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Key Economic Data 
 
  2003 2002 2001 Ranking(2002)
GDP
Millions of US $  406,000    
         
GNI per capita
 US $ 18,000
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 039 - (29/05/07)

The die is cast-at least insofar as the 2008 presidential election is concerned. The contest next March in what may well be the most important presidential election for Taiwan to date (direct elections only begun on 1995 and the 2008 election will be the fourth) will be between former Premier Frank Hsieh, representing the Democratic progressive Party (and more broadly the "Pan-Green alliance) and former Taipei mayor Ma Ying-jeou representing the Kuomintang and the Pan Blues.

Former Chinese Nationalist Party (KMT) chairman Ma Ying-jeou was nominated as his party's presidential candidate on 2nd May in a one-horse race and announced immediately that he would invite Legislative Speaker Wang Jin-pyng to be his running mate. He also presented his campaign platform on the economy, pledging to raise the country's economic growth rate to 6 percent and the average income per person to US$20,000 by 2011. Ma also proposed the establishment of a "construction fund" for local governments, which would be funded by taxpayers and said that he would raise the subsidy for elderly farmers if elected.

On cross-strait issues, Ma said Taiwan should push for the normalization of economic and trade relations under the principles of "prioritising Taiwan and benefiting Taiwanese." He said the government should loosen cross-strait economic regulations, but that Taiwanese companies should ensure their roots remain at home.

If elected president, Mr. Ma said, he would push for more Chinese tourists to be allowed to visit Taiwan. He said it would be his goal for 3 million Chinese to visit Taiwan each year within four years, generating NT$100 billion in revenue.

There were four candidates within the DPP aspiring for a chance to be nominated as candidate for the presidential race. In a display of democratic idealism meant to stand in stark contrast to the KMT primary, the DPP version was supposed to have been a two part affair with the final choice being made on the basis of firstly a vote among the party faithful followed by a nationwide telephone poll in the second part. 

In that first phase, Mr. Hsieh came first in 17 out of 24 cities and counties across Taiwan, gaining a large and immediate advantage over his rivals Premier Su Tseng-chang, DPP Chairman Yu Shyi-kun and Vice President Annette Lu. With such a clear-cut victory by Hsieh, the other three announced they would drop out of the race thereby negating any reason to hold a wider poll.

Mr. Hsieh is a safe choice. He is well liked and is a pragmatist. Hsieh's experience as Kaohsiung mayor, where he presided over a period of solid development for the city, will serve him in good stead as it helped him gain a reputation as a good administrator and a politician who gets things done. Born in 1946, he obtained law degrees from Taiwan National University and philosophy degrees from Kyoto University in Japan. He was the Mayor of Kaohsiung from 1998-2005 when he stepped down and became Premier, resigning that position in January of last year.

He is known for his pragmatic approach to cross-strait relations and this may also boost his chances, as Taiwanese have time and again shown they prefer maintaining the "status quo" when it comes to relations with China. Indeed a recent poll shows support for cross-straits ties among the general population ebbing away in recent times.

According to one newspaper commentary, Mr. Hsieh's practical, bide-your-time attitude to ties with Beijing will give more cautious voters a credible alternative to Ma's embrace-China-at-all-costs approach.

The only cloud hanging over a Hsieh candidacy is the corruption allegations related to the Kaohsiung MRT system during his stint as mayor. These allegations resurfaced during the primary and could cause Hsieh problems because the opposition is likely to bring them up during the presidential campaign. Nevertheless Mr. Ma is facing similar allegations over irregularities during his stint as Taipei mayor and the net result may well be that these factors will end up cancelling each other out.

There is probably little difference between the two candidates when it comes to economic policies and much as Mr. Ma would like to portray himself as the one who can lift Taiwan out of the doldrums, the fact is that the economy continues to do remarkably well.

Where clear differences exist, these are principally on ethnicity-Mr. Hsieh is a native-born Taiwanese in contrast to Mr. Ma who was born in Hong Kong and who has never sought to hide his pro-China sympathies. Related to this issue is that of policy and attitudes towards the mainland where Mr. Ma could be expected to move more rapidly towards normalization of relations-something that would probably be welcomed by Taiwan's business community but not necessarily the population as a whole who seem to prefer retention of the status quo.

Analysts point out that Mr. Hsieh's choice for vice president could be vital to garnering the widest possible support. Newspaper reports from Taipei suggest he may select former acting Kaohsiung mayor Yeh Chu-lan as his running mate. This could be a pragmatic move for a number of reasons. First, she is a female and the DPP is rather big on the issue of gender equality; secondly Yeh is a Hakka and her presence on the ticket could help the DPP secure at least some votes from a bloc that in the past has leant towards the KMT. Finally, Ms. Yeh is the wife of the late Deng Nan-jung, the former editor-in-chief of (the now defunct) Freedom Era Weekly who immolated himself in April 1989 after being charged with sedition and in protest at the KMT's censorship of the media. Last month the commemoration of his death was widely reported in the media and the presence of his wife in the DPP ticket would serve to galvanize democracy activists and especially the pro-independence vote. The sufferings of many Taiwanese under martial law is a spectre that continues to haunt the KMT.

The Hsieh victory came as a surprise to many. Premier Su was seen by many as the favourite in the DPP presidential primary, but after being defeated by Hsieh in the initial vote, he-along with the others- decided to pull out before the second-stage telephone poll . He then announced he was resigning as Premier. Speculation has been rife as to the motive in resigning the premiership although analysts point out that with the decision over the presidential candidate becoming a fait-accompli, it may have been a pragmatic gesture to put aside the factional infighting of the recent past in order to make way for a new Hsieh-friendly Cabinet.

All 87 Cabinet members resigned together with Su thereby providing an opportunity for a total revamp although many incumbents are expected to be reappointed. Straits Exchange Foundation (SEF) Chairman Chang Chun-hsiung was named as premier by President Chen Shui-bian for the second time. He served briefly as Premier in the early days of the Chen presidency becoming premier from October 2000 to February 2001.

With the Pan-Blue alliance already threatening further political mayhem to take advantage of the situation, the veteran politician is well placed to push through key government bills and avoid an impasse in the legislature.

According to a statement from the Presidential Office, Chen Chin-Jun would be the new secretary-general of the Executive Yuan and Democratic Progressive Party Legislator Lu Tien-Lin would become the new chairman of the Council of Labour Affairs.

Minister of Finance Ho Chih-chin, Minister of Economic Affairs Steve Chen, Council of Economic Planning and Development Chairwoman Ho Mei-yueh, Minister of Transportation and Communications Tsai Duei and Public Construction Commission Chairman Wu Tze-cheng would remain in their positions. The decision to keep the economic and financial team intact reflects the government's decision to maintain policy continuity and market stability and continue the economy on its present growth path ahead of the election season.

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