Government Downplays Fears of Political and Economic Crisis

According to a public opinion survey conducted by the China Times in mid-November, the new administration earned a grade of only 61 on average for its performance after half a year in office. Although it received an approval rating of 68% for its work in cracking down on corruption, approval was below 50% for everything else. Performance in financial affairs even set a new record low, gaining affirmation from only 23% of the populace. Dogged by partisan struggle with the opposition, President Chen Shui-bian's personal approval rating also dropped from 82% after one month in office, to only 51% today.

On November 11, the leaders of three opposition parties-the Kuomintang (KMT), People First Party (PFP) and the New Party-held a summit, and amidst a tense political atmosphere, offered a six-point proposal to the ruling party: Return to the system of dual-executive leadership (the "semi-presidential" system); convene a second tax reform conference as soon as possible, and stop inappropriate government interference in the market; return to the 1992 consensus of "one China, separately interpreted"; actively promote the elimination of corruption; invest the government's full energies in the reconstruction of earthquake-stricken areas; and allow the Legislative Yuan first priority to pass laws dealing with civil affairs.

On November 20, the Democratic Progressive Party (DPP) marked its sixth month as the ruling party, but because of a long series of political disturbances during the last half year, the Chen administration's attempt to run a "government of the whole people" crumbled, and instead it formed a minority government. Thus, the cabinet has consistently found itself a "new hand behind the wheel." Major policies naturally have not been fully implemented, engendering an aura of dejection, and dour expectations for the economy.

Because of combined political and economic doldrums, President Chen Shui-bian specifically recommended that the Executive Yuan provide a special report on recent domestic and international economic conditions and its economic development strategy. The Executive Yuan proposed the formation of a special task force made up of representatives from the Office of the President, the cabinet, the DPP and the legislature, thus expanding the scope of the policy-making system, and responding to the six-point proposal of the opposition alliance.

The spark which seems to have ignited this blaze of turmoil and generated such serious political and economic gloom was struck in October, when the cabinet announced it had decided to cancel construction of the Fourth Nuclear Power Plant, without having officially notified the Legislative Yuan, inciting intense conflict between the DPP and opposition parties. Because opposition legislators were displeased with the ruling party's monopolistic policymaking methods, and considered the Executive Yuan to be nothing more than an administrative organ for the Office of the President, not only did they petition the Control Yuan to impeach the new premier Chang Chun-hsiung (who heads the Executive Yuan), but also moved to recall both the president and vice president. At a time when the transition of power between political parties was not even half a year old, a constitutional crisis involving a confrontation between the executive and legislative branches erupted, the first ever since the Republic of China was founded.

The KMT and PFP, which had originally split because of the presidential election, joined together with the New Party to form an alliance to oust the president, forming a majority in the legislature of nearly two thirds, the threshold needed to pass a recall motion. This was the subject of widespread attention. In an attempt to resolve the political stand-off, the ruling party moved on two fronts. First, the Executive Yuan called on the Council of Grand Justices to rule on the constitutionality of the Cabinet's halting of the Fourth Nuclear Power Plant. At the same time, DPP legislators called for an interpretation of the constitutionality of the move to recall the president.

Generally speaking, this wave of partisan strife is centered around the government's constitutional structure. After the coalition administration collapsed, the DPP proposed a minority administration led by Chang Chun-hsiung. Yet the president, who appoints the premier, was elected with less than 40% of the vote, and the DPP holds less than one third of the seats in the legislature. Displeased with the ruling party's unwillingness to share power, the opposition parties threatened to recall the president unless he agreed to certain conditions, including the establishment of a coalition government. The nuclear power plant controversy contributed to the atmosphere of hostility.

Responding to the proposals of the opposition alliance, President Chen Shui-bian clearly expressed his unwillingness to share executive powers, and Premier Chang Chun-hsiung stated that after the minority administration was formed it would in fact streamline the DPP's ability to implement its political pledges.

What precisely is the constitutional structure of the Republic of China? Is it led by the president, or is it a "dual-executive" system inclining to empower the cabinet? The ruling and opposition parties have failed to agree. Thus, although both camps are calling for a "return to the constitutional system," there is a complete lack of consensus.

Legislator Hung Chao-nan, who also serves as deputy director general of the KMT's Policy Coordination Committee, describes the KMT position as being that currently the Legislative Yuan is unable to oversee the president, but must bear the political burden of policymaking. The DPP should accept the reality of its minority political position, return to the "dual-executive system," with a separation of powers between president and premier, and allow the Executive Yuan to reflect the actual distribution of seats in the Legislative Yuan.

DPP legislator Lin Cho-shui, a long-time observer of the constitutional system, also admits that as the ruling party, the DPP does not understand how to share power. In addition there is no negotiating mechanism by which the ruling and opposition parties can build mutual trust. Consequently, the institution of a minority government, which has worked for many years in northern Europe, has failed to get off the ground in Taiwan.

The ruling and opposition parties also have disparate ways of interpreting the constitution. Scholar Kuo Cheng-liang has proposed two feasible ways to overcome the impasse: Firstly, the ruling party and the opposition could share the authority to appoint personnel, running a joint cabinet or arranging for a left-right coalition administration. Yet because Legislative Yuan elections are imminent and the competition among the various parties will only increase in intensity, this option is not highly practicable. Another alternative is to share policymaking powers. For example, the Chen administration could pledge to officially notify the Legislative Yuan of all major policy decisions. It could construct negotiating mechanisms between the president and the majority party in the legislature, between the Executive Yuan and the Legislative Yuan, and among the various party caucuses in the legislature, thus expanding the extent of multi-partisan participation in policymaking.

Yet just when the ruling party and the opposition were embroiled in conflict over the constitutional framework and efforts to oust the president, rumors of a scandal in the Presidential Palace broke out. The one who leaked the rumor was alleged to be Vice President Annette Lu. This ultimately implied an internal struggle within the Office of the President, thus further complicating the political chaos and dashing hopes of a resolution.

The rumor surfaced when KMT legislator Liu Cheng-hung, during a speech at the Legislative Yuan's National Affairs Forum, referred to rumors floating around the Presidential Palace, revealed in a new book by media personality Chou Yu-kou. Liu described the situation as "Taiwan's Lewinsky affair," and a public scandal instantly erupted. Not long after, the news magazine The Journalist featured a cover story that claimed the person leaking the rumor was none other than Vice President Annette Lu. Lu denied the allegation, and decided to launch a law suit. Although this incident is not related to the ongoing partisan conflict, it has generated an enormous stir in Taiwanese politics. The original political problem of unending discord has consequently become even more complex.

As public opinion is focused on the disorderly state of political affairs, a dark cloud hangs over Taiwan's economy. In addition to basic negative economic factors such as several months of steep declines in investment and the unemployment rate hitting a fifteen-year high, the stock market has continued on a downward spiral, real estate prices are in a slump, and the island's financial hardship index has surpassed its highest point during the Asian financial crisis of 1997. Moreover, the British magazine The Economist forecast a possible financial crisis in Taiwan at the beginning of next year. ROC Minister of Finance Yen Ching-chang refuted this prediction, pointing out that Taiwan's financial system is still considered strong, but former Minister of Finance Chiu Cheng-hsiung, a member of the KMT, warned that Taiwan may indeed face financial crisis within one or two years.

The economic outlook has already seriously affected the lifestyle of the average Taiwanese. As the ruling and opposition parties have yet to resolve their conflicts over the constitutional system and the distribution of authority, it is the hope of all the people that they lay aside their differences, pool their collective wisdom, and work out a strategy for long-term economic development as early as possible.

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In mid-November, opposition party leaders Lien Chan (center), James Soong (second left) and Hau Lung-pin (fourth right) of the KMT, PFP and New Party respectively, held a summit and produced a six-point proposal for the government.

(photo by Hsueh Chi-kuang)