Suggestions for the New Administration from the Other Half of TaiwanChien Hsi-chieh: For a Scandinavian-Style Civil Society

From the perspective of civil society, the KMT government has gotten this opportunity to take back the reins of government because over the past eight years the values of the Democratic Progressive Party (DPP) got out of whack. They concentrated solely on independence and ethnicity, then made matters worse by sinking into high-level corruption and doing a poor job of running the country. That is why the KMT won the elections. But during its eight years in opposition the KMT did not succeed in reforming itself or pointing the party in a new direction. So it's not so much that the people have once again placed their hopes in the KMT; it would be more accurate to say that they have simply shown their trust in Ma Ying-jeou. And for this reason, it remains to be seen whether money politics will return to the fore after the KMT resumes power.

Business in the crosshairs

Both the KMT and the DPP are very pro-business. They dare not do away with excessive and overlapping concessions that have been granted to business interests. Take tax breaks, for example. The ones provided for in the Act for Upgrading Industries may end up being extended [beyond their scheduled expiry at the end of 2009], and in terms of taxing the rich, no-one has the stomach to introduce taxes on income from capital, while estate taxes may soon be greatly reduced, as well. They say this is necessary to put Taiwan on equal terms with Hong Kong. It is true that Hong Kong has no estate taxes, but neither does it have Taiwan's imputation system [under which investors who receive a dividend also receive a tax credit for corporate taxes that the firm has paid], and Hong Kong taxes the offshore income of foreign firms. And most important of all, Hong Kong is running a fiscal surplus while Taiwan is awash in red ink.

Taiwan's tax burden (i.e. total tax revenues as a percentage of GNP) is already the lowest in the world at 13.8%, compared with 18-20%, or even more, in most developed countries. This suggests Taiwan's fiscal base is highly unstable. But no government official dares touch the subject of raising taxes. You can't do it by increasing taxes on wage earners; you have to do it by reducing tax breaks enjoyed by the rich. But the new administration has been talking up its "12 major infrastructure projects." That means it has to rely on corporate investments and curry favor with the business community.

Taiwan has always used tax breaks to keep cozy with corporate interests, which I feel is inappropriate. Just look at China, with its "two reductions and three half-rates." Firms enjoy the breaks for five years, and that's it. After that, there are no more blanket tax breaks, and any further special treatment is given in the form of subsidies, which come with strict conditions. For foreign firms, the tax rate goes up in a single step from 15% to 25%. And when China decided to enact a new employment contract law, it just did it without worrying about the reaction of the business community. That's a good thing. If our new administration would think a little more along those lines, it could avoid accusations about being in too cozy with business interests.

Independence vs. reunification

I feel the KMT has a good opportunity, because the old KMT ruled on the basis of ideology (anti-communism and a belief in a single China) while the DPP's rule was also based on ideology (Taiwan independence and ethnic hatred). Neither of them made a real effort to establish a civil society founded on diversity. The new administration should work in this direction. Unfortunately, however, I haven't seen any forward-looking policies from the KMT to address such issues as wealth disparity, the shrinking family, ethnic harmony, and new immigrants.

As for the issue of independence versus reunification, I feel that Taiwan already has an incipient multi-stranded civil society. In the most recent Freedom House survey, Taiwan ranked as the freest country in Asia, and we placed 32nd overall among 195 nations worldwide. We should appreciate the importance of this kind of environment. In particular, the issue of independence versus reunification is not a matter of bad versus good, or right versus wrong. Both viewpoints should be respected, and neither side should try to pin labels on the other.

It is true that I'm from the DPP, that I think of Taiwan as a nation, and would prefer independence. But if the people want reunification, we are also willing to give China a chance. Our position is that any decision, regardless of whether it be for independence or reunification, should be made democratically and peacefully. That's the most important thing.

Chen Shui-bian, for example, sought independence, and while in doing so he respected democratic procedure (referendums), he was nevertheless provocative toward China. Was he wanting armed revolution? Did he want to fight a war of independence with China? That would be at odds with the people's desire for peace, stability and prosperity, and it would be irresponsible.

As for those who favor reunification, you can't just talk about peaceful reunification because that could easily open the door to "reunification through surrender," which would be wrong. They must stress democracy. They must use democratic procedure. Their position must gain consensus support in civil society; that way they wouldn't be seen as selling Taiwan down the river. And China has to understand that Taiwan's future must be decided by the people of Taiwan, and that it is therefore incumbent on China to do right by Taiwan and win the people's hearts, and in fact any cross-strait reunification is dependent on democratization in China. That's the only way we're going to have a win-win situation. If reunification were accomplished by military force, it would be another February 28th situation all over again, which would leave deeper and more long-lasting scars.

Consensus and solidarity

The new administration has been stressing improved cross-strait relations, but everything so far has been about business and trade. Well, we were moving ahead on business and trade already, and it was all for the benefit of business interests. But the focus of cross-strait relations can't be limited to that one aspect. The most important thing in the future will be contacts across the whole spectrum of society.

For example, NGOs are gradually developing in China, and while NGOs there are still not completely autonomous because most are controlled and monitored by the government, nevertheless, an incipient form of civil society is at least beginning to slowly take shape. In the past, it was difficult for people from NGOs in China to come to Taiwan because the Taiwan government had very tight controls, but in the future we should encourage such visits as much as possible. We need to establish people-to-people contact.

And there are problems we could work together on. China has terrible dust storms, for instance. Our Council of Agriculture has experience working on desert agriculture with our diplomatic allies, and we could work together with China in this area. And Taiwan's Tzu Chi Foundation has incorporated in China, which is good. Also, the new administration should adjust our foreign policy and national defense posture. Our foreign policy shouldn't be so pro-US and anti-China. We would play an important role by advancing peace in East Asia and around the world. We could take a more middle-of-the-road position, so instead of being a pawn of the US we would be a bridge for peace between China and the US. These are steps we can start taking on our own. We should devote more resources to improving cross-strait relations and fewer resources to buying US weapons. They would take notice.

I also hope the new president doesn't get bogged down in routine administrative matters, but will do as much reading as possible and become a true statesman. Take someone like the Dalai Lama, for example: the man is thoroughly legitimate in every aspect, be it personal character or what he seeks to achieve. If we have someone like that as our leader, Taiwan will certainly be successful.

We keep pointing to Scandinavia as the model. Per Albin Hansson, leader of the Swedish Social Democratic Party, spoke in 1928 of a welfare state system that he referred to as "the People's Home." He stressed freedom, equality, and solidarity. With equality, there can be no discrimination and no one would dare stir up ethnic tensions. His emphasis on solidarity meant that their education didn't focus on competition, but sought instead to have people engage in creation together through group cooperation.

But the core of the Scandinavian approach is consensus building. Up to the 1930s, Sweden had the most serious labor conflicts in the world. Workers were known to sabotage entire factories. It was a very violent time. But now, thanks to the concept of solidarity and painstaking, patient consensus building, they have totally reversed the situation. This is the power of beliefs and values, and it is what we need most.