International Herald Tribune
What's next for Taiwan?
Monday, January 14, 2008

HONG KONG: The triumph of the China-friendly Nationalist Party, or Kuomintang, in Saturday's legislative election in Taiwan was so complete that it is easy to read too much into it.

Foreign attention is, naturally, on the cross-strait implications of the result. But the voters' motives in rejecting the pro-independence Democratic Progressive Party were more complex than simply a verdict on relations with China.

Although the result points clearly to the victory of the KMT candidate, Ma Ying-jeou, in the presidential election expected in March, there is no certainty. The outcome of that election, which pits the Democratic Progressive Party's Frank Hsieh against Ma, will be a lot closer than the polling on Saturday, when the KMT won 51 percent of the vote against the DPP's 37 percent and collected 81 of the 113 seats in the legislature.

The DPP would likely benefit if turnout rises from 58 percent in this election toward the near 80 percent seen in the 2004 presidential poll.

The DPP's collapse must be attributed in the first place to the unpopularity of President Chen Shui-bian and those around him who have been dogged by substantive allegations, some proven, of corruption. The party has also become more riven by factionalism than ever.

Chen tried to divert attention from his own failings by devising a number of ploys to make Taiwanese identity the main focus of the political debate. This appealed to a segment of his party but not to those voters in the middle ground of Taiwan politics, where elections are won and lost.

To make matters worse, Chen even succeeded in falling out publicly with a U.S. administration that is a natural Taiwan backer.

Chen's game plan seemed to many voters to be a fruitless diversion from the economic and social issues facing the government. There is a perception that the economy has been performing poorly due to the Chen government's neglect of economic issues. In reality, that is a half truth.

The economy has been growing persistently at 4 to 5 percent, not a bad outcome given its already high level of development and the very low population growth. But it could undoubtedly have grown faster if the government had been more focused on freeing up the domestic-services sector, ending some restrictions on mainland trade and investment, and had been able to push financial-sector and other reform legislation through a KMT dominated legislature.

Having humiliated Chen and his version of the DPP, the voters will now have to decide whether Hsieh is sufficiently different to be given power. And whether it is best to keep a balance by having a DPP president as counterweight to a legislature in which the KMT now has a two-thirds majority, or to increase the chances of effective and harmonious government that could flow from one party controlling the executive and legislature. The past eight years of a DPP president and opposition-controlled legislature have led to incessant bickering and little action.

Hsieh is viewed as much more pragmatic than Chen on mainland issues and therefore able to appeal to the middle ground lost by Chen. On the other hand, Ma, who is of mainland descent, has been careful not to stray too far in the direction of cozying up to Beijing as some of the mainland-born KMT stalwarts have been prone to do, in the process raising hackles among mainstream Taiwanese.

A KMT administration would certainly increase the likelihood of closer mainland links. It would find a response from President Hu Jintao, who has been careful to offer more carrots than sticks, knowing that the mainland's economic growth is a magnet for Taiwanese business, and for voters who believe Taiwan is missing economic opportunities. However, suspicions of Beijing go deep and voters may be as unwilling to countenance kowtowing any more than they have been ready to go along with Chen's efforts to bait the mainland into making threats that would anger Taiwanese.

Even under a KMT administration, progress on cross-strait relations is unlikely to be swift as Beijing looks for commitment to the One China principle in return for the benefits of freer flows of people and money.

Important, too, will be whether a much smaller legislature (its predecessor had 225 seats) will be less prone to influence by vested business interests, some of them decidedly unsavory.

It also remains to be seen whether the KMT, which still has strong links to protectionist forces, has the will to free up the domestic sector of the economy, which remains uncompetitive even as Taiwanese technology continues to lead the world. While the manufacturers have global horizons, Taiwan's political leadership, on both sides, has been insular and defensive. Whoever is in power, commercial relevance as well as a lively democracy are Taiwan's best defenses against unwilling unification with a China that is as foreign to most Taiwanese as Britain is to Americans.