Tuesday, September 30, 2014

How Can the DPP Change Its Anti-Business Image

How Can the DPP Change Its Anti-Business Image
China Times editorial (Taipei, Taiwan, ROC)
A Translation
October 1, 2014

Executive Summary: Given the political reality, the KMT should announce that the STA has been temporarily shelved. It can be left until negotiations over the MTA have been concluded. The ruling and opposition parties can then conduct negotiations. The DPP totally repudiated the KMT's Fiscal Policy Act. It must change its attitude. The DPP must take concrete actions to change its anti-business public image.

Full Text Below:

The pressure on President Ma must be enormous. A student hurled a book at him, hitting him. The Beijing authorities are again pressuring him to endorse one country, two systems. Former Minister of Economic Affairs Yin Chi-min recently published an article in the China Times, asking "Is anyone still willing to step forward and defend the Ma government?" In the dead of night, President Ma has to be feeling the pain.

Tsai Ing-wen is also having a hard time. She is clearly concerned about the DPP's public image. She wants to the DPP legislative caucus to establish an ad hoc group for fiscal affairs. She has proposed a fiscal bill to "enrich the nation and benefit the people." She hopes to reverse the party's anti-business image, as groundwork for a return to power in 2016.

Tsai Ing-wen has established short, medium, and long-term development strategies. In the short term the DPP will wrangle over fiscal policy matters in the Legislative Yuan. In the medium term the DPP will propose a Financial Industry Act and related policy proposals. In the long term, she will use the "Citizens Economic Conference" to propose a new model for economic development. She hopes this will enable the DPP to become a quasi-ruling party. 

Tsai Ing-wen's declaration shines a spotlight on the DPP's Achilles Heel. The party is deeply distrusted by the business sector. Tsai Ing-wen is hoping to remedy this. The KMT has long enjoyed good relations with the business community. But during President Ma's second term, the government's direction on the petrochemical industry development, policy on energy , and particularly policy on nuclear power, as well as the minimum wage, have deeply alienated the business community.

Faced with current economic difficulties, both parties must offer something in the way of fiscal policy and legislation.

The DPP has long trumpeted its concern for the interests of labor, farmers, SMEs, and other disadvantaged segments of society. It has long evinced a socialistic flavor. During the 2012 presidential election, Tsai Ing-wen raised the banner of "fairness and justice." This underscored the DPP's solidarity with disadvantaged segments of society. But in a pluralistic society, championing fairness and justice, and attending to the interests of disadvantaged segments of society, are not necessarily the same as being "anti-business." The DPP is widely regarded as anti-business for two reasons. One. It lacks any robust arguments or proposals on fiscal policy. Two. It maintains to an "oppose anything having to do with [Mainland] China" closed door stance on cross-Strait economic and trade policy. During the Chen era it cavalierly halted construction on the Fourth Nuclear Power Plant. It flip-flopped repeatedly on construction of the Number Eight Naphtha Cracking Plant. It stubbornly blocked passage of ECFA (cross-Strait economic cooperation framework agreement). It even obstructed review of the recent STA (cross-Strait trade in services agreement) and FEPZ (special regulations for the free economic pilot zones). These reveal the degree to which the DPP ignores the voice of the business community. It was inevitable that it would be seen as anti-business.

By contrast, during the KMT's long rule on Taiwan, it has enjoyed close relations with the industrial and business sector, relations that the DPP cannot hope to match. Couple this with farsighted fiscal policy during its rule, including Yin Chung-jung, Li Kuo-ting, Chao Yao-tung in the early years, to Vincent Siew, Chiang Pin-kung and other fiscal experts during later years. All in an unbroken succession. It earned the business community's trust and affirmation. As a result the general public has the impression that the KMT is more adept than the DPP at promoting economic prosperity. But once President Ma was re-elected, he attempted to practice his own brand of "fairness and justice." With the worst possible timing, he introduced in rapid succession, the capital gains tax, gasoline price and electricity rate hikes, and other unpopular policies. This undermined trust between the government and the business sector. Add to this the impact of the Ma Wang rivalry and the Sunflower Student Movement. The Ma government's cross-Strait policy has been staunchly affirmed by the business community. But its inability to implement its policies due to Legislative Yuan obstruction has saddled it with an image of incompetence. This too, has deepened the alienation between the Ma government and the business community. The KMT's long-term advantages in fiscal policy have also been rapidly eroded.

Tsai Ing-wen is eager to reverse the DPP's anti-business image. She has proposed a "new model of economic development for Taiwan." She is attempting to change the DPP's image as a party inept at fiscal policy. Her "new model" includes three points. One. Economic growth is not limited to GDP. It must also factor in employment, wages, income distribution, regional balance, generational justice, quality of life, and environmental protection. Two. She hopes to change the "Taiwan takes the orders, then manufactures the product overseas" growth model. She hopes to transform the industrial structure. Three. The economic decision-making model should be "bottom-up" and require a social consensus.

The above rhetoric sounds oh so pretty. The direction is admittedly correct. But where are the specifics? Where is the road map? A policy without beef is no policy, merely a slogan. Her rhetoric provoked renewed criticism that Tsai was "water spinach" (a vegetable with hollow stems, hence one lacking substance). To escape criticism, she must present a clear and workable policy, along with a specific blueprint for public scrutiny.

The DPP may be able to change public perception. It must accelerate deliberation and offer a "new model of economic development for Taiwan" in the Legislative Yuan. This would definitely help the DPP change is anti-business image. Important fiscal policy bills have been stalled in the Legislative Yuan, unable to pass. Policy cannot be implemented. The KMT's image has been seriously undermined. The KMT must make compromises to breakthrough the legislative deadlock.

The "special regulations for the free economic pilot zones" are actually aimed at promoting industrial restructuring. It is consistent with the DPP's "new model" concept. The DPP should accelerate its proposed amendments to the law, and participate in advance consultations. The two major parties' legislative caucuses have undergone personnel changes. The "Cross-Strait Agreement Oversight Regulations" bill should be reviewed as soon as possible. As long as the ruling and opposition parties do not dig in their heels, a compromise should be possible. As for the controversies over STA (cross-Strait agreement on trade in services) and MTA (cross-Strait agreemento on trade in merchandise), the Mainland has explicitly rejected restarting negotiations. For the moment, all we can do is put the matter on hold. We can proceed later at the current pace. But the consultation process must be totally transparent. We must be in continuous communication with the relevant industries.

Given the political reality, the KMT should announce that the STA has been temporarily shelved. It can be left until negotiations over the MTA have been concluded. The ruling and opposition parties can then conduct negotiations. The DPP totally repudiated the KMT's Fiscal Policy Act. It must change its attitude. The DPP must take concrete actions to change its anti-business public image.

2014年10月01日 04:09













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