was awarded contracts worth 106.2 billion NT. The Evergreen Group was awarded contracts worth 76.4 billion NT. The Teco Group was awarded contracts worth 40 billion NT, and the Pacific Electric Wire and Cable Company was awarded contracts worth 30 billion NT. Assuming a 10 percent net profit, these projects have netted the original shareholders over 25 billion NT in profits. If we compare this figure to the amount these four original investors put in, they have already earned more than enough. Now that these original shareholders have earned more than their share, they want out. They have even affected an injured air. Their behavior is totally unacceptable. If we think of the THSRC scandal as a marriage, then the government was the father of the bride, one who saw dollar signs. This encouraged him to give his daughter to Continental Engineering Corporation. Now the THSRC's assets have become liabilities, and the daughter's honor has been compromised. Does the government really bear no responsibility?
The THSRC project has enabled the original shareholders to make a killing, then palm the losses off on the taxpayers. It has set a black-hearted precedent for future entrepreneurs to emulate. Businesses usually empty their coffers through an averaging process. Let's say that someone controls a conglomerate that includes Company A and Company B. He has total control over Company A, but less control over Company A's cash flow. He has greater control over Company B's cash flow. He assigns the profitable functions to Company A, and the unprofitable functions to Company B. When the profits from the two companies are averaged out, he makes a killing in Company A, and suffers minor losses in Company B. The conglomerate as a whole suffer losses, but he lines his own pockets. The law states that when someone hollows out a conglomerate in such a manner, he is guilty of breach of trust.

The major shareholders of the THSRC used a different method to cheat shareholders. First the original shareholders assigned the profitable operation to themselves. They lined their own pockets. Then they dumped the unprofitable operations on the government, forcing it to clean up their mess. The government has no choice but to take it over. In the end of course, the taxpayers are the ones who must pay through the nose. Some observers have characterized the THSRC as a meticulous plan to empty out the public coffers. These observers may only be speculating. But the evidence suggests their speculations are not groundless. Let us examine the evidence, one piece at a time.

First, when the THSRC bid on the project, it promised that "the government would not have to put up one cent, but would earn hundreds of billons in profits." Now it appears that promise was empty talk. Should the government allow iself to be played for a fool? Secondly, the promises made during its tender offer never became a binding part of the original shareholders' contract. Why not? Third, why did the original shareholders refuse to contribute to the numerous capital injections that followed? Were they truly committed to the marriage? Fourth, why are independent bank groups unwilling to make capital injections? Are they pessimistic about the company's future? Fifthly, all subsequent capital injections were made by quasi-public enterprises such as the Aviation Development Fund and the China Technical Consultants, Wasn't this a violation of the promise that "the government would not have to put up one cent?" Sixth, why has ridership fallen so short of the original estimates? Do the original shareholders really bear no responsibility? Seventh, it is a simple matter for a company calculate how much it must borrow to pay off the interest on its loans. Was the THSRC really unaware of how burdensome these interest payments would be?

Many doubts have surfaced. But most of these doubts were raised long ago. The Continental Engineering Corporation promised that the "government would not have to put up one cent, but would earn hundreds of billons in profits." Many expressed doubts. The Ministry of Transportation and Communications is now tearing its hair out in search of a way out. But observers are pessimistic. Intuitively speaking, if the THSRC still had a chance to make money, the original shareholders, foxy as they are, would be taking the lead, hope to rake in huge profits. The reason they are cashing in their chips and allowing the government to intervene, is that they consider the THSRC beyond hope. They have already milked the project for all it is worth. When the foxes abandon the corpse, can government officials really bring it back to life?

The government has been conned. It must now clean up the mess and ensure accountability. Cleaning up the mess means rethinking transportation policy and the public interest. Ensuring accountability means considering the feelings of ordinary citizens, not allowing con artists to get off scot-free. Ensuring responsibility must not be limited to punishing incompetent civil servants. Even more importantly, it means prosecuting those guilty of crimes such as breach of trust, embezzlement, and providing officials with false information. Sun Tao-chun owed less than 300 million in back taxes. Yet society denounced him mercilessly. Meanwhile the THSRC has left behind hundreds of billions in debt. Can it really be treated more leniently? Sun brought down the family business his father left him. The THSRC, on the other hand, undercut the credibility of the Republic of China government, and cheated millions of taxpayers out of their hard-earned money. It should be abundantly clear which is the more serious offense. Premier Wu is focusing his attention on the economic plight of the average citizen. Perhaps it's time he expressed concern over the average citizens' feelings about the THSRC scandal.

中時電子報 新聞
中國時報  2009.09.24







Wednesday, September 23, 2009

Taiwan High Speed Rail: Opportunities and Challenges During Transition

Taiwan High Speed Rail: Opportunities and Challenges During Transition
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 23, 2009

The Taiwan High Speed Rail Corporation (THSR) has been in business less than three years. But it is already in dire financial straits, and carrying as much as 400 billion NT in debt. The government has intervened and mediated between its five original shareholders. Yesterday it called a special board meeting and accepted Chairman Nita Ing's resignation. A special shareholders' meeting is scheduled for November 10. The board of directors will be restructured. Quasi-official publicly-owned shares represent over half the board seats. That means the government will in effect be taking over the THSR.
As the public is well aware, the Taiwan High Speed Rail system is the largest BOT (Build, Operate, Transfer) project in Taiwan's history. According to the original specifications, the winning bidder would acquire a 50-year franchise. Upon expiration, the system would be unconditionally transferred to the government. But plans are plans, and reality is reality. During the "B" stage, the Taiwan High Speed Rail system ran into trouble, and was completed with great difficulty. Less than three years into the "O" stage, it has already amassed losses amounting to two-thirds of its investment. Its prospects are dim. The five original shareholders refuse to increase their investment. Therefore the government has ordered China Steel, Taisugar, the China Aviation Development Foundation and other government-led private companies, to provide capital injections, assistance, and loan guarantees. Operating losses remain high. If the existing management team does not wash its hands of the project, if it does not unilaterally terminate its contracts, the government must clean up the mess and assume over 400 billion NT in debt. Legal disputes may arise between public and private shareholders. The Taiwan High Speed Rail system may be forced to shut down. To avoid such a lose-lose situation, the parties are undergoing mediation. The Taiwan High Speed Rail Corporation will shorten the "O" stage and initiate the "T" stage ahead of schedule. This is probably the lesser of two evils.

The Taiwan High Speed Rail Corporation franchise will be turned over to the government. This means the myth of "BOT" has been shattered. The agencies in charge of the takeover must ensure that the Taiwan High Speed Rail system continues to operate without interruption. They must improve the Taiwan High Speed Rail Corporation's financial structure, enabling it to remain in operation indefinitely. Improving its financial structure means coping with over 400 billion NT in debt. It means raising enough capital to ensure its successful daily operation. The most direct method is capital reduction, capital injection, or assumption of the losses incurred by the publicly-owned shares. Such an approach will inevitably be criticized for using public funds to service the debt for the original shareholders. In the current atmosphere it is infeasible. Therefore Minister of Transportation and Communications Mao Chi-kuo has made it clear that the government takeover of the Taiwan High Speed Rail Corporation will adhere to a "Three Noes Policy." The government "will not purchase, will not increase its investment, and will not convert its preferred shares."

In which case relieving the Taiwan High Speed Rail Corporation's financial crisis will require the government to come forward and negotiate a new set of bank loans. Given current low interest rates, the THSR can use the new loans to pay off its old debts, thereby reducing its interest payments. Another approach is to extend the life of THSR capital depreciation and amortization. The THSR has been working toward these two approaches over the past year. So why are they dead ends? Because the banks are not optimistic about the financial prospects of private sector companies operating the THSR. They are reluctant to lower lending interest rates because they fear reduced income. As for extending the life of THSR capital depreciation and amortization, the base period was originally calculated on the basis of franchise operations. Naturally, officials cannot lightly agree to extending this period. If the THSR degenerates into an outright SOE, but co-ordinates its policies with public sector banks and the Ministry of Transportation, we can expect new loans and an extension of the life of THSR depreciation and amortization. This would alleviate the financial burden on THSR.

If the THSR becomes "quasi-public," it may benefit in these two areas. But to truly solve the problem of huge debts, or even achieve a surplus, it must increase profits and reduce losses. The THSR was under severe financial constraints from its very inception. But from the point of view of "commoners," its senior executive salaries are "fat cat" salaries. The board will be restructured. Operations will begin anew. The new management team must tell us how it intends to control personnel costs.

How will it increase capacity in order to increase revenue? A fare increase is clearly necessary. In this regard, new companies actually have a better chance than old companies. The domestic customer base will develop new travel habits. The establishment of Three Links will bring tourists and businessmen. This new management team must develop these customer sources. The quality of service of course must not be compromised.

Another way to increase revenue is to develop the areas around THSR stations. The original estimates for development of the areas around THSR stations were too optimistic. Future success remains dependent upon the fate of the local economy. The ownership of the land around THSR stations must be clarified. THSR operations are not the same as land development. Will the new management team be able to cope?

The myth that the THSR project would be BOT, therefore would not need government funding, has been shattered. The government however deserves credit for intervening before the situation became untenable. The new Taiwan High Speed Rail will be both publicly and privately operated. How will it escape its predicament? That will be its severest test.

中時電子報 新聞
工商時報  2009.09.23









Tuesday, September 22, 2009

Shrill Demands for UN Membership are not Pragmatic Diplomacy

Shrill Demands for UN Membership are not Pragmatic Diplomacy
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 22, 2009

Beginning In 1993, the Republic of China government in Taipei began actively seeking to rejoin the United Nations. For 16 years it knocked on the UN's door. This year, for the first time, it changed its strategy. It no longer asks its diplomatic allies in the General Assembly to petition on its behalf. Instead it seeks participation in the peripheral organizations. This change in approach has provoked some controversy. But the concept of "choosing one's battlefield" is the right one.
Over the past 16 years, Taipei has sought to rejoin the UN by means of high profile political gestures. It has urged its allies in the General Assembly to petition on behalf of Taipei. When Taipei and Beijing arranged their agendas, or when the General Assembly was in session, their allies would speak on their behalf. Other countries would also join the melee. Taipei meanwhile, would hold demonstrations outside the UN. Taipei has long made a mighty ruckus in its effort to gain readmission to the UN. Now that it has suddenly called a halt to such activities, the silence is deafening. Readmission to the United Nations has long been a public aspiration. Once the government says "Stop!" the public is bound to feel disappointed and dissatisfied.

But diplomats have explained clearly that this is merely a change in tactics. We are not forsaking our quest for readmission to the UN. But we are no longer asking diplomatic allies to petition on our behalf. Instead we are seeking a roundabout way to participate in organizations at the periphery of the United Nations. These include the International Civil Aviation Organization (ICAO), the United Nations Framework Convention on Climate Change (UNFCCC), and the International Maritime Organization (IMO). Taipei was successful in its effort to seek observer status in the World Health Organization in May of this year. Clearly it hopes to use this model to join other international organizations.

Choosing one's battles in this manner offers a greater chance of victory. It avoids major battles in which the result is certain defeat and pointless casualties. To determine whether such a change in tactics is cost-effective, one must compare gains and losses.

Taipei's past practice was a frontal assault with a great deal of fanfare. The goal was readmission to the United Nations. The United Nations General Assembly was our stage. The advantage to this approach was that it was easy to attract attention and provoke debate. It prompted the international community to consider Taipei's aspirations, and consider better arrangements on behalf of Taipei in terms of its international status. In terms of initial impact, it was unquestionably an attention grabber.

But this tactic has disadvantages. Given Taipei's lack of international clout, the barriers are simply too high. Beijing has repeatedly checked our moves. It has also contributed to public frustration and anger. It has harmed cross-Strait relations and exacerbated conflict on Taiwan over the issue of reunification vs. independence. It has allowed diplomatic allies to take advantage of us by demanding "endorsement fees." It has squandered hard-earned taxpayer money. Each year, to ensure that a certain number of allies petitioned on our behalf, the Ministry of Foreign Affairs would work itself to death. In terms of return on investment, this was an expensive and brutal tactic, with little chance of victory.

The new tactic is to temporarily avoid the main battlefield. It is to turn instead toward a number of peripheral organizations of practical significance for Taipei. These include the WHO, ICAO, UNFCCC, and other organizations affecting people's lives. If we can participate in these organizations, it will increase cooperation between Taipei and the international community. It will safeguard the interests of citizens of the Republic of China. Through increased interaction, it will make our existence increasingly felt in other countries and international organizations. It can also increase support for our formal acceptance.

Another advantage is that it concentrates our efforts and resources in practical exchanges and cooperation. By contrast, our previous attempts to gain readmission to the UN were nothing more than noisy rituals. The excitement soon died down. The boat would pass, leaving no trace on the water. It would be better to focus attention on a few peripheral organizations of vital interest to Taipei. It would be better to cultivate such exchanges and cooperation. This would give Taipei the opportunity to contribute and become a constructive member of the international community. This would enable Taipei and Beijing to inhabit an atmosphere of relative calm and rationality.

Of course, the new tactic has its risks. Taipei's participation requires Beijing's consent. Participation may involve bargaining. But basically the framework is Beijing's. Does this promote the Republic of China's national dignity, or does it sacrifice its sovereignty? This is a matter of debate. With the passage of time, will Taipei's participation lead to a "sub-sovereign" status? Will it become an obstacle to full sovereignty and dignity? Will Taipei's international space be decided by Beijing? These are matters of concern.

But considering the advantages and disadvantages, we support this new tactic. Because survival, prosperity, and dignity are the Republic of China's most basic national interests. Participation in the UN is merely one means of attaining this goal. The means are optional. To safeguard the Republic of China's legacy of democracy and civilization, we must prolong its survival. Increased international interaction will strengthen and deepen these values. Taipei's power is limited. A more economical use of its resources, and a more pragmatic approach to international exchanges, are to Taipei's advantage.

Of course, even if such a "regional power beseiging the central power" tactic works, the process will be long and arduous. We are bound to suffer setbacks. Our diplomacy must strike a balance between different interests. The new tactic for gaining readmission to the UN offers new opportunities, but also conceals new risks. Those calling the shots must carefully plan their steps. Only then will the new battlefield win new space.

中時電子報 新聞
中國時報  2009.09.22
社論-敲鑼打鼓爭取入聯 絕非務實外交












Monday, September 21, 2009

The Government Must Ensure that Officials Respect Human Rights

The Government Must Ensure that Officials Respect Human Rights
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 21, 2009

A few months ago, a high school heckled President Ma, demanding that he step down. He was taken away by the police for questioning and fingerprinting. Once President Ma learned of the incident, he instructed the National Police Administration to conduct a review. The NPA found that fingerprinting was an old habit with no basis in law. The National Police Administration issued a general order. Beginning on October 1, someone merely giving a statement would no longer be fingerprinted.

Police Academy Vice Chancellor Ye Yu-lan wrote a letter to the editor. He said that people whose identity cards were stolen have found themselves under suspicion of fraud and taken into custody by prosecutors and police. This has added insult to injury. Newly appointed Interior Minister Chiang Yi-hu said he hoped to amend the existing system. In the future suspects may complete their statements where they were initially questioned. Follow up sessions would follow the same procedure.

The above two police agencies are improving their case-handling procedures, consistent with respect for human rights. These may appear to be two different cases, but not if one looks at certain indicators in the government's human rights policy. More importantly, the Ministry of Justice, through the Legislative Yuan, passed the International Covenant on Civil and Political Rights and the International Economic, Social and Cultural Rights Convention. It held a six step "human rights advancement" government personnel training camp. Thousands of central and local government officials will receive training at this camp. On this year's International Human Rights Day, the Executive Yuan is expected to implement two laws. Two years later it will finish amending the laws as part of its comprehensive human rights plans.

On the opening day of the training camp, President Ma gave a personal speech. For half an hour he spoke on the need for the government to take human rights seriously. Only then would the Republic of China's achievements in democracy and the rule of law offer a truly national vision. President Ma pulled no punches. He said most civil servants don't know what human rights are, because our past education made little mention of it. Therefore civil servants must imagine how they would feel if their own human rights were violated. Only then can they feel the peoples' pain. Ma Ying-jeou's speech was sincere. Many of the public servants in the audience paid close attention. But others were yawning, proving that President Ma's observation that civil servants do not attach much importance to the observance of human rights was correct.

Why did President Ma what he did? Because he wanted to promote human rights in the Republic of China, and ensure that they meet international standards. Human rights are also part of his campaign platform. He has a duty to fulfill his campaign promises. Ma Ying-jeou is a student of the law. His long term mission has been the promotion of constitutional liberalism, the rule of law, and human rights. Leave aside his other campaign planks for the moment. The rule of law is his top priority. That is why during his first year he urged the Executive Yuan and the Legislative Yuan to adopt the two conventions and the two Conventions on Law Enforcement. The two Conventions on Law Enforcement are to be amended within two years, as they do not conform with existing laws. This amounts to a human rights report card by which one can evaluate the rule of law and human rights during his four-year term. He must personally stand on the frontline, and cure government officials of their habit of ignorance of human rights, or even hostility towards human rights.

The objective of Ma Ying-jeou's human rights policy is not merely to enhance the Republic of China's international status. It is also to achieve genuine respect for human rights at home. Therefore it deserves our appreciation and support. President Ma is reaffirming that the Republic of China ought to be founded on such core values as human rights. This is a goal that transcends struggles over national identity. It is enough to establish a consensus. But on the other hand, the implementation of human rights on Taiwan is not without obstacles. That's because in the past human rights education was not sufficiently universal. Society lacked an awareness of human rights. Government officials in particular failed to understand human rights. Without an aggressive leadership promoting, demanding, and overseeing human rights, it will not be easy to promote human rights from scratch.

Within a traditional society, the government should set an example about how to think. Government self-criticism can help the community become aware of human rights. Within the Executive branch, the entities most concerned with the protection of human rights are the Ministry of the Interior and the Ministry of Justice. The Ministry of the Interior is in charge of public organizations, public gatherings, and public demonstrations. The police, in turn, are under the jurisdiction of the Ministry of Justice. The duties of prosecutors and the criminal justice system are closely related to the protection of human rights. The key to human rights and the rule of law is the presumption of innocence. Under this presumption, the burden of proof rests with the prosecution. Law enforcement officers often find this concept difficult to grasp. They often unconsciously make the mistake of assuming that the accused must prove his innocence. For example, they demand that all persons subject to interrogation be fingerprinted. Or they assume that anyone whose identity card has been stolen is an accomplice in a confidence game. This causes them to rush to judgment, and to have similar blind spots while handling such cases. Professor Ye Yu-lan has been educating police for years in his capacity as Human Rights Commissioner. Chiang Yi-hua, as former Minister for Research and Examination on the Council for Economic Planning, has chaired the Human Rights Commission. They are familiar with the obstacles and difficulties that lie in the way of President Ma's promotion of human rights. They must move aggressively at the macro level. They must understand the details at the micro level. They must increase respect for human rights. No one else can assume these responsibilities.

The promotion of human rights requires discovering the traps and blind spots in human rights education. Yesterday Premier Wu was being interpolated in the Legislative Yuan. He pointed out that even Chairman Trong Chai, who promoted human rights for many years, was sometimes guilty of mud-slinging. As this telling example showed, the promotion of human rights requires considerable self-examination and effort.

中時電子報 新聞
中國時報  2009.09.21
社論-讓公務員重視人權 政府還得加把勁









Friday, September 18, 2009

Who is Being Used? Ah-Bian, or the DPP?

Who is Being Used? Ah-Bian, or the DPP?
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 18, 2009

For the leader of a democratic nation to be involved in corruption is not news. On Taiwan however, the corruption of former President Chen Shui-bian and his family has left the Democratic Progressive Party in a quagmire, unable to extricate itself. Even more seriously, the DPP has retreated to populism and extremism in a desperate effort to save itself. As a result, two-party politics on Taiwan is headed toward extreme polarization, and the quality of its democracy is in for serious decline. An isolated presidental corruption case has set back the development of democracy. Such a scenario is difficult to imagine in other democratic countries.
The Chen corruption case is unquestionably responsible for the DPP's moral degradation. Before the DPP took office, its bottom line was political ethics came first, the letter of the law came second. Therefore if a party member's conduct was obviously flawed, party discipline took precedence over the law. During the Chen presidency, when evidence of his corruption emerged, this standard was eroded. But at least the DPP still affirmed that legal conviction was the lowest standard for the establishment of guilt.

Unfortunately when the Chen family, its relatives and cronies were indicted and sentenced for a string of major crimes, Chen Shui-bian and the DPP began singing an entirely different tune. Ah-Bian himself said he was guilty only of a "moral and culture crime." He has no criminal liability. Key Green Camp players have blasted the court's verdict as a "feudalistic" moral judgment, and not a legal decision. At this point, not only has the DPP revealed its moral vacuum, it has also twisted the meaning of the law, narrowly defining it as mere courtroom thrusts and parries. It has completely ignored the fact that morality is a cornerstone of the law.

Why can't a political party that bills itself as "democratic" and "progressive" extricate itself from the quagmire of the Chen corruption case? The DPP has plenty of talented people, most of whom have long experience. Why don't they realize they must disassociate themselves from Chen's corruption? Why have they allowed the party to become mired so inextricably in such a predicament? In the social sciences, their dilemma is referred to as a "shared tragedy,"

In his 1968 essay "The Tragedy of the Commons," economist Garrett Hardin observed that as long as property is held in common, it will surely be abused. The DPP's stealing of credit for the closely-related democratic movement is a classic example. A single organization monopolized a shared historical legacy by grossly distorting history.

Hsu Tien-tsai yesterday suggested emulating the Red Shirt Army, and launching a mass movement to support Ah-Bian. His suggestion was mocked as "using Chen Shui-bian." In fact, it would be more accurate to characterize such a ploy as "using the DPP." Long before Hsu Tien-tsai's suggestion, DPP leaders and elected officials were already "using the DPP." Political hopefuls arrived in droves at the detention center to pay homage to Ah-Bian. Either that, or they conspicuously waved placards and banners proclaiming their support for Ah-Bian during protest marches. The "Princes" of the DPP initiated an even higher-level power struggle. Whether one supported Ah-Bian became a bludgeon with which one could defeat one's opponent.

Behind closed doors these DPP key players surely realize that supporting corruption is disadvantageous to the DPP's long-term development. But these DPP key players are caught in a "prisoners dilemma." The DPP's public image is, after all, "common property." It may or may not provide any individual DPP official with any immediate and obvious benefits. On the other hand, as long as DPP officials stand behind Ah-Bian, they immediately receive support from extremist factions within the party. Given long term DPP factional struggles and impending party primaries, this trend is likely to worsen. Since the majority of DPP key players are preoccupied with personal power, the DPP as a whole will inevitably decline, undermining its long-term interests. This is classic case of the contradiction between collective interest and individual interest.

What concerns us is not the interests of the DPP elites. After all, the DPP is not merely the private property of a few hundred thousand party members. It is the result of countless peoples' concerted efforts. It is the result of their blood, sweat, and tears. But because of a party "oligopoly," the ruling DPP has departed from its early pledge of "integrity, diligence, love of the land." President Chen Shui-bian came to treat the DPP as his private property. On the surface his assumption of the party chairmanship was to unite the party and the administration. But in fact it was to turn the DPP into a tool to expand his personal power and to accumulate wealth. The Chen corruption case shows how business consortia exploited Ah-Bian's status as DPP party chairman. Personal bribes to Ah-Bian were passed off as "campaign contributions" to the DPP. The party chairmanship and campaign contributions became plausible pretexts for corruption.

Ah-Bian, his relatives, and his cronies have abused this common property. The countless high and low ranking officials who benefitted along with Chen Shui-bian are hardly going to object to the abuse of the DPP's good name. They are hardly going to object to the debasement of its "progressive" ideals. The damage done to the Republic of China's political culture has been inestimable.

The DPP's "common property" has been defiled. This may not concern the DPP's elites. But any rational political leader must consider the fact that "if one overturns the bird's nest, the eggs will not survive." They must break Chen Shui-bian's spell. They must liberate themselves. It is not that difficult. If DPP officials unite and disassociate themselves from Ah-Bian, the DPP can take its first step toward rebirth. But if the DPP considers only the selfish interests of its elites, then even something so simple becomes utterly impossible.

中時電子報 新聞
中國時報  2009.09.18
社論-扁被消費 還是民進黨被消費










Wednesday, September 16, 2009

Worrisome Finances, Even More Worrisome Ministry of Finance

Worrisome Finances, Even More Worrisome Ministry of Finance
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 16, 2009

Rating agencies such as Fitch and Standard & Poor's have harshly criticized the Republic of China's fiscal and debt situation. In September, the Ministry of Finance, under orders from the Executive Yuan, responded with a great flourish, by offering a "sound financial policy." From a public relations perspective, the program does seems to be boosting morale. It includes ten strategies. It includes three core management strategies to help local governments develop their own financial resources. It includes a three part way to "save money, find money, and make money." We must however point out that the program is a patchwork quilt of confused concepts. It reveals an unwillingness to confront the problem of too low tax rates, or consider long-term changes to the tax structure. Its reveals an even more confused understanding of the nation's tax system.
For years the Republic of China's tax rate has been less than 15%. It is much lower than that of all economically advanced countries. With such a low tax rate, unless the size of the Republic of China government is ultra-small, it must face the dilemma of unsustainable government spending. Not only that, President Ma's campaign platform included "Twelve Love Taiwan Construction Projects." More recently an emergency response to the global economic downturn has necessitated even more public spending. These have left the nation's finances in dire straits. But irresponsible politicians are afraid to face the real problem. They only want to appease voters to protect their jobs. Over the past year, despite the financial crisis, the Ministry of Finance has talked only of tax cuts. Today, the deficit is obvious. Yet the ruling authorities are still playing strategic word games with Three Core Management Strategies and Twelve Love Taiwan Construction Projects. Such obstinacy is truly mind-boggling.

We have good reason for saying that the Ministry of Finance lacks the courage to face the problem. According to Minister of Finance Li, the government's fiscal deficit will be made up through a public offering. Minister Li said that if the government sells 40% of its holdings, it will have no impact on earnings. An IPO will be good for the government and good for the company. Minister Li considers this a "stock certificates for dollar bills" scheme. He has absolutely no understanding of the concept of "public shares." Listening to him makes one skin crawl. If the government's finances require nothing more than tax cuts during normal times, and public offerings during times of crisis, why does the government need a Ministry of Finance? Why bother to teach finance in the universities? Why does the Ma administration need a Tax Reform Commission? The commission has been meeting for over a year. And this is its contribution to the nation's finances? How ironic.

Using shares of stock to earn dividends, or selling shares of stock to raise cash, requires detailed consideration of both the amounts involved and the timing of the transactions. It is hardly as simple as what Minister Lee suggests when he says "selling 40% of the government's shares will have no impact on earnings." The government's chief of finance has no medium to long term planning. He wants to hastily sell 40% of a cash cow. We are simply dumbfounded. Besides, how will selling stock address the problem of excessively low tax rates? Selling our heritage during the second half of the year merely highlights the absurdity of the Ministry of Finance's tax cuts during the first half of the year.

Besides, not all state-owned enterprises should be sold. Some state-owned enterprises have public policy functions. Therefore, the sale of shares will lead to a fundamental conflicts between profit-making private sector share holders and the government. People buy stocks to make money. If private sector shareholders cannot influence government policy, that means their profits are being adversely affected. When this happens, the stock will lose its market value. They will no longer command high prices. If private sector shareholders overwhelm the public offering, that means the government's policy objectives have failed. That means the government's justifications for a public enterprise cannot withstand scrutiny. If the Ministry of Finance must make a public offering of government shares to raise money, and support its policy objectives, then it doesn't understand the reason for public shares. It is hallucinating. It is indulging in unrealistic fantasies.

Take TaiSugar (TSC) for example. In order to meet soil and water conservation policy objectives, the government may at time reforest TaiSugar land. But as readers can imagine, if TSC has private shares, private sector shareholders will oppose it, since reforestation earns not profits. Furthermore, some state-owned enterprises, such as the Taiwan Tobacco and Wine Company, own large numbers of ancient artifacts. Often safeguarding historic artifacts interferes with the pursuit of profits. The hasty sale of public shares, without a sound understanding of the macro-level function of public enterprises, will merely lead to further controversy.

The high-profile political appointees on the political stage bear the greatest responsibility for the Republic of China's current financial difficulties. According to the Executive Yuan, the central government cannot come up with a budget for either next year or the year after. Such an urgent crisis requires people of ability. It requires people of vision to revise the tax plans. It does not require the reckless selling of public shares. Even with companies suitable for sale, killing the cash cow is a one time proposition. In terms of the national deficit, it is merely a drop in the bucket. It will not solve the nation's structural problems. If the Ministry of Finance implements its program, our sovereign rating for next year will not improve. We are concerned about the Republic of China's finances. But we are even more concerned about the mess that the Ministry of Finance refers to as a "sound program."

中時電子報 新聞
中國時報  2009.09.17
社論-我們擔心財政 更擔心財政部








The DPP Should Demand that Chen Shui-bian Cough Up the Money

The DPP Should Demand that Chen Shui-bian Cough Up the Money
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
September 16, 2009

Four members of the Chen family have received heavy sentences and stiff fines. But justice hasn't been done. The court is imposing stiff fines on the Chen family, confiscating Chen family assets, and imposing taxes on the Chen family's undeclared assets. But the court's rulings won't necessarily force the Chen family to cough up its ill-gotten gains.
First, let's clarify the district court's ruling on the money. The court held that Chen Shui-bian must serve a life sentenceand pay a 200 million NT fine. Wu Shu-chen must serve a life sentence and pay a 300 million NT fine. Chen Chih-chung must serve a two years six months sentence and pay a 150 million NT fine. Huang Jui-ching must serve a one year and eight months sentence and pay a 150 million NT fine. The four fines together add up to 850 million NT. Superficially the fine is intimidating, but in fact it's a toothless paper tiger. That's because the court is allowing them to work off their fines. No matter how much they have been fined, the longest any of them will have to work is six months. In other words, if the four of them refuse to cough up the money, each of them will only have to work for six months. They will then be free and clear. Do the math. What's another six months to them? Therefore this 850 million is as good as gone.

The court has imposed stiff fines on the Chen family, confiscated Chen family assets, and levied taxes on the Chen family's illegal income. Among them, Ah-Cheng and her accomplices are liable for 500 million NT. Chen Chih-chung, Huang Juiching is liable for 350 million NT. Together, they must cough up 850 million NT. If the Chen family fails to cough up this sum, the court will seek to recover the funds by liquidating Chen family assets. But according to media reports, the value of Chen family assets on Taiwan does not exceed 500 million NT. That is not enough. Also, before the justice system has a chance to confiscate the Chen family's wealth, it may be transferred. If it is, additional obstacles will arise. Therefore the Chen family knows this part of the game is lost. It is resigned to forfeiting its assets on Taiwan and being done with it. So what if it is fined 850 million NT?

Finally, Huang Jui-ching was given probation, but she must pay 200 million in fines. This is the government's only pressure point on the Chen family. If Huang Jui-ching refuses to cough up 200 million NT, her probation can be revoked. The result would be imprisonment along with Chen Chih-chung. The court allowed one member of the couple to enjoy conditional probation. But if the Chen family is ruthless enough, it may choose to serve the time instead, and this 200 million would be as good gone also.

As we can see, if we really want to recover the Chen family's ill-gotten gains, we must start with the money it has transferred overseas. The quickest way this money can be recovered, is if the Chen family cooperates fully. It must first plead guilty. This will establish the legal status of the funds. The Chen family must complete all procedures and submit all documents required by the justice system of foreign governments or foreign banks. Our own justice system can then use this evidence to recover the money. Of course to convince the Chen family to agreed to this, one must convince all of its members. Based on current observation, the most resistant member appears to be Chen Shui-bian. Chen Shui-bian's obstinacy is a result of the DPP's pusillanimity, together with the mob passions of a small number of Deep Green Ah-Bian supporters. The DPP however, is the key. The Democratic Progressive Party prattles on about procedural matters. It is either unwilling or afraid to confront Chen's corrupt behavior. This gives Chen Shui-bian with room to maneuver. It allows people who don't understand the issue to believe all sorts of lies. Annette Lu said she does not condone corruption, and that the Chen family must apologize. But this is not enough. The DPP must demand that the Chen family plead guilty and cooperate in recovering the embezzled funds. It must demand justice. If the Democratic Progressive Party does this, from top to bottom, Chen Shui-bian will be forced to confront the public. No matter what the DPP might think of the Chen corruption trial, it must demand that Chen Shui-bian return the money it has squirreled overseas. This is the bottom line.

If the Chen family remains obdurate to the bitter end, then the justice system has no choice but to prosecute it to the fullest extent of the law. It will then have to await the third instance court verdict. The court will ascertain that these funds were criminal proceeds. It will then recover them with the help of foreign governments. This will of course take a long time. Many obstacles may arise. For example, the DPP has repeatedly demanded Chen Shui-bian's release, Other Chen family members are not currently in custody. They cannot be forbidden to leave the country indefinitely. If they are, it will lead to political controversy. Once Chen family members are free to travel abroad, who knows what actions they will take while abroad. If they file suit against our justice system from overseas, then recovery of the embezzled funds will become a distant dream.

Imagine one day news stories of the Chen family living in the lap of luxury overseas. How will people feel? Having said that, we must once again condemn former Bureau of Investigation Chief Yeh Sheng-mao. The Egmont Group provided evidence that the Chen family was engaged in money-laundering. This corrupt bureau chief leaked the entire story to Chen Shui-bian. As a result the Chen family swiftly transferred its funds overseas, making it difficult to uncover the truth today. With such a Bureau of Investigation Chief, no wonder justice is so difficult to uphold, and the justice system is in such disrepute.

2009.09.16 03:09 am








Tuesday, September 15, 2009

The Cabinet Must Not Deselect People of Talent

The Cabinet Must Not Deselect People of Talent
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 15, 2009

President Ma and Liu Chao-hsuan's public approval ratings have recovered substantially following the general resignation of the Liu cabinet. The TAIEX soared at the news. Clearly the public approved of the Liu cabinet's decision to assume responsibility for the 8/8 Flood by resigning en masse. But the day after the makeup of the new cabinet was announced, the court handed down its first instance verdict in the Chen corruption case. The public had no time to analyze and comment on the cabinet reshuffling. But the Chen corruption case has now receded from the headlines, and the cabinet reshuffling will have an impact on Taiwan's future. Therefore it is time we subjected it to further review.
Long before the 8/8 Flood, the public had already formed either positive or negative impressions of the Liu cabinet. Some cabinet members had poor public approval ratings. During the recent cabinet reshuffling, these cabinet members were replaced. They include Chen Chao-min, Chen Ching-hsiu, Francisco Ou, and Yin Chi-ming. Some cabinet members had very poor public approval ratings, but have unexpectedly been asked to stay on. Other cabinet members had good public approval ratings. Some of them were even model cabinet members. These include former Education Minister Cheng Jui-cheng and former Chairman of the Council for Economic Planning Chen Tian-chi. Yet for some unexplained reason, they have left. The majority of cabinet members' performance was not bad. They should have remained in office. The aforementioned cabinet reshuffling involved four types of cabinet members. Two types provoked the greatest anxiety. They were "those who should have left, but didn't," and "those who should not have left, but did." These two types were, in effect, deselections." Politically speaking, "deselections" are an extremely undesirable phenomenon. Whenever they occur, we should be alarmed.

Put plainly, deselections are a case of "selecting the bad" combined with "deselecting the good." It includes those who occupy positions of responsibility but do no work, and those whose hearts aren't in their jobs. They end up performing poorly and harming the nation. Many people on Taiwan miss the late President Chiang Ching-kuo because during his term of office he laid the foundations for Taiwan's economic development. This foundation was created by Sun Yun-suan, Li Kuo-ting and other capable and industrious ministers. Sun and Li were willing to dedicate their lives to the nation for two reasons. One, the legislature was not as fierce and crude as it is today. Two, they wielded clearly delegated powers, making it clear what their subordinates had to do. A healthy political culture can attract talented people from near and far. But an unhealthy political culture can result in the "deselection" of people of talent.

Take Chen Tian-chi for example, the cabinet's financial and economic "model student." Much to everyone's regret, he has resigned and returned to National Taiwan University to teach. Rationally speaking, why should he serve as a cabinet official when he can serve as a professor? Why attend endless meetings every day, eating greasy box lunches, sleeping fitfully at night, enduring verbal abuse in the Legislative Yuan, merely for three square meals a day? Such hardships make it difficult to maintain one's ideals. They make one fearful of the bureaucratic jungle. Most importantly, one may be willing to kill oneself in an effort to contribute to the greater good. But the environment will prevent one from accomplishing anything worthwhile. This deep divide between contribution and accomplishment makes serving in a cabinet a life-shortening experience. Accepting a cabinet position is not something a rational and competent economist is inclined to do. The Republic of China government lacks the objective conditions necessary to attract talented people. The only way to retain such people is appeals to idealism. When people who need to be kept on choose to leave, it means they have become bitterly disillusioned. For those in authority, this is definitely a warning sign.

Conversely, when those who ought to leave stay on, that constitutes another public setback, another crisis of confidence. Over the past year, the Blue and Green media, the financial press, domestic scholars and experts and foreign rating agencies, have repeatedly criticized the government's financial plans. They feel the serious public sector budget deficit bodes poorly for the nation's credit rating. Recently published international competitiveness ratings indicate that the Republic of China's ranking has improved. But that is primarily due to the Ma administration's deregulation of cross-Strait policy and gradual liberalization of industry. These are unrelated to the budget deficit. In terms of practical policy, the disaster relief efforts of the Ministry of Finance and the Department of Defense were roughly equal. But the result was Chen Chao-min stepped down, while Li Shu-teh stayed on.

The current cabinet reshuffling resulted in many cabinet members who should have departed staying on, and many cabinet members who should have stayed on, departing. The frustration felt by these cabinet members is of lesser importance. Of greater importance is public concern over the determination of Taiwan's financial and economic policies. In fact, the vast majority of the public has no personal relationship with the president, cabinet members, or other high-ranking officials. Who is in and who is out, who will stay and who will leave, makes no difference to them personally, All they know is how they feel about the administration. This may sound abstract, but at election time their feelings will be translated into votes. If qualified financial and economic experts desert the administration, many people may feel let down. For President Ma the most serious concern may be the loss of votes. To bring down the Republic of China's finances may take two or three years. But to leave people frustrated and disappointed about the economic outlook, will take no time at all.

中時電子報 新聞
中國時報  2009.09.15






這一次內閣改組,許多人對於若干閣員「該走的沒走、不該走的卻走了」感到挫折。但對情緒挫折還算事小,重要的是,民眾也對於決定台灣財經政策的領導格局感到憂心。其實,對絕大多數人民而言,他們與總統或閣員等大官是沒有什麼交情的。誰上誰下、誰去誰留,都沒有什麼個人感情考量,唯一有的,就只是那難以名狀的「感覺」。這感覺雖說有些抽象,但在選舉時卻會轉換為具體的選票。財經人才留不住,許多人感到失望。但是對馬總統而言,也許更需要擔心的,是可能失去的「票」。 要把台灣的財政拖垮,可能還得要兩、三年的光陰,但要讓人民對經濟前景挫折失望,那卻是可以立竿見影的。

Monday, September 14, 2009

Taiwan's Society and Culture Have Never Condoned Corruption

Taiwan's Society and Culture Have Never Condoned Corruption
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 14, 2009

Former President Chen Shui-bian is once again teaching us something new. He's teaching us the meaning of "social and cultural crimes." The law books contain no such term. Nevertheless Chen Shui-bian's neologism has attracted wide attention. Chen Shui-bian admits what he did was wrong. But he insists that his wrongdoing was a widespread social and cultural phenomenon. Everybody does it, therefore it was no big deal. Besides, if one insists on punishing offenders, Chen argues, then he is hardly the only one guilty of such offenses.
Chen Shui-bian is adept at inventing new terms. He is even more adept at sensing the public mood. He is attempting to create an escape clause for himself. Ever since the Chen corruption case broke, he and his family have astonished the public with their creativity. Every time the evidence proved they were guilty of a crime, they would then confess to that crime, and that crime only. Chen Shui-bian's shrewdest tactic of course, is equivocation. In other words, "We are all guilty." His strategy is to apologize, but never admit wrongdoing. His strategy is to admit wrongdoing, but never admit guilt. His strategy is to admit guilt, but always drag someone else down with him.

When investigators from the prosecutor's office discovered that the Chen family definitely transferred funds overseas, Chen Shui-bian immediately admitted that he "did things not permitted by the law." Chen Shui-bian is a linguistic magician. He is a master of psychology. Sometimes his words must be subjected to textual analysis. At other times they must be be read as metaphor. That's because he is adept at word games. If someone "does something not permitted by the law," did he do something illegal? Did he do something wrong? He chooses not to say. The ambiguities he has created during his prosecution have increasingly become the focus of attention. He and his family have constantly been sending out political feelers and monitoring the public mood, hoping to evade prosecution.

The Chen Shui-bian family has chosen to drag its feet when confronting the justice system. But the evidence has snowballed. The Chen family preyed upon business people without regard for their political affiliation. Whether they were Blue or Green made no difference. The Chen family was an equal opportunity extortionist. Deep Blue businesses were swallowed up the way a lion devours his kill. The scale of the Chen family's money-laundering and corruption was massive. Naturally it risked something going awry. When more and more evidence of Chen family crimes surfaced, Chen Shui-bian belatedly conceded that "Everyone does it. I'm no worse than anyone else." He deliberately conflated the distinction between the State Confidential Affairs Fund and the Discretionary Fund. He has attempted to twist the meaning of President Ma Ying-jeou's Big Reservoir Theory. He has attempted to rationalize his own crime and simultaneously take the offensive. His moves are generating considerable controversy.

The logic of the term "social and cultural crime" in this context is quite simple. Even though we took other people's money, we did so reluctantly. We took it because it was the custom. Had we refused to accept money-filled "hong bao" and gifts, it would have been considered impolite. By extension, Chen Shui-bian alleges that the State Confidential Expense Fund was merely a supplement to the president's salary. He even alleges that due to his official position, his identity, and his status, that the receipt of gifts, benefits, and even cash was perfectly proper, that given social and cultural norms, no crime was committed. Those who feel Chen Shui-bian did something wrong, must examine our society and our culture for their complicity in corruption. Otherwise if they wish to convict Chen Shui-bian, they must also convict a whole slew of past officials as well.

First Chen argued, "Was Ah-Bian really wrong?" Then Chen argued "Was Ah-Bian the only one who did wrong?" Chen Shui-bian is undeniably a shrewd political operator. Is "accepting bribes commonplace" on Taiwan today? Is "refusing to accept bribes impolite?" If it is, then why have hospitals repeatedly ordered medical personnel not to accept gifts of cash from patients and their families? Why bother with anti-corruption legislation? After all, accepting bribes is the social custom. Is society on Taiwan really this backward? The Chen family's selling of official positions and accepting of bribes was not something that took place in the remote past, when the public was confused and the law was unclear. It was something that happened recently. The Republic of China has been on the road to democracy and the rule of law for a long time. Yet Chen Shui-bian is alleging, without blushing or stammering, that gifts of cash are perfectly normal. That anyone could seriously argue that corruption was worse during the KMT era, therefore it is unfair to prosecute Chen Shui-bian today, boggles the mind. Why don't the people who advance such arguments simply say that He Sheng was vastly more corrupt, and that by contrast Chen Shui-bian's corruption is small potatoes?

Society's concept of justice advances with the times. Current laws must reflect current standards. Past offenses must be prosecuted to the fullest extent of the law possible. One cannot use "People used to commit worse crimes" as a means of eluding prosecution for crimes committed today. Otherwise, every era will be forced to endure criminal conduct. Wrongdoers will simply argue "After all, wasn't this the way in the past?" Citing past reprobates to justify wrongdoing by current reprobates is just a little too convenient. Under such circumstances, would a nation still need the rule of law? Would social progress still be possible?

Taiwan has been struggling to rid itself of the negative custom of cash bribes and the culture of bribery. Such efforts may be inadequate. They may not have achieved the desired results. But the civil service system must strive for integrity. Today's society no longer permits abusing one's official position to enrich oneself. Chen Shui-bian's family and friends are guilty of corruption. They have been convicted and handed stiff sentences. Do we really intend to write off their corruption as nothing more than a product of our society and our culture?

中時電子報 新聞
中國時報  2009.09.14
社論-台灣的社會文化 從未縱容過貪汙