Taiwan's Perilous Transition

By Shelley Rigger

Foreign Policy Research Institute, June 6, 2001

In an interview with USAToday.com posted on May 2, Taiwan
President Chen Shui-bian offered a modest defense of his
first year in office. In winning the presidency a year ago,
Chen, who represents the Democratic Progressive Party (DPP),
was the first opposition politician to capture a branch of
the national government from Taiwan's long-time ruling
party, the Kuomintang (KMT).

In defending his record over the past 11 months, Chen
remarked, "We have successfully completed our very first and
very peaceful transfer of power, and we are very pleased by
this accomplishment despite chaos in our legislature and in
our media. . . Before the election, cross-Strait relations
were considered the DPP's and my personal weakness by the
general public. . . By now, even though we haven't achieved
any breakthroughs, relations have not worsened."

It seems little enough to boast of -- a transfer of power
that was chaotic, although not violent; a relationship with
China that has seen neither progress nor regress. The
limited nature   of Chen's achievements underscores the
difficulty of his first year in office, but also serves as a
reminder of something we ought to know by now: transitions
from authoritarianism to democracy are often protracted, and
are nearly always fraught with uncertainty and peril.

CHEN SHUI-BIAN'S ANNUS HORRIBLUS
There is no shortage of evidence that Chen Shui-bian's first
year in office was filled with hardship. On the economic
front, Taiwan suffered a significant rise in unemployment
(rising from a high of 2.9 percent in 1999 to nearly 4
percent in April 2001), while the Taiwan Stock Exchange has
fallen from 8,600 to about 5,000 in the past 12 months.
Politically, Chen has seen numerous challenges to his
authority, including a recall effort in October and November
in which members of the KMT and its successor parties, James
Soong's People   First Party (PFP) and the New Party,
attempted to   remove the   president from office. Most
recently, law-makers from those parties -- who hold almost
two-thirds of the seats in Taiwan's legislature -- have
called for the resignation of Premier Chang Chun-hsiung. Nor
has Taiwan made the progress Chen had hoped for in its
external relations. Although Beijing has toned down the
angry rhetoric of a year ago, there is little sign that
dialogue between Mainland and Taiwan authorities will resume
soon.

Coverage of Chen's first year in office by Taiwan's domestic
media and the international press, has focused on these
negative developments. However, it is possible to discern a
number of more positive trends and developments. To begin
with, it is deceptive to blame political changes on Taiwan
for the island's economic woes; in fact, its economic
troubles are shared by economies around the region, and the
world. The declines in its stock market are matched or
exceeded by others East Asian bourses, not to mention the
NASDAQ. Given Taiwan's tech-heavy market, it was inevitable
that a weakening world market for technology shares and
products would have a strong impact on Taiwan's financial
world.

At the   same time,   cross-strait relations   --   while
experiencing little or no progress in the past year -- have
stabilized, following years of deterioration. Beijing has
put aside the angry language that characterized Chinese
leaders' rhetoric   toward President   Lee Teng-hui   and
candidate Chen Shui-bian. Beijing is targeting its rage on
specific (relatively   marginal) figures   such as   Vice
President Annette   Lu, while deploying a united front
strategy aimed at wooing Chen's political adversaries.
Meanwhile, scores   of Taiwanese   business leaders   and
politicians have   visited the   mainland   since   Chen's
inauguration, where they have received a friendly reception.
Many of these visitors have returned to Taiwan to urge Chen
to expand trade and investment across the Strait. Some have
also spoken favorably of Beijing's proposals for political
talks leading to unification. This honey-instead-of-vinegar
approach has contributed to a softening of attitudes toward
the mainland among the Taiwanese people. Still, there is an
important exception to this trend. Mainland leaders have
pointedly excluded Chen Shui-bian and his party from their
charm offensive, preferring to concentrate their energies on
his political opponents.

Political scientists have long identified the first turn-
over of power from an authoritarian ruling party to the
opposition as a key moment in the democratization process.
Making that transition smoothly is always difficult, and
since the   KMT enjoys   electoral   legitimacy   in   the
legislature, it saw little reason to yield power to its
long-time opposition when the DPP captured the presidency.
To make matters worse, the institution of the presidency
established by the ROC constitution is a relatively weak
office. As a result, Taipei is now the site of a protracted
struggle between the executive and legislative branches over
how authority is to be distributed under divided government.

The chaos and conflict that marked Chen's first year in
office partially masked an important feature of Taiwan's
transition to a DPP presidency. This transfer of power,
however contested, almost certainly permanently altered the
nature of politics in Taiwan. The return of non-democratic,
single-party rule is highly unlikely. One possible outcome
is realignment and restructuring in the party system; the
KMT, which already has fissioned off two new parties, the
New Party and the People First Party, may well split again,
or lose members to a DPP-led coalition. And even if the KMT
holds together and regains control of the executive branch
while maintaining its edge in the legislature, the DPP is
now an established player in national politics. Multi-party
competition is institutionalized; dominant-party politics is
unlikely to revive.

Chen Shui-bian's life has been marked by extremes of
fortune, but perhaps his most astounding stroke of luck was
to benefit   from a   startling strategic error by his
opponents, not once but twice. In 1994, Chen won the Taipei
City mayor's race with just under 44 percent of the vote.
This minority vote share translated into victory because the
conservative vote was split between candidates representing
the KMT and the New Party. In 1998, these two parties joined
forces to defeat Chen's reelection bid. But the lesson was
not well and fully learned; in the 2000 presidential race,
the KMT failed to unify its supporters under a single
candidate. Instead, James Soong, long a KMT stalwart, broke
with his party and ran an independent campaign, while the
KMT insisted on a much weaker candidate, incumbent vice
president Lien Chan. (In the end, Soong captured 37 percent
of the vote, Lien, 23 percent.)

Chen's victory in the presidential race rested on two
factors. First, the KMT split made it possible to win
without capturing a significant share of conservative votes.
Second, Chen was able to overcome the reluctance of many
voters who had shown a willingness to support the DPP in
local races, but had doubts about the party's ability to
handle national   office. Chen's 39 percent vote share
reflected his successful strategy of reassuring voters that
he would not endanger the island's security by taking an
extreme position on the independence issue. Chen's position
on cross-strait relations was not significantly different
from those of his opponents; if anything, Chen was more
congenial to   some of Beijing's preferences, including
opening direct trade and transportation links between Taiwan
and the mainland.

Winning the presidency was difficult, but governing Taiwan
turned out to be an even bigger challenge for a number of
reasons. First, Taiwan's constitution created a highly
problematic institutional environment for the debut of
divided government. The ROC constitution combines elements
of presidential   and parliamentary   government, without
providing adequate mechanisms for resolving contradictions
between the two. For example, the president selects the
premier, who   heads the executive branch and proposes
legislation. The   president's choice   does not require
legislative approval. If the legislature finds the premier
unacceptable, its only option is to undertake a vote of no
confidence, which, if it passes, opens the door for the
president to dissolve the legislature. Thus, competing
incentives make it likely that a legislature that opposes
the premier will choose obstinacy and gridlock over decisive
action. At the same time, the president's freedom of action
is stymied by the absence of a presidential veto or direct
control over the cabinet.

A second problem facing President Chen was a lack of
confidence from the start. Not surprisingly, given that he
was elected with less than 40 percent of the vote, many
Taiwanese doubted his ability. As the economic situation in
Taiwan (and the rest of the world) deteriorated, these
doubts intensified. But declining confidence further damaged
the economy. These two trends reinforced one another,
prompting a downward spiral in both the economic and
political realms.

This spiral gained further momentum from some key mistakes
President Chen made early on. Both the president and his
party lacked experience in government -- thanks in part to
the KMT's absolute refusal to relinquish meaningful policy-
making positions to DPP members until it was forced to do so
by the voters --   and they made errors in policy and
political judgment. One of President Chen's greatest errors
was overestimating   the power   of the presidency. The
influence Taiwan's Presidents Chiang Kai-shek, Chiang Ching-
kuo and Lee Teng-hui derived from their status as chairmen
of the all-powerful KMT masked the institutional weakness of
the presidency, so it was only after several months in
office that President Chen began to appreciate fully the
constraints on his office.

However, Chen's   hubris should   not be overstated. He
recognized from the outset that he would need the support of
legislators from the KMT and other parties to govern. His
first premier, Tang Fei, was a KMT member who served as
defense minister under Chen's predecessor. Chen's other
cabinet appointments were drawn overwhelmingly from the
ranks of the KMT and non-partisans; barely 15 percent of his
initial cabinet picks were DPP members. What Chen did not
anticipate was the depth of the KMT's frustration and rage
at its presidential defeat. The newly-minted "opposition"
party chose a strategy of obstructionism over compromise,
with KMT legislators routinely launching blistering attacks
on Premier Tang and KMT members of his cabinet.

The KMT   vehemently rejected Chen's early gestures of
reconciliation and compromise, hoping instead to drive him
out of office, or at least force him to turn over the
cabinet to KMT control. But the KMT dared not use the one
weapon available to it that might have resolved the conflict
unequivocally: a no confidence vote. The party dared not
face the electorate so soon after the seeing its chairman,
Lien Chan, humiliated in the presidential race. Instead of
voting to replace the premier, the KMT launched a petition
in the legislature to recall the president. But polls showed
little popular support for such a move, and the KMT and its
allies eventually shelved the idea, belatedly discovering
the value of a "rational opposition." Still, the damaged
unleashed in those early, chaotic months has yet to be
repaired. To make matters worse, Taiwan's mass media have
treated Chen with extreme skepticism at best, and many media
outlets are actively antagonistic toward the president.

All of these factors combined to create two self-defeating
patterns within Chen's administration. First, because many
of Chen's   antagonists were   driven less   by coherent
programmatic differences than by raw political enmity, the
administration became paralyzed by an unrelenting fear that
it would be ambushed. Any position Chen took was attacked,
even if it was consistent with long-standing KMT positions.
For example, the "pro-business" KMT countered a DPP proposal
to reduce the length of the workweek with a plan that was
even more generous to workers. Second, the administration
fell into a pattern of crisis management, responding to
daily emergencies rather than articulating long-term plans
and strategies.

GLIMPSES OF HOPE
Despite these difficulties, however, it is possible to
discern a number of positive developments in the past twelve
months. Above all, President Chen has led Taiwan away from
the cliff on cross-strait relations. After mid-summer 1999,
when President Lee Teng-hui described the relationship
between Taipei and Beijing as a "special state-to-state
relationship" relations between the two seemed headed for a
crisis. Mainland rhetoric became even more heated in the
run-up to the 2000 presidential, climaxing with the February
release of Beijing's White Paper on Taiwan policy and a
speech in which Zhu Rongji pointedly warned the Taiwanese
people not to elect a "pro-independence candidate" (by which
he meant Chen Shui-bian).

In the event, however, Chen proved much less extreme on
these issues than Beijing had anticipated. His victory
speech and   inaugural address   both   acknowledged   the
importance of peaceful cross-strait relations, and in those
speeches he   promised to take no steps toward Taiwan
independence, so long as armed attack from the PRC was not
imminent. In a speech given on New Year's Eve, Chen went
even further, offering his support for increased economic
interaction between the two sides as a precursor to what he
called "political integration." Although Beijing has not
acknowledged these overtures, they have won Chen some
support in another important capital, Washington. In recent
weeks Taiwan has won two important prizes from the US,
including a robust arms sales package and a visa for
President Chen to visit the US. Policy statements out of
Washington suggest that under the Bush Administration,
Taiwan's relationship with the US will be stronger and more
secure than it has been for decades.

Regardless of the reaction in Taiwan or the US, Chen's
concessions to Beijing have fallen far short of the Chinese
leadership's requirements. Beijing has repeatedly stated
that President Chen must agree to the "one China principle"
in order for dialogue between the two sides to resume, a
condition Chen is unwilling to accept. A key reason for his
reluctance is public opinion within Taiwan. While few
Taiwanese hold   out much   hope of   achieving de jure
independence, most   are wary   of   accepting   Beijing's
preconditions for talks.

Although some PRC leaders, including foreign policy guru
Qian Qichen, have offered "lite" versions of the one China
principle (according to Qian's formulation, "One China"
means that there is one China, to which both Taiwan and the
PRC belong), the Chinese government holds firm to its
traditional view of one China (there is only one China,
Taiwan is   part of   it, and it is the PRC) in the
international arena. Thus, Taiwanese fear that if their
government agrees to the "one China principle," the gesture
will be interpreted as an acknowledging the PRC's superior
status, and Taiwan will surrender its claim to a separate
international existence.   In short,   despite   weakening
enthusiasm for independence among the Taiwanese people,
political support for accepting Beijing's terms is still
lacking. Without such a consensus, Chen's ability to make
further overtures is limited.

Taiwan also made progress in certain policy arenas during
President Chen's first year in office. On the issue of arms
sales by the US, Chen's government sent clear signs well
before the arms sales decision was announced that Taiwan
would accept a package lacking the most provocative item on
Taiwan's wish-list, Arleigh-Burke class destroyers equipped
with the Aegis radar system. While the reasons for the Chen
administration's retreat were complex, it did give the Bush
Administration political cover for its decision to deny
Taiwan the Aegis system. Chen's administration successfully
promoted long-overdue banking reform legislation, and the
cabinet's budget proposal passed with only minor tweaking in
the legislature. The new government has made inroads against
political corruption as well, and Taiwan's politicians are
at least debating important issues that were off the table
during   the   KMT's   ascendancy,   including   sustainable
development and balancing economic growth and environmental
protection.

THE STATE OF THE TRANSITION
The next big event on Taiwan's political calendar is the
legislative election scheduled for December 1, 2001. With a
no confidence   vote and   early elections   increasingly
unlikely, the elections offer the first chance for breaking
the political logjam that has plagued Taiwan for the past
year. As the elections approach, political conditions in
Taiwan are extraordinarily complex and volatile. With three
significant parties   competing, each of which contains
factions and tendencies favoring an assortment of coalition
options, the only certainty is uncertainty. Still, some
features of the landscape are beginning to come into focus.

First, the DPP is a much more significant political actor in
2001 than it ever has been in the past. In fact, despite all
the difficulties President Chen has faced in the past 12
months, the DPP still enjoys more popular support than its
rivals. In electing Chen to the presidency, Taiwanese broke
through an important psychological barrier. The DPP has held
national office, and the world did not end. A DPP-led
government is not only no longer unthinkable; it has become
a reality. At the same time, the DPP is more unified and
better organized than its opponents. In early April the
party finalized its list of candidates for the year-end
elections, ensuring maximum time in which to construct and
carry out a coherent electoral strategy. Given Taiwan's
complex electoral system, the party's preparations could
prove decisive.

Second, the KMT is in disarray. With its support rate
hovering around 10 percent, the old ruling party seems a
shadow of its former self. Hanging onto its legislative
majority will be extremely difficult; if it nominates enough
candidates to hold the majority, it may fragment its limited
vote share and end up even worse off than expected. As of
May, the KMT is still working on its nominations list. In
view of the large number of would-be KMT legislators --
which includes former National Assembly and Provincial
Assembly members as well as legislative incumbents --
maintaining unity through this competitive process is a
monumental challenge. At the same time, KMT legislators
whose policy preferences and political loyalties are close
to those of former president Lee Teng-hui are being courted
by the DPP, which sees them as potential coalition partners.
For many of them, party chair Lien Chan is leading the KMT
in an   uncomfortably conservative   and   pro-unification
direction. Of course, the KMT still has an enormous war
chest, but it is not clear how the party can allocate and
use those resources in this battle.

A third   important factor in the run-up to the 2001
legislative election   is   Taiwan's   changing   political
environment. The rise of the DPP and the birth of the PFP
will make for an unprecedented level of party competition
this year. Lien Chan's weak performance in the presidential
election showed that the KMT no longer can count on party
mobilization to win elections. The KMT also will find it
difficult   to   employ   its   traditional   mobilizational
practices, including vote buying. The Ministry of Justice is
targeting political   corruption, and   most of Taiwan's
municipalities are under DPP control; thus, both central and
local governments will be far more vigilant in enforcing the
laws against these practices than ever before. At the same
time, candidates from each of the parties will have to
develop new issues and positions on which to campaign. No
longer can the KMT rest its case on the claim that a DPP
victory would threaten cross-strait stability. Although
there has been little progress on this front under Chen
Shui-bian, the long- predicted cataclysm did not come to
pass when he assumed office a year ago.

Finally, it is very difficult to predict what role the
People First Party will play in this election. The party
itself is extremely flexible and focused on strategic
considerations. How   it will behave in the future is
contingent upon a huge range of factors, each of which is,
in turn, difficult to anticipate. How many candidates the
PFP recruits and nominates, how well those candidates
perform, whether or not it chooses to cooperate with other
parties before or after the election, which party it chooses
as its ally -- all of these still are open questions. Only
when we know the answers will be able to discern the
contours of Taiwan's future political landscape.

In conclusion, Chen Shui-bian walked a tortuous path in his
first year as president of Taiwan. Nonetheless, it is
possible to discern glimmers of hope as the year comes to a
close. If the legislative elections in December do not yield
a workable coalition, it may be very difficult for Taiwan to
move forward politically or in the realm of public policy.
On the other hand, if the legislative elections bring about
a realignment of political forces, either in the form of a
new party system or a realignment of individual politicians
within existing party structures, Taiwan will have taken an
important step toward a more mature political system.

Shelley Rigger is the Brown Associate Professor of East
Asian Politics at Davidson College