Monday, March 31, 2008

'A rare opportunity'

Taiwan's pragmatic president-elect urges Beijing to seize the chance for cross-strait detente

Newsweek, March 27, 2008

A political earthquake recently shook Taiwan. Out went the brash, pro-independence party. In comes the Kuomintang's mild-mannered, China-friendly Ma Ying-jeou, who has ambitious plans to open Taiwan's economy to China. The power shift has raised high expectations of economic revival in Taiwan, as well as cross-strait d├ętente.

Now comes the hard part. Ma, who takes office on May 20, must jump-start Taiwan's economy amid what's shaping up to be a nasty global downturn. And his promise of warmer cross-strait ties depends to a large degree on China's goodwill. NEWSWEEK's George Wehrfritz and Jonathan Adams sat down with Taiwan's president-elect to talk about Tibet, his economic plan, and his message for Hu Jintao:

NEWSWEEK: You won in a landslide, surprising many observers who expected a close race. What do you attribute that to?

The pugnacious nationalism … of the current government has created many problems. But I think economic problems were the biggest [factor] … the current administration's performance has been so poor and people just felt that enough is enough. My running mate and I made a very comprehensive proposal for the future. But our opponent … didn't really lay out a vision for Taiwan. He spent a lot of time attacking me, and my family members. That also proved to be counterproductive. People wanted the candidates to tell them where Taiwan should go.

NW: You now have a strong mandate. What do you think the Taiwanese people want?

Ma: They want a vibrant economy, a clean government, a society with equitable distribution of wealth, and a peaceful Taiwan Strait.

They've been very much troubled by the existence of a very corrupt government … this is probably one of the single most important things. The year before last year, there were 100,000 people rushing into the streets to protest [against corruption involving the First Family and top officials]. That never happened in Taiwanese history, so many people. And this is something that people resent the most.

On the economy, I think it's quite clear that [the DPP's] policy of quasi-isolation [made] Taiwan businesses less competitive. Taiwan's national competitiveness in all of the surveys lagged behind the other three [Asian] "tigers." Our economic growth has become … only better than Japan. Intellectuals, the middle class, but also others feel change is really required.

NW: What positive contributions do you think your predecessor Chen Shui-bian has made to Taiwan's democracy?

Ma: He started as a human rights lawyer, defending some of the political prisoners, people who were roughly suppressed. So he did contribute to Taiwan's democratization. I think his rise to prominence from a very poor family proves that Taiwan society is a society with mobility.

But unfortunately, he didn't really keep his house in order. I was very much surprised by how many family members of his were involved in corruption charges. That's one thing.

Another is his insistence on the ideological isolation of Taiwan. [This] really brought a lot of damage to Taiwan. But otherwise I think he has his place in history as a democratic leader. I think people certainly remember his contributions in the past, but resent very much what he did in the last eight years.

NW: You've made many promises for improving cross-strait relations, on tourism, direct flights, and Chinese investment in Taiwan. But what makes you so confident China is going to engage you?

Ma: On the less complicated things like direct flights and more tourists, actually these issues have been discussed for at least three years. Each side knows where the bottlenecks are. I think basically they're ideological.

For instance, tourists. Our side says they should use passports, so that we can stamp on their passport. And they want to use a special travel document to avoid giving the outside world the impression that these are two countries. [But] you can always find ways to bypass that.

Let me give you an example. In 1990, the two sides met in Kinmen to discuss the issue of expatriation of illegal immigrants, criminals or criminal suspects. … So they met and everything went just fine. They came out with an agreement. At the last minute there was a bottleneck: how to date [it]. The actual month and date was September 20, the problem was the year. Here in Taiwan we used the 79th year of the Republic of China, they used 1990.

Well, the discussions were stuck for a while and then they made a brilliant decision, they said, just leave [the date] blank. You see, you can always find ways to bypass issues like this. That is why we are very confident that if we are willing to … bypass this problem [these things] could be done very easily.

NW: But recently during the campaign you called Chinese Premier Wen Jiabao "unreasonable, arrogant, stupid and self-righteous." You also suggested a possible boycott of the Beijing Olympics if the Tibet situation gets worse. Do you think that could hurt your efforts to improve cross-strait relations?

Ma: I didn't like the way they talked about Tibet and Taiwan together. It's like when they came up with the idea of 'one country two systems,' and wanted to apply that to [Taiwan]. We reminded them Taiwan is not Hong Kong, and they shouldn't draw that analogy. Actually they didn't have to talk about Taiwan when they are handling Tibetan affairs. And I think that was really an irritant, and that's why I had to not only criticize them, but denounce the way they talked about Taiwan.

And particularly during a presidential election – it's actually aiding my opponent. So that's why I became a bit furious.

On the boycott issue, of course those are conditioned on two scenarios. The first, they continue to suppress the Tibetan people, and the situation gets worse. And then, we should consult the people whether we should stop sending our teams to the Olympics … So we're watching the Tibetan affairs development quite attentively to see whether there's any sign of worsening.

NW: Do you see yourself taking a more moderate tone to make sure you can deliver things like direct flights?

Ma: Actually, these [things] are overdue, they should have been done more then ten years ago. Because [they haven't], Taiwan has become less competitive in many ways. The speed of China's rise has become so quick, [but] Taiwan has difficulty taking advantage of the situation. We're not saying we want to be "pro-China" -- we're just trying to do business as usual. So that's why we call it 'normalization' of economic relations with mainland China.

NW: If you were the Chinese leadership, how would you manage the Tibet crisis that we're seeing unfolding today?

Ma: I think they should learn from the lesson of June 4, 1989. Of course, Tibet is a very difficult case. But I think the Dalai Lama's call for autonomy seems to be a moderate one. Our position actually is in a way echoes the Dalai Lama's call for autonomy. Because he doesn't call for independence, he calls for non-violence. I think they should really start dialogue with Dalai Lama.

The Tibetan people are very, peace-loving people. But unfortunately, [Beijing] insists that the whole thing was instigated by the Dalai Lama. That makes things worse.

NW: The US economy appears headed into recession. Given this gloomy global economic outlook, how do you expect to deliver on your pledge to revive Taiwan's economy?

Ma: It's impossible for Taiwan to decouple its economy from that of the United States, particularly when the US is having economic problems, and maybe recession.

But cross-strait trade and investment still [give us] some room for maneuver. When the election results were revealed, the next day everybody seemed quite optimistic about the future. People believe they’ve been suppressed in the last eight years.

So I think if we are able to deliver on our promise of direct flights and tourists by July, the optimism will continue. If the current consumer behavior continues, there could be more than NT$100 billion of consumption by the end of the year. That means to add one percentage point to our GDP growth.

NW: Is it realistic to think Taiwan can go back to old days of high-growth, or should people be more modest in their expectations?

Ma: Well, even the DPP government once reached six percent growth. I think we will be able at least to create a favorable situation, by changing the policy on direct flights, on tourism, and get people generally optimistic for the future. And that will help. So this year, the general forecast for our economic growth is 4% or something like this. But I'm cautiously optimistic, I think it will be much better than that … People are thinking big, and I think this is good.

NW: Like many Asian countries, though, Taiwan is seeing growing inequality. How do you intend to tackle that problem?

Ma: We will introduce a new tax credit program for low-income workers, [like one] that has been in existence in the United States for quite a while. If you have a four member family and your income is below NT$480,000, you don't pay any taxes … we will give you money. It's called 'negative income tax.'

But for the moment, if we allow mainland tourists to come to Taiwan, I think, the low-income people could also benefit from that, because the businesses that would benefit from such a new wave of tourists is the service industry, that's spread across the society. So I think that way we could increase the general wealth of the society, particularly the middle and low income people.

And I think that can be done. Because the KMT, although it looks like a right-wing political party, has a lot of strength on the equitable distribution of wealth. So that will also be a very important part of our policy.

NW: There are a few major arms purchases in the pipeline, such as a request for F-16s. Are you concerned such purchases could harm efforts to improve ties with China?

Ma: In the early 1990s, we were able to acquire F-16s from the US, and also Mirage-2005s from France. At the same time we reached a 1992 consensus with the mainland. The 1992 consensus is an important milestone because that's the first effort from the two sides to … manage the problem of 'one China'.

Once we developed that formula, 'One china, respective interpretations,' that effectively shelved the problem. Then we could turn our attention to more urgent issues. So what I've been calling for is that both sides simultaneously return to the original version of the 1992 consensus.

And I think our effort has actually made some inroads. The mainland realizes that now Ma Ying-jeou is president, and he supports the 92 consensus, [which is] 'One China, different interpretations.' If they don't [cooperate], then cross-strait relations would not have a breakthrough, and four years later people may choose the DPP.

NW: Would you continue to push for major arms purchases from the US?

Ma: Yes, actually those that are in the pipeline are the Patriot-3 [missiles], and we have already agreed to purchase the P3-C reconnaissance anti-submarine planes. And now the only issue not decided is the submarines. And I think this is very controversial, it's very expensive. So when we are inaugurated we have to deal with these three first. But F-16s, have been already requested, I think the Americans have not made a decision yet. That is also very urgent in a way, in a way it's more urgent than the submarines, because we have to replace the aging F5-Es.

NW: When do you think the practical economic discussions with China will segue into a political dialogue?

Ma: In terms of priority, [the] economy comes first. The normalization of the economic relationship, not only as regards direct flights or tourists, those are the very basic things, but also thinking about an investment guarantee agreement, an agreement to avoid double taxation, an agreement to let Taiwan financial service industry go to the mainland and invest, and to take care to serve their Taiwan clients.

All these things, in other parts of the world these are just basic in economic relationships. But after 20 years of active trade, we haven't got those. And that is why we think this is high time to focus on those issues.

Of course, you could simultaneously engage them on the issue of a peace agreement. But those [are] maybe going to take more time. For instance, whether they withdraw the missiles or the military confidence-building measures, all of these require some time. Those touch very sensitive nerves [on both] sides.

But in principle the mainland side is ready to negotiate a peace agreement with us. And I think this is a good sign.

As [Beijing] becomes wealthier and more important as a world power, they also become more sophisticated … in dealing with Taiwan.

From roughly 1995 to 2005, a ten-year period, they focused on "one country, two systems." And that was a failure of course, very few people in Taiwan supported that. So they shifted to a policy intended to prevent de jure independence for Taiwan, instead of promoting unification of the two sides.

And I think that is a very pragmatic change, and it also gives us the needed room for negotiation. [I] made it very clear that I won't support de jure independence and on the other hand, I won't discuss the issue of unification with the mainland during my term of office, which is at maximum eight years.

I think I may not even be able to see that in my lifetime -- [a solution to] the sovereignty issue. But we don' have to solve that at the moment. What [Beijing] is very much concerned about is [that] Taiwan shouldn't drift further away.

Well, once we guarantee that what we mean by 'different interpretation' of 'one China' is "Republic of China," our version -- we're not talking about a "Republic of Taiwan" – they could rest assured. This is a very important promise on my part. I risked my political life to say that. In Taiwan, to say that seems to be [treasonous] to some members of the DPP. But I made it very clear, listen, I will be the President of the Republic of China, which is the official name of Taiwan.

And so, if I insist that when I agree to the "One China" principle that my interpretation is the "Republic of China", I'm only enforcing my duties as the Republic of China president, there's nothing wrong with that. But this cannot be done by a DPP president.

So I think if I do that, the mainland, of course, they always think that the Republic of China has become defunct. But the Republic of China is well and here, and it's getting better in terms of our democratic outlook and all that. They have to recognize that reality.

I have a theory, that in the past, from 1949 from maybe 1979, the two sides, mainland china and Taiwan, denied the existence of the other side. So that is called 'mutual denial'. We can't really move from there to mutual recognition, because each sides' constitution and political situation excludes that possibility.

What we can achieve is something in between, what I call 'mutual non-denial'. In other words, you call yourself, the PRC, I take note of that, but I wouldn't have to say anything further. Same thing is true, I call myself, the Republic of China, you don't have to admit you actually cannot recognize that. It doesn't matter. All you have to do is not to deny our existence.

Then, room is created for maneuver. And I think this room is badly needed for both sides of the Taiwan Strait. They don't want to get involved in a major warfare with the United States. But if Taiwan declared de jure independence, they'd have to take action.

Now Taiwan has a new president, who vowed that he would not seek de jure independence. They could rest assured that that possibility is ruled out, as far as my term of office is concerned. And I will [not] negotiate any settlement of the Taiwan issue during the 8-year period. So maintaining the status quo is the best choice for the moment.

NW: There's a notion that China will evolve peacefully. Do you see its leaders today as easier to deal with; do you see progress?

Ma: Well, at least as far as economic decisions are concerned I think the answer is probably positive.

But on political issues, particularly human rights, they still lag behind.

But I think they are making progress, and we have to recognize that. And they need further encouragement. Take the Tibetan affairs, for instance. I noticed that there are more than 100 rather well know intellectuals in mainland china calling for the leaders to hold dialogue with the Dalai Lama. That never happened in the past. Nobody dared to stick their head [out] to do that. And now they will risk their life to say that. And I'm deeply impressed.

And I think in an Internet age, sometimes this information will spread very fast, and people will understand that, well, [there are] different perspectives. So I think mainland China is changing, [and] I'm cautiously optimistic about social development,

Their leaders have become less stringent, less inflexible, and more sophisticated in dealing with sensitive political issues.

NW: Do you have a message for Chinese President Hu Jintao as you prepare to take office?

Ma: The existence of Taiwan is an undeniable reality. We have different degrees of Taiwanese identity, that is very natural. For instance, my parents came from the Chinese mainland, and I was born in Hong Kong. But once I become president, I have to insist upon … Taiwanese identity.

But that wouldn't hurt the bilateral relations between Taiwan and the mainland because I also made it quite clear that during my term of office I would not pursue or support de jure independence.

Hu once said [we should] keep or maintain the commonalities, [and] ignore the differences. If we can maintain that spirit, obviously a lot of things can be achieved. I call upon him to seize this opportunity.

This is a rare opportunity for them to see the emergence of national consensus. [Taiwanese] support a more open relationship with the mainland, but at the same time, [to] maintain the Taiwanese identity. This is a very important message they shouldn't lose sight of.

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