Cabinet Reshuffle Emphasizes Economics

In May when Chen Shui-bian ascended to the presidency, he appointed Tang Fei of the KMT as premier. The Chen-Tang government promised that it would be "a government for all the people" and that it would "clean up corruption." These courageous statements charmed the nation, and the government's approval ratings topped 70-80%. But in the months that followed the members of this team seemed to be marching to different drummers. They often contradicted each other, and their efforts seemed generally uncoordinated. A chorus of criticism rose up over the government's handling of the Pachang Creek rescue incident, and criticism grew even more intense when the government moved to halt the construction of Taiwan's fourth nuclear power plant.

Tang Fei, who opposed halting construction, finally submitted his resignation to President Chen, citing problems with his health, on October 3.

The "government for all the people" was no more. On the following morning, Chen announced that Chang Chun-hsiung, who had been secretary-general of the Office of the President, would take over as premier, and that the new secretary-general to the president would be Yu Shyi-kun, who had formerly been vice premier before resigning over the Pachang Creek rescue incident. This partial cabinet reshuffle was the first step taken by what was now just a minority government.

To create economic stability, Premier Chang announced the formation of an "economic cabinet." Vice Premier Lai In-jaw came to his new job from the Judicial Yuan, where he served as a grand justice. Chiu I-jen became cabinet secretary-general after serving on the president's National Security Council. Yen Ching-chang took over as minister of finance after serving as political vice minister at the Ministry of Finance. Chung Chin switched from heading the Government Information Office to becoming minister without portfolio. Chung's old post was filled by Su Tzen-ping, formerly chief editorial writer for the Taiwan Daily News. Vice Premier Lai In-jaw is also serving as chairman of the economic task force and as director of the National Stabilization Fund. The government has an entirely new economic team.

On October 6, when Premier Chang was sworn into office, he promised the 23 million people of Taiwan that in the shortest time possible he would restore hope and confidence in the government, declaring that the cabinet's top priorities would be political stability and economic development.

Lai In-jaw presided over the first meeting of the cabinet's economic task force on October 9, to which he invited Lin Hsin-yi, minister of economic affairs; Chen Po-chih, chair of the Council for Economic Planning and Development; and Lin Chuan, director-general of budget, accounting and statistics. He hoped that they could quickly introduce measures to stabilize the stock market and the economy. On October 14, the cabinet's economic task force further announced eight major economic policies. These included eliminating the business tax for financial institutions, instituting a "no tax hike" policy for this presidential term, permitting the appropriate use of foreign labor, establishing a guarantee fund to provide preferential loans, allowing foreign asset management firms to handle bad loans, assisting small and medium firms to upgrade their technology, leasing out government land in industrial zones, and taking active steps to prevent electricity and water supply shortages. What's more, the government also formally authorized investment trusts and investment consulting firms to make decisions on behalf of their clients. Under Lai's leadership the cabinet has recently adopted a series of economic stability measures.

Chen Po-chih, the chairman of the Council for Economic Planning and Development, believes that the cabinet reshuffle will put everyone on the same page. He notes that President Chen has clearly stated that from now on the government's policy will be "economics first, social welfare second." Toward that end, he is emphasizing the development of a knowledge-based economy.

Outside opinion about the new cabinet differs. Jason Hu, head of the KMT's department of cultural affairs, has said that this cabinet is paying even less heed to the political situation than the last. Not only has it not consulted with the National Assembly, it hasn't even taken into account opinion within the ruling DPP itself. He argues that this shows a lack of careful consideration.

PFP Party Chairman James Soong argues that Taiwan's current political and economic malaise is entirely a result of the various units of the government being out of synch. This has led to a crisis of confidence. Hence, it is important to strengthen coordination.

The New Party policy committee invited opposition parties to a meeting to discuss the Chen-Chang government. At the meeting, which was held on October 8, it was clear that people were very skeptical about the prospects for a minority government being successful. Some likened it to an ecstasy pill [which in Taiwan is colloquially known as a "head-shaking pill"-hence skepticism]. After a short period of excitement, they argued, its bad side effects will soon become apparent. Most expressed "cautious pessimism" about the future of this minority government.

An editorial in the Commercial Times argued that the appointment of Chang Chun-hsiung as premier and the announcement of the new cabinet with an economic orientation marks the arrival of a minority government, and shows that the DPP no longer has any desire to form a coalition government. The editorial acknowledged that the "good cop" political style of Chang Chun-hsiung might work well with Chen Shui-bian, so that they can get the cabinet on the same page as the Office of the President, with the premier acting as the president's de facto chief of staff. But the paper argued that this was no guarantee that president and cabinet would be able to leave the mire of political difficulties behind them.

After taking over, the new cabinet has so far mostly been meeting with difficulties in trying to get the 2001 budget approved and implementing its various policies. On October 24 negotiations over the timetable for drawing up the budget collapsed. The opposition parties challenged Chang's assertion that whether or not to implement the budget was up to the executive branch and said that if the old budget (which authorized funds for the building of the fourth nuclear power plant) wasn't implemented, then they wouldn't pass the new budget. The ruling party, meanwhile, called into question the propriety of tying the new budget to the building of the fourth nuclear power plant. Up until the end of the month the review of the legislature's budget was clouded with uncertainty, making Chang's insistence on halting construction of the fourth nuclear power plant very controversial.

With frozen cross-strait relations, the stock market at a low ebb, and rising unemployment, the government's every move is under close scrutiny. Apart from the emotional issue of whether to halt construction of the fourth nuclear power plant, there are also such issues as stipends for the elderly, social welfare, the proposal to create a "green Silicon Valley," educational reform, debate about whether measures to bolster the stock market are proper, labor policy and unemployment. All of these must be focuses of the cabinet's energies. The coming period will be key to seeing whether the new government can regain the people's confidence.

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At the beginning of October, Premier Tang Fei (right) resigned, and Chang Chun-hsiung (center) and Lai In-jaw stepped up to lead the new "economic cabinet," which plans to focus on "political stability and economic development." (courtesy of the Government Information Office)