October 10, 2013, by Editor

Ma’s reform: Laudable goals, mounting obstacles

Written by Yu-Shan Wu

The president of the Republic of China (Taiwan) Ma Ying-jeou was a highly welcome new leader for the country both domestically and internationally when he replaced Chen Shui-bian, the former president, in 2008. His personal integrity and policy of rapprochement towards mainland China won him plaudits from those who were appalled by Chen’s blatant corruption and provocative China policy. Ma pledged to firmly stand by the law, and seek reconciliation with the Chinese mainland. During his first term, the president delivered on these promises. His team was not plagued by corruption scandals as was its predecessor’s, and a new page was turned in cross-Strait relations. The Economic Cooperation Framework Agreement (ECFA), a quasi-FTA arrangement, was signed between Taipei and Beijing in June 2010 and put into effect later that year, despite vehement opposition from the Democratic Progressive Party (DPP). During Ma’s first term, the Kuomintang (KMT) government was criticized as ineffective in initiating and implementing policies. However, Taiwan’s voters trusted Ma could give them a better future when they handed him a resounding victory in 2012, frustrating the DPP’s challenger Tsai Ing-wen by a solid margin of six percent of popular vote.

In his second term, Ma is more concerned with his legacy than winning elections. It happens that Taiwan’s electoral schedule is arranged in such as way that the country faces no major election from the beginning of 2012 to the end of 2014, a further incentive for Ma to launch structural reforms that may be unpopular but the president thinks the country sorely needs. He perceived a window of opportunity and intended to grasp it.

Taiwan has a semi-presidential constitutional system, which means a popularly elected president is coupled with a prime minister who directly leads the government and answers to the Legislative Yuan (parliament). The president has always been the dominant figure, treating the premier as his chief lieutenant. In May 2012, Ma chose Jiang Yi-hua, a political scientist, as his premier. The Ma-Jiang team then pushed for a series of reforms that left few policy areas unaffected.

In order to reduce the budget deficit, the Economic Ministry announced its intention to cut fuel and electricity subsidies. The Finance Minister then launched a capital gains tax (the existing system puts a surcharge on transactions, not on revenue accruing from them). Before bowing out the Labor Minister revealed the shaky foundation of the labor pension scheme, which led to a pension reform that increased premiums and reduced payments for both labor and civil servant pensioners, after a bitter debate on whether the government had been unwarrantedly favoring its own employees. The Minister of Education, on his part, put forward a major reform that extends compulsory, hence entrance-examination free, education to 12 years, up from junior to senior high schools. The Defense Ministry joined the reform chorus by announcing a shift from conscription to an all-volunteer military force. As a continuation of the ECFA drive, the Mainland Affairs Council and the Economic Ministry put forward a Cross-Strait Agreement on Trade in Services and hastened its ratification by parliament. Finally, Ma astonished everyone by making several television appearances in which he denounced the Legislative Yuan Speaker Wang Jin-pyng, a KMT grandee, for influence peddling in a judicial case that involved the DPP’s party whip Ker Chien-ming in the Legislature. Ma used this opportunity to show his determination to cleanse Taiwan’s judicial system. In short, Ma launched reform on all fronts.

The president’s goals were worthy ones, and his timing correct. Expecting strong opposition to his structural reforms that damage interests of many sectors, Ma deliberately launched them at time when the KMT government was least vulnerable to electoral pressure, with the nearest election more than one year away. However, the way those reforms were launched leaves much to be desired, and the reinforcing effect of the reactions to them went beyond the president’s expectations. The reduction of subsidies on petrol and electricity aroused widespread popular anger, the government’s arguments about the need to reduce budget deficit and the comparatively low energy and power prices that people had been enjoying carried no weight in public discussion. The capital gains tax whipped up furor by stock buyers, many of whom were rich and powerful. They blamed the new tax for the sluggish performance of Taiwan’s stock market and ridiculed the government for not being able to collect the expected tax revenues. The pension reform deeply alienated the the civil servants, hitherto unswerving supporters of the KMT, who saw the government unwilling to come to their defense when they were targeted by labor and the opposition as “fat cats” who drained on public finances. The extension of compulsory education was heavily criticized as parents and students were weary of the fairness of the new system that was to replace the entrance examinations. The abolition of conscription was a welcome proposal, but as the military found they could not recruit enough soldiers and delayed the shift to the new system by two years, there was great disappointment. The death of an army conscript in solitary confinement after he revealed the wrongdoing of his superiors caused an outpour of anger and mass demonstrations that shook the government. The military judicial system was abolished in one stroke, and cases involving military personnel would henceforth be handled by civilian courts. The military saw its morale sinking to unfathomable depth. Almost as a rule, the president and the government bowed under mounting pressure. Most reforms were watered down.

Last month in a rare show of resoluteness President Ma publicly denounced speaker Wang’s influence peddling as damaging for Taiwan’s democracy, and declared him unfit for the speaker’s job. As Wang was elected to the Legislative Yuan in 2012 on the KMT’s party list, he cannot hold on to his seat or to the speaker’s office if he is excommunicated by the party, which was exactly what Ma recommended the KMT’s disciplinary committee to do. After Wang’s excommunication, the speaker filed a suit to keep his party membership and successfully secured an injunction from the court to freeze the status quo. The duel between the president and the speaker goes on.

Taiwan’s political malaise is not rare among democracies. What we are seeing here is a second-term president initiated bold reforms that backfired. While media attention is cast on the saga of personal duel in the KMT leadership and the ineptitude of the president’s tactics, the real issue is whether Ma’s reforms are worthy enterprises that Taiwan genuinely needs. If government finances need straightening out, subsidies have to be brought under control, common sense fairness should be observed in the tax system, pensions require restructuring in a rapidly aging society, education opportunities should be spread, a leaner and meaner military is preferred to conscription, more economic opening up is a necessity, and obstruction of justice by high politicians have to be stopped, then we should give best wishes to President Ma and his team to get disentangled from the current malaise, and to reformulate strategies to pursue reforms that Taiwan sorely needs. Failure to do so would reduce the country’s abilities to meet the challenges ahead, and also cast doubt on the value of democracy in the eyes of those who eagerly watch Taiwan’s development from across the Taiwan Strait.

Yu-Shan Wu is Distinguished Research Fellow & Director, Institute of Political Science, Academia Sinica.

Posted in TaiwanTaiwan 1010