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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: 050 - (28/03/08)

Ma Ying-jeou wins a decisive victory
Kuomintang presidential aspirant, Ma Yin-jeou, has won a decisive victory (58 percent to 42 percent of votes) in Taiwan's presidential election. With a clear majority in the legislature, the reins of power-the presidency, cabinet and legislative body-are now in the hands of a single party for the first time in eight years. Seeking to allay fears that the return of the KMT would result in a retreat of the democratic gains of the past, Ma has promised to run an inclusive government that will include both figures allied to the opposition as well as special interest and minority groups. Probably, with the people of Taiwan now used to free and (reasonably) fair elections, it will not be easy to rollback the gains, although some will no doubt try.

It was an election that the DPP lost rather than one that the KMT won. As commentators pointed out the 60-40 split this time around mirrored the result of the pan blue/pan green contest of 2000 (but then the pan blues were split by fielding two candidates). In 2004 it was more of a 50-50 split of votes. This means that the extra 10 percent picked up by the DPP in the last election was lost to them this time. Corruption was a major cause. While holding out the promise of clean government, the DPP was as much wracked by scandal as the KMT before it. Lack of political progress with China was possibly another cause and especially the manner in which President Chen Shui-bian and his cohorts overplayed the "Taiwan factor" causing a downturn in Taiwan's important and strategic relationship with the United States. In previous elections to incur the wrath of China produced a positive response from the electorate; but the wrath of Washington was an entirely different matter.

There will no doubt be a good deal of soul-searching within the Opposition and this will likely mean the end of Frank Hsieh's political career. If that happens he will be a loss to the political scene because he is one of the more pragmatic figures within the present DPP leadership; but on a positive note, it may hasten a search for the next generation of leaders that can carry the Party forward. The end result may be an invigorated party.

Mr. Ma will be seeking to mend fences with China which remained suspicious of DPP intentions throughout its eight years of governance. But while some softening can be expected-and perhaps at last an opening of direct communication links-it will not be easy sailing. In reality the DPP and KMT positions vis--vis China are not that far apart. Certainly, with the KMT back in power, communications channels may open more readily but how to manage the political relationship without acceding to China's "one-China" principle and compromising Taiwan's own sovereignty may prove a tough challenge.

More likely we may see a quick improvement of Taiwan's relations with the United States and, finally, conclusion of the arms purchase agreements which appear to have become bogged down recently.

While business has called for (and Ma has promised) a healthier economy, he and his economic team may well find the going tougher than they expect (or let on). Taiwan's economic growth last year was a very respectable 5.7 percent. In a climate of rising inflation and slower global growth it will not be easy for the new team to deliver on their promise of a 6 percent rise of GDP annually over Ma's term.

From a business perspective, the Ma victory will see Taiwan in no worse shape than before and things may even improve. From a political and human rights perspective (at least as they are understood in the democratic context) we will have to wait and see.

About the Election
It was a two-party race. Voters had the choice of Frank Hsieh of the Democratic Progressive Party or Ma Ying-jeou from the KMT. Both are seasoned politicians but from very different backgrounds. Mr. Ma comes from a "mainland" family with impeccable and orthodox KMT credentials who, while seeking to claim the middle-ground with newfound "pro-Taiwan" credentials, nevertheless has to contend with the KMT "old guard" that he has found difficult to control in the past. 

By contrast Mr. Hsieh is Taiwan born-and-bred and has no such identity problem. He hails from the south of Taiwan, the DPP heartland and before entering politics was an attorney who defended many of those persecuted during the martial law era. A founding member of the DPP he rose to political prominence during his stint as mayor of Kaohsiung and later of Taipei.

Both Mr. Ma and Mr. Hsieh have served as chairs of their respective parties and both represent centrist factions. For this reason alone, many observers believe the election had all the hallmarks of a choice between Tweedledum and Tweedledee. That is unfair. There are important contrasts, particularly in personality and style with Mr. Hsieh often standing on points of principle-particularly where issues of individual rights and democratic norms are concerned. By contrast, Mr. Ma often appears to vacillate, veering towards the consensus approach and refusing to take a stand on controversial issues until he has "consulted." To some this makes him appear indecisive. It is difficult to know what he stands for.

Interestingly, the issue which has brought this contrast into public eye in recent days concerns Taiwan's sex industry and, by implication, the treatment by government of marginalised groups in society. Under Article 80 of the Social Order and Maintenance Act it is illegal to sell sex services but not illegal to buy them. Criminalisation of prostitution has led sex workers into the hands of organised crime and has denied such workers recourse against physical abuse. Mr. Hsieh has pledged to decriminalise prostitution if elected, possibly along the Swedish model (which turns the tables: selling sex services is not punishable but purchasing them is). By contrast Mr. Ma refused to take any position of principle and instead merely said that he would be guided by public opinion in dealing with the issue.

Gay unions is another similar issue where Mr. Hsieh takes the more liberal position of not opposing (which is perhaps the more astute political choice being more palatable to some quarters than to be seen to be actively supporting) while Mr. Ma again said he would be guided by community standards.

To many, matters surrounding prostitution and gay rights will appear to be "fringe" concerns; but in a society that is struggling to redefine itself along democratic lines, it is the DPP which is more attentive to marginalized groups. This is perhaps, the one issue that clearly defines the two camps.
The KMT is a party that still bears the footprint of its Leninist roots and one that has had a difficult time coming to terms operating within a multiparty system. As much as KMT politicians castigate the DPP for its failures in government, it must always be remembered that the law-making body-the legislative Yuan-has always been in KMT hands and the government over the past eight years has often had a tough time getting through its reform legislation, much of which has been stillborn.

As the local press pointed out again this past week, when Mr. Ma became KMT party chairman in 2005, he promised to lead an opposition that would be willing to work with the ruling party. "But time and again, from the failure to pass a reasonable arms budget to the KMT's stonewalling of President Chen Shui-bian's choice of prosecutor general-a candidate Ma openly supported-conservative elements in the party threw egg on Ma's face." Many within his party are not democrats but hanker after a return to KMT Inc. whereby the party and government were two sides of the same coin. It is not possible to turn back the clock of course but that may not be enough to stop some from trying. Would a KMT government be any more stable? We don't know, but now we may find out.

To most Taiwanese, these differences, however, are subtleties and beneath the surface. Political campaigns, especially presidential campaigns, gloss over these differences and stress those things that voters want to hear the most. And it appears that while Taiwanese national identity has become stronger in recent years, most of them prefer a "steady as she goes" approach when it comes to dealing with China. Taiwanese identity was of course repressed for much of the period under earlier KMT rule.

So perhaps in the context of election politics it was not surprising to hear Mr. Ma come out on the 3rd anniversary of Beijing's Anti-secession law and declare "Taiwan enjoys sovereignty, and Taiwan's future should only be decided by Taiwanese people." It was a statement that raised eyebrows especially as it flew in the face of statements he made earlier, most notably his 2006 remark to a Hong Kong newspaper when he said that the "Taiwan problem should be jointly decided by the people on both sides of the [Taiwan] Strait." That of course is more in tune with KMT orthodoxy. So will the real Mr. Ma please stand up?

In fact observers have noted that KMT rallies "have increasingly incorporated elements of the DPP's Taiwan-centric stance, including more use of Hoklo in speeches, as well as props that display traditional local culture, such as Taiwanese hand puppet theatre." 

The best explanation is that while the DPP has a clear-cut vision of where it wants to take Taiwan, the KMT is sending mixed signals. Indeed the contrary views cited above can be explained as representing different factions of the KMT. The more traditional "old-guard" view still sees Taiwan as part of China and is beholden to the Party's mainland roots. The younger faction (of which Mr. Ma is seen to be a part) holds views that are not far removed from those of the DPP when it comes to "Taiwan-first" attitudes.

And here is the other side of the dilemma. How will voters decide which is the real KMT? Now back in power (now the KMT is returned to the presidency), will we see a resurgent conservatism by those who have never shaken off their mainland heritage?

But there was a generally shared understanding that whoever was to have won, Taiwan would have a capable political leader at the helm although neither would have had have an easy time of it. This honeymoon will likely be short-lived. China will see to that.

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