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

Books on Taiwan

Update No: 098 - (26/07/12)

The hand across the sea
With the next presidential election less than six months away, the ruling KMT party has come to realize that its hold on power is tenuous. While continually trumpeting the advantages of its closer economic relationship with China and claiming that this will bring significant economic benefit to Taiwan, the public-at-large remains unconvinced. Recent polls have President Ma Ying-jeou and his DPP presidential opponent Tsai Ing-wen running neck and neck. Unemployment is again up; jobs are still being lost to China; exports are slowing; the wealth gap is widening and, so far, the new relationship has not resulted in any greater breathing space for Taiwan in the international arena.

The upcoming election to be held on January 14 is likely to be a de facto referendum on Taiwan’s relationship with China, and with a new power elite due to take office next year in Beijing, China’s present leadership does not want to see any backsliding on its carefully-laid plan to draw Taiwan into the fold of reunification. A loss by the KMT is unthinkable in the minds of Beijing’s elite. Behind the scenes China is believed to be manoeuvring hard to ensure there is no changing of the guard in Taipei.

But the latest move in the twists and turns of local politics caught many by surprise.

Not content with a sham trial incarcerating former President Chen Shui-bian last year for alleged misdeeds during his presidency; the ruling KMT Party has now set its sights on Chen’s predecessor, octogenarian Lee Teng-hui, former KMT Chair and President of the Republic of China from 1988—2000.

On July 1, 12 years after he handed over the presidency to Chen Shui-bian, Lee was indicted by the Supreme Prosecutor’s Office on corruption charges. It is alleged that he ‘embezzled’ US$7.8 million in ‘secret diplomatic funds’ and channelled them to a private research foundation that later, of which after leaving office, he became chairman. There is no suggestion that he pocketed any of the money himself.

Lee assumed the presidency in 1988 upon the death of Chiang Ching-kuo and became the first democratically-elected president in 1995. He is a native Taiwanese, educated in Japan during the colonial period and became Chiang’s vice president in 1984 under the latter’s localization policy. During his presidency he strengthened the localization movement and under his leadership steered Taiwan away from its authoritarian path, towards that of a genuine multi-party democracy.

To most Taiwanese he is a respected elder statesman and affectionately known as the ‘father of Taiwan’s democracy’. To China, however, he is a reviled figure referred to as ‘the scum of the nation’ for his pro-Taiwan and pro-independence views.

The KMT has long been beset by internal factionalism especially between the hard-line and conservative ‘pro-mainland’ faction who wanted to keep control of both party and government away from native Taiwanese and those that favoured liberalisation and localisation. Throughout Lee’s presidency, the hardliners or waisheng ren, remained opposed to his reform program and in 2001, following the KMT’s electoral defeat in the 2000 presidential election, Lee was expelled from the party. Although never openly supporting DPP candidate Chen Shui-bian for the presidency, he was rumoured to be a closet supporter of Chen and, following his expulsion from the KMT, became the ‘spiritual head’ of the pro-independence Taiwan Solidarity Union (TSU).

Lee’s indictment has caused a local furore with claims by many that it was a further example of political retribution being meted out by President Ma Ying-jeou and that Ma was using the judiciary for political ends. Ma of course has denied this and counter-claimed that it is merely a consequence of the judicial reform process underway which should be left to root out corruption wherever it is found.

While agreeing with the sentiment, commentators have noted that so far only opposition and pro-independence politicians have been targeted in this anti-corruption campaign. Furthermore, the antagonism between Lee and Ma is a matter of public record; the indictment came only days after Lee’s latest public criticism of Ma Ying-jeou’s pro-China politics.

Others have pointed to the fact that the indictment came days after Prosecutor-General Huang Shyh-ming returned from a visit to China and they see in this latest move, the hand of Beijing reaching out to exact revenge and discredit another on its hate list. The extension of this argument is that pro-Taiwanese politicians will be shown to be corrupt; that this will dissuade voters in the upcoming election and deliver more votes to the pro-China KMT candidates.

The logic is convoluted to say the least. In an effort to debunk Lee’s pro-democracy credentials, Premier Wu Den-yih appeared on national television alleging that corruption and gangsterism first became a problem during Lee’s administration and that he [Lee] had placed a burden on Taiwan’s further development. Wu’s argument is easily dismissed. In fact, it was Lee who initiated Taiwan’s anti-corruption drive by exposing the nexus between local politicians and gangsters coining the term ‘black gold’ to describe the problem. Lee did not create ‘black gold’ he merely gave it a name.

Lee, of course, has denied the charges against him and, as already noted, there is no suggestion that he pocketed any state funds for himself. If anything, Lee is a victim of circumstance. Given Taiwan’s unique geopolitical situation, secret funds abound and are used, at presidential discretion, and for a variety of purposes. These funds were established during the era of the Chiangs – Chiang Kai-shek and his son Chiang Ching-kuo – and have continued to be used to the present time.

How far is Ma Ying-jeou prepared to go to protect his presidency and his thrust towards eventual reunification with China? Admittedly, even Ma believes that unification will come about later rather than sooner but whatever time frame is chosen, he and his administration appear to be intent on ensuring that those of a pro-independence mindset are ground into the dust. China of course, wants to bring about reunification at the earliest time possible and it seems there are many within the KMT who are prepared to do China’s bidding and damn the consequences.

But there will be an election in January and few believe it a coincidence that the present pro-Beijing government has sought to discredit both of Taiwan’s former democratically-elected presidents, both ardent democrats and both vehemently opposed to Taiwan’s forced annexation to China.

Even many KMT politicians are reported to be uncomfortable at the turn of developments. Can anybody blame them?

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