Can Chen Shui Bian Save Taiwan's Future?

Commentary

By George Koo, Pacific News Service

Chen Shui Bian barely won the controversial election in Taiwan, and is now facing a country beset with problems, among them a shrinking economy and an angry China. All the while, demands for a recount continue.

March 23, 2004 - Out of nearly 13 million votes cast for the next president of Taiwan, incumbent Chen Shui Bian squeaked through with a margin of less than 30,000 votes. Some would consider this nothing short of miraculous, since only a year ago Chen was as much as 25 percentage points behind his opponent in the polls.

While attention has focused on his narrow victory after an assassination attempt that many suspect to have been staged, little notice has been paid to the failure of Chen's controversial referendum on Taiwan's relationship with China.

During the campaigning, Chen had declared that winning the election without carrying the referendum was meaningless. The failed referendum -- to beef up missile defense against China -- is seen as failure of Chen's advocacy for Taiwan's independence.

What will Chen do now?

First, he will have to overcome the hostility of a large segment of the population still resentful of the manner he prevailed. Next, he will have to address the economic problems confronting Taiwan.

Chen has proven to be an extremely wily and articulate politician. Given time, he should be able to charm many of his enemies into accepting his well-meaning but perhaps disguised intentions.

But dealing effectively with Taiwan's economy is another matter. During his first term of office, Taiwan's unemployment rate increased from 2.9 percent to 5 percent, and per capita gross domestic product not only did not grow but actually shrank by more than 3 percent.

To reverse the downward economic trend, Chen will have to deal with Beijing, by far Taiwan's most important economic partner. According to his own government statistics, over 60,000 Taiwan businesses have made investments in China.

By establishing direct transportation linkages instead of indirect routes via third parties such as Hong Kong, Taiwan businesses would save close to $1.5 billion annually in air transportation costs and $860 million in ocean shipping costs.

A think tank in Taiwan anticipates a conservative boost of $600 million a year to Taiwan's economy if Taiwan opens to tourists from the mainland.

To affect these economic remedies, Chen will have to reach out to Beijing. Since he has no more re-election pressures, Chen is in the position to make these needed moves.

However, leaders in Beijing are wary of Chen's past maneuvers and deceptions, and simply do not trust him. To establish rapprochement with Beijing in his second term of office will be a formidable challenge.

In the meantime, Chen's opponent, Lien Chan, accused Chen of cheating, asked for annulment of this election and demanded a recount. Chen has ceded to the demands, but he has much to answer for. Some 330,000 ballots were disqualified, more than 11 times the winning margin. This is between three to five times higher than ballot disqualifications in past elections.

Lien also accused Chen of staging an assassination attempt on his own life, a classic Chinese strategy called kurouji, which loosely translates as deception via self-inflicted wounds. The alleged assassination attempt occurred the day before voters went to the polls.

The apparent shooting allowed Chen to call a national security alert and activated some 200,000 military and police personnel, taking them out of the voting process. Taiwan's military is known to support the opposing Nationalist party.

Now that Chen is the apparent winner, though pressure for a recount continues in parliament, the hawks in Beijing are reportedly becoming impatient and pressuring China's moderate leadership to take military action. If the hawks should ever prevail, the resulting conflict across the strait will be tragic, not only for China and Taiwan but most likely for the United States and neighboring Asian nations.

Taiwan's latest controversial exercise in democracy is destabilizing Taiwan and raising the temperature across the straits. It is too early to tell how the tension will be resolved.

PNS contributor George Koo is an international business consultant and regular visitor to Taiwan and China.