Inside the red envelope

Faced with economic crisis, Taiwan looks to its consumers for help.

By Jonathan Adams, Global Post, January 21, 2009

ZHONGHE, Taiwan — Wei Chi-chang served me a plate of fried worms, then showed off the vouchers he'd received from other customers.

The Taiwan government passed out NT$3,600 (US$108) in consumer vouchers to each citizen on Sunday, in a bid to jump-start the island's economy. A few used theirs immediately at Wei's restaurant, here in a gritty Taipei suburb. For Wei and other shop owners, the coupons are a helpful boost in tough times.

"I've already received over NT$2,000 (US$60) from customers today," said Wei.

The global economic slump has hit Asian economies hard. Countries like Taiwan are especially vulnerable, since their economies rely heavily on exports.

Taiwanese firms ship much of those goods to the U.S., either directly or via factories in China. So when American consumers get stingy, Taiwan suffers. Exports fell a stunning 42 percent year-on-year in December, and the island's GDP growth slowed to about 1.9 percent in 2008 from 5.7 percent in 2007, according to government statistics.

Like most other countries, Taiwan is fighting back with a range of stimulus measures. It's jacking up government spending to give the economy a jolt. The government has proposed a massive NT$858.5 billion (US$25.7 billion), four-year spending plan, including US$15 billion on infrastructure projects, and US$6 billion to create more competitive industries.

And it's giving money directly back to Taiwanese consumers, with the vouchers — in total, a US$2.6 billion handout.

The bonanza sparked a national frenzy starting Sunday morning, when voucher distribution began at schools and other stations around the island.

Taiwanese lined up in droves to get their "red envelope." In traditional Chinese culture, gift money is given in bright red envelopes at weddings, holidays and other special occasions. So the government, naturally, did the same with its consumer vouchers.

Taiwan's many cable TV stations ran nonstop coverage of "Voucher Day." They followed the president and premier as the two spent some of their coupons at a restaurant and flower market, respectively. TV anchors breathlessly listed all the goodies — apartments, cars, gold, even a year's stay on a deserted island — that local governments are raffling off to entice customers.

One man became a media focus when he started spitting blood while waiting in line for his vouchers ("I drank too much with friends yesterday," he explained to TV reporters from his hospital bed.) Others got cranky waiting in long lines.

Back in Zhonghe, Wei, 36, said business had slumped at his Yunnan- and Thai-style restaurant. "Before, most of my customers used to come in two or three times a week," he said. "Now, it's maybe a couple times a month, because the economy's bad. There's a big difference."

He said he'll spend his own vouchers on a flat-screen computer monitor for his two children. As he talked, a voice boomed over loudspeakers at a nearby school where they were distributing the coupons: "There's not much time left to pick up your vouchers, so please come get them soon, thank you."

At the voucher collection point in my own university neighborhood, some said the scheme wouldn't address the roots of Taiwan's economic ills. "It's like taking an aspirin for a headache," said 38-year-old Mr. Lo, who works in the IT industry. "I don't think it's a good solution. The government should create a better business environment — like Singapore."

Another man who declined to be named said the amount was disappointing. "It's small potatoes," he said, using a favorite English phrase of educated Taiwanese. "Maybe we'll buy some candy," he said with a laugh, as his wife smiled beside him.

But Norman Yin, a professor of finance at National Chengchi University, said the small amount might actually help the voucher scheme work. That's because Taiwanese will be more likely to spend then sock away such a pittance in bank accounts. He said similar voucher schemes in Japan in the early 1990s and last year, and cash handouts in Macau and Singapore last year, failed because people saved instead of spending.

Yin said the response to the policy so far was encouraging. The voucher scheme should add even more than US$2.6 billion to GDP, due to the multiplier effect (money getting spent over and over as it races through the economy). But he said it would take two or three months to see if the scheme would continue to spur consumption, and so lead to more manufacturing and hiring.

"It's a short-term measure, and we don't know how long it [the effects] will last," said Yin.

Standing by a stroller holding his two infant daughters at one voucher station, Eric Lai, 34, said he and his wife will spend their vouchers on diapers and other household goods.

Lai said the vouchers can help Taiwanese forget about the island's constant political feuding. "It's good for Taiwan to put our focus on economics, not just politics," Lai said.

The relief brought by the vouchers may prove temporary. But in an economy with a serious migraine, that's welcome all the same.


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Viva Obama

World welcomes Obama with (mostly) open arms

By Jonathan Adams
Christian Science Monitor
January 21, 2009

Global reaction to Barack Obama’s inauguration yesterday brimmed with optimism, though many cautioned that the new US president faces huge challenges – and vaulting expectations that will be hard to meet.

In an editorial titled “Let change be contagious,” The Japan Times urged Tokyo to seize the chance to change a policy of “blindly following” its US ally, especially in the fight against terrorism.

With a new president at the U.S. helm, it is important that Japan shed its habit of passively following the course set by Washington….

If Japan merely obeys the will of the U.S. and ignores its own principles, it will not only arouse suspicion among neighboring countries but also invite disrespect from the U.S.

In the fishing village of Obama, Japan, a group of self-styled “Obama girls” performed a hula dance in honor of the president’s state of birth, Hawaii, Agence France-Presse reported.

In China, Reuters and others reported that state-run TV station CCTV censored references to communism and dissent in its simultaneous translation of Mr. Obama’s inauguration speech.

In an editorial in the China Daily, Yuan Peng wrote that Obama’s administration and China “should make joint efforts to prevent potential problems from hijacking bilateral ties.”

Yuan wrote that the two nations would face “thorny” economic issues and warned of possible trouble due to the US Democratic Party’s close ties with the Tibetan leader-in-exile, the Dalai Lama, and because of US arms sales to Taiwan, which Beijing sees as a wayward province. “On the Tibet issue and the Taiwan question, the US should avoid intervention in China’s internal affairs,” Yuan wrote.

In an editorial titled “Morning, Mr. President,” The Times of India noted the “enormous” challenges Obama faces, and urged him to shift the US military focus away from Iraq. “One war needs to be wound down responsibly while America’s attention has to shift to the real battleground in Afghanistan and Pakistan.”

In Iran, the Los Angeles Times quoted an aide to President Mahmoud Ahmadinejad as saying the Iranian president “planned to ignore televised coverage of the inauguration,” due to Israel’s invasion of Gaza.

“The tragedy in Gaza made him so upset and he is so preoccupied with Gazans’ problems that he does not feel like being glued to the television,” the advisor told The Times, speaking on condition of anonymity.

On Friday, Ahmadinejad called the Obama team “hostile” toward Gazans.

In Gaza itself, Agence France-Presse quoted a Gazan woman dismissing Obama’s message of change.

“Obama won’t bring my husband back to life,” the Gazan woman, whose husband was killed during Israel’s bloody offensive on the Palestinian territory, told Agence France Presse (AFP)….

Khalil, who lost her husband when Israeli bombs fell on a school in north Gaza, says the new American leader will not bring her back what she has lost.

“He was martyred and left me with six children to feed on my own,” Khalil, 42, said of her late husband. “Obama won’t repair our house that was damaged in the raids.”

Reuters reported that many Arabs and Muslims who watched Obama’s inauguration speech were hopeful that he would take a new approach to the Muslim world, though many said they would be fully convinced by his actions, not his words.

With some exceptions on the fringes, a clear majority said they welcomed a new tone from Obama, who promised relations based on mutual interest and mutual respect.

“This is a speech that reflected a new spirit of dialogue, reaching out and working together. This is a new direction that is certainly not what the Bush administration has been pursuing,” said former Egyptian Foreign Minister Ahmed Maher.

Writing in The Moscow Times, Fyodor Lukyanov warned that US-Russia relations will remain tense under Obama, due to the new US president’s likely commitment to further NATO expansion, and his choice of Hillary Clinton as secretary of State.

The Clinton name brings up direct associations with the 1990s, a period Russian propaganda views as a black hole from which Moscow miraculously escaped. On the other hand, those in former President Bill Clinton’s administration who were responsible for dealing with Russia cannot but help to experience an unpleasant aftertaste now.

The clash of those two opposing perceptions of the same events — one Russian and the other American — does not bode well for creating a climate of trust.

A 17-nation poll conducted for BBC found a high level of optimism that relations between the US and the rest of the world will improve under Obama, with 67 percent of those polled saying Obama would strengthen international relations.

Europe was the most optimistic, with almost 80 percent of respondents in Italy and Germany saying Obama would improve US foreign relations. Only two countries polled – Japan and Russia – had less than a majority share the general optimism.

In France, newspaper Le Monde quoted former presidential candidate and Socialist Party leader Ségolène Royal claiming that “I inspired Obama, and his team copied us.”

In an opinion piece in the same paper, a writer identified as historian “Pascal P” argued that “saying his [Obama’s] election is historic because of the color of his skin is itself simply racist.”

When will we learn from our mistakes? It’s time to move past the question of the color of one’s skin, and to judge people based on their abilities alone, not on their outward appearance.

In Belgium, a cartoonist complained that Obama’s good looks made him a far less enticing target for caricature than George Bush, Reuters reported.

“It’s never a gift for a caricaturist to draw a handsome man,” said Pierre Kroll, from Belgium, which prides itself on its comic book culture including Tintin.

“Somehow, we prefer overweight people, people with a beard, huge noses, ridiculous glasses … If caricaturists could elect presidents, we would choose people with faces we enjoy drawing, and not a playboy like him,” said Kroll.

The Spanish newspaper El Pais posted an interactive online guide to the new Obama administration.

In Brazil, President Luiz Inacio Lula da Silva over the weekend said he hoped Obama would talk to the leaders of Venezuela and Bolivia, who both had tension with the Bush administration, according to The Independent.

Mr da Silva said: “I see the fact that the American public voted in a black man as president… as an extraordinary sign, and I think that Obama must transfer this gesture of the American people into a sign of transcendence of American policy towards Latin America, respecting our sovereignty, our democracies.”

In a commentary in Canada’s Financial Post titled “More Bush than FDR,” Terence Corcoran noted that the themes in Obama’s inaugural “held close to themes that have dominated presidential inaugurals for many years – themes that reflect a lot more of George W. Bush than the legend of FDR … the long line of liberals and progressives who think the new president will usher in a New New Deal may well be in for disappointment.”

The website The Moderate Voice ran a sampling of cartoons about Obama from Canada, Sweden, and China.

A cartoon in The Times (of London) shows Obama in Superman garb lifting the entire globe out of a dark “Slough of Despond,” with the caption below asking, “Are we expecting too much?”

Cartoonist “Matt” in the Telegraph depicts a man with a briefcase telling his wife, as she holds a newspaper with the word “Obama” on the front page: “Right, that’s enough hope, I’m off to work.”

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Trail of terror

Ugandan rebels wage vicious attacks in Democratic Republic of Congo

In a separate conflict, Congolese rebels declare a cease-fire and plan to join government forces.

By Jonathan Adams
Christian Science Monitor
Terrorism and Security Update
January 19, 2009

Ugandan rebels have massacred hundreds of villagers in the past month, blazing a trail of terror through neighboring Democratic Republic of Congo, a major human rights watchdog said in a press release Friday.

Meanwhile, officials over the weekend hailed progress toward peace in a separate conflict in Congo (formerly Zaire), after several ethnic Tutsi rebel officers agreed to a cease-fire.

Human Rights Watch reported that the Lord's Resistance Army (LRA), a vicious group that abducts and employs child soldiers in its long-running fight against the Ugandan government, committed atrocities against civilians while fleeing Ugandan-led military assaults last month, according to Reuters.

The LRA has hacked, beaten to death or burnt alive at least 620 villagers in Democratic Republic of Congo amid a struggling multinational offensive against the rebel group, according to New York-based Human Rights Watch.

Uganda's army, with the backing of Congolese and South Sudanese troops, launched assaults on LRA bases in northern Congo on December 14, aiming to crush the rebels and capture their leader, self-proclaimed prophet Joseph Kony.

Agence France-Presse quoted one Human Rights Watch official who underscored the barbarity of the LRA's attacks.

"The LRA went in intending to kill and they left few survivors," Anneke Van Woudenberg, senior researcher at the New York-based rights group said in a statement received Sunday.

The assessment came after researchers from HRW and Congolese rights group Justice Plus conducted a two-week mission in DR Congo, collecting lists of people killed or abducted between December 24 and January 13.

A Human Rights Watch press release documents in chilling detail atrocities committed by the LRA, as described by witnesses and survivors.

According to the Center for Defense Information, a Washington-based think tank, the Lord's Resistance Army has been active in northern Uganda since the mid-1980s.

Kony uses a combination of fear and mysticism to maintain control over the LRA and sustain the conflict in northern Uganda.

The LRA is mostly made up of children between the ages of 11 and 15. Half of these are porters and sex slaves who would leave if they could, but do not for fear of being captured by the LRA and killed, or because they simply have nowhere to go.

In a separate conflict in Congo, hopes for peace were raised when officers of the main ethnic Tutsi rebel group, the National Congress for the Defense of the People, declared a cease-fire in their fight against a progovernment militia, and said the group would now join government forces.

The BBC reported that several Tutsi rebel officers had gone over to the other side, a move that will isolate the remaining Tutsi rebel leader, Laurent Nkunda.

The breakaway faction of the National Congress for the Defence of the People (CNDP) said its fighters would join the Congolese army.

The move is expected to increase pressure on CNDP leader Laurent Nkunda to declare a full ceasefire....

Gen Nkunda says he is fighting to protect his Tutsi community from attacks by Rwandan Hutu rebels based in DR Congo, some of whom are accused of taking part in the 1994 genocide.

Reuters reported officials praising the latest developments.

A pledge by Congolese Tutsi rebels to abandon their four-year insurgency marks a major step towards ending more than a decade of conflict in the war-ravaged east, Congo's government and foreign diplomats said on Saturday....

"For the government, this is a very good thing that renders the evolution towards peace more real. This is a significant advance," Information Minister Lambert Mende told Reuters.

Xinhua reported that the Congolese government would open a center in the eastern province of North Kivu to help Tutsi rebels reintegrate into the national army.

The agency reported that the effect of the announced cease-fire was rapid:

Barriers were being removed in an area 40 km away from the provincial capital of Goma, where Ntaganda's generals announced an end to hostilities on Friday.

Goma is relieved of pressure with the dissident CNDP fighters and a pro-government militia burying the axe. The militia, known by its French acronym PARECO, said they saw no reason for continued fighting with Ntaganda's men.

Both factions have agreed to be reincorporated into the government army FARDC.

As recently as last November, the Council on Foreign Relations wrote in an analysis that "an escalation of violence in the east has raised concerns that the Congolese government could fall, with serious repercussions possible for countries throughout central Africa."

With the latest cease-fire, that possibility now looks more remote. The Congolese military will now be able to focus its efforts on the Rwandan-backed Hutu militia, the Democratic Liberation Forces of Rwanda (known by the French acronym FDLR).

According to GlobalSecurity.org, that group includes Hutu extremists from Rwanda who were involved in the 1994 genocide against minority Tutsis, and later fled Rwanda.

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Fighter jets, fighting words

How F-16s (and other weapons) shape complex U.S.-Taiwan-China relations

By Jonathan Adams
Global Post
January 15, 2009

DADU MOUNTAIN, Taiwan — In a control room dug into a mountain overlooking the Taiwan Strait, three soldiers from the 951st Anti-Air Artillery Brigade track the intruding airplane on their computer screens. A standing soldier barks procedures at them; the "Sky Bow" surface-to-air missiles are readied.

Then, in unison, the soldiers chant: "Three ... two ... one ... fire."

It was a drill, of course, for the benefit of visiting media. Had this been a real invasion, a Chinese fighter jet would have just been blown to Kingdom Come.

Here, on the coast facing westward to China, the 611th Battalion, Third Company, is part of Taiwan's first line of defense. China wants self-ruled Taiwan back, by force if necessary. These soldiers are here to make sure that doesn't happen.


Their job is getting tougher, though. In recent years, a newly wealthy China has gone on a military shopping spree, buying state-of-the-art Russian fighter jets, destroyers and other lethal goodies, and building more of their own. Taiwan hasn't kept up. The result: the military balance is rapidly tipping in China's favor.

According to the Pentagon, China has 490 combat jets within close range of Taiwan, with hundreds more available. Taiwan has 390, but its fleet is aging. Meanwhile, China now has more than 1,000 short-range missiles aimed at Taiwan, up from about 200 eight years ago.

That makes the 951st Brigade's mission increasingly thankless. Without air superiority over the Strait to keep Chinese planes at bay, this defensive point at Dadu Mountain would likely be quickly overrun; the base bombed to smithereens.

To keep up with China, Taiwan has asked the U.S. for more than 60 advanced F-16 fighters. "We need them [the F-16s], because air supremacy is the last qualitative edge that Taiwan still enjoys, and that edge is tipping," said security expert and former defense official Chong-Pin Lin. "All our other qualitative edges are gone."


For nearly three years, though, Washington has ignored Taiwan's request. And it's still sitting on separate requests for submarines and Black Hawk helicopters. Mark Stokes, a former Pentagon official in charge of arms sales to Taiwan, calls Washington's silent treatment on
the formal request for F-16s a "process foul."

Washington is bound by domestic law — the Taiwan Relations Act — to make available to the island sufficient weaponry for its self-defense.

The hold-up is political. China pitches a fit every time America sells weapons to its island ally. Arms sales are "politically symbolic," says Chu Shulong, a Beijing-based expert on China-U.S. relations. From China's perspective, "it means the U.S. is interfering in China's internal affairs. It means the U.S. is going to support and protect Taiwan — and that is encouragement for some in Taiwan to pursue independence."

Chu warned that if the U.S. sold Taiwan the F-16s, China could retaliate by cutting off military contacts with the U.S., buying less U.S. Treasuries or halting cooperation with the U.S. on
non-proliferation issues, such as North Korea's nuclear program. He said on this and other issues, "China now needs the U.S. less than the U.S. needs China — this is a big shift."

Taiwan's F-16s request is one of the hot potatoes Barack Obama will inherit when he takes office Jan. 20. How he handles the issue will be a litmus test for his administration's support for this democratic island-nation. More broadly, it will be a sign of his commitment to democracy in Asia and beyond.

Positive developments in the Taiwan Strait may make his job easier. Relations between Taiwan and China have warmed rapidly since the moderate Ma Ying-jeou took office in Taipei last May. Now there's even talk of exchanges between the Taiwanese and Chinese militaries and perhaps, even, a peace deal. That makes war extremely unlikely.

Still, Ma and others here want Taiwan to maintain a strong military. They believe Taiwan should enter negotiations with Beijing from a position of strength. Many Taiwanese agree.

One is Wu Di-jin, 55. I caught up with him at his car repair shop in Taipei, which he runs with his son, Chen-ming, 32. The elder Wu says cross-strait relations may have improved, but it be some time before Taiwan can let down its guard.

On the table next him is an airplane model — an American F-105 "Thunderchief" bomber. Chen-ming made it. He later fetches from a back room an F-16 model he built last year. An airplane enthusiast, he says even the type of F-16s Taiwan has requested aren't ideal — the
technology is too old.

Still, he and his father agree: Taiwan needs the fighters. "Taiwan must be prepared," says the elder Wu, watching over a grandchild in a crib. "It's very important for the U.S. to help us. It would be best for the U.S. to sell us the planes."

For Taiwan, F-16s and other U.S. weapons are an insurance policy in case relations with China go sour. Time will tell if Obama is selling.

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Somali militias clash

Islamist militias clash in Somalia as Ethiopian troops withdraw

As 3,000 Ethiopian soldiers depart, militia groups are battling to take more control from the weak transitional government.

By Jonathan Adams
Christian Science Monitor
Terrorism and Security update
January 12, 2009

Fierce fighting between rival Islamist militias left at least 25 dead in central Somalia on Sunday, as a struggle for the heart of this war-torn nation rages in the power vacuum left by departing Ethiopian troops.

The BBC reports that the hard line Al Shabab – regarded by the United States as a terrorist group – faced off against a "local militia," killing 30 and injuring at least 30 more. The fighting took place in Guriel, 310 miles north of the capital, Mogadishu.

Correspondents say that a power vacuum may be opening up as the 3,000-strong Ethiopian force pulls out of Somalia. Ethiopian troops arrived in Somalia in 2006 to help the interim government oust Islamists from the capital.

The Ethiopian intervention was deeply unpopular with many Somalis.... Al Shabab, which opposes a peace deal with Somalia's transitional government, is trying to take control of areas vacated by the Ethiopians - Guriel was one such town.

Agence France-Presse (AFP) put the number of wounded at more than 50. It identified Al Shabab's rivals as members of the more moderate group, the Ahlu Sunna Wal-jamaah. It said the two rival militias had already battled several times in December in a struggle for control of Guriel.

"It was the heaviest clash ever in the region between the two sides," Abdulahi Hirsi Moge, a local elder, told AFP. "We have counted at least 25 people, most of them combatants, killed in the fighting and there is still a possibility of some undisclosed dead bodies outside of the town," he added.

Garowe Online, the website of a radio station based in northern Somalia, reported that the fighting broke out around 5:30 a.m. Sunday when Al Shabab forces attacked a checkpoint manned by the moderate group. It claimed the moderates are warlords who are funded and armed by Ethiopia.

Voice of America reports that some Somalis were celebrating after Al Shabab's apparent defeat in Sunday's skirmish. It quoted a senior officer of the moderate militia, Sheik Abdulkarim Risak, as saying his group is determined to drive Al Shabab out of the country.

"Thanks to Allah, we have taught them [Al Shabab] a lesson today because they left at least 50 persons dead... and now we are moving to the capital, Mogadishu. We will continue to chase them wherever they are, and even if they are in a corner of our country, I think we would not stop our fighting," he said.

According to Mr. Risak, many of Al Shabab's men were foreign fighters, possibly from Southeast Asia.

In an interview published Saturday, Reuters quoted Somali interim president Sheikh Aden Madobe as saying Al-Shabab is the "biggest threat" to Somalia. He also said Somali troops were not ready to take over security duties from the departing Ethiopians.

Mr. Madobe said Somalia would select a new president at the end of the month in a conference in Djibouti. Meanwhile, Reuters reported, the African Union is urging member countries to fulfill promises of sending more troops to help bring stability to Somalia.

The AU has been desperately trying to beef up its existing force of some 3,500 troops from Uganda and Burundi. But despite pledges of extra battalions from those two nations and Nigeria, they have yet to deploy.

Analysts say unless the African Union force is strengthened soon there is a risk those peacekeepers will pull out as well, leaving even more of a security vacuum.

A commentary in last week's Economist called Somalia "Africa's most utterly failed state" and warned that the security situation could go from bad to worse with the departure of the 3,000 Ethiopian troops.

Ethiopia's withdrawal may simply leave a power vacuum, to be filled in short order by Islamist militias that are now even more dangerous than those crushed by the original invasion at the end of 2006.

[Former Somali president Abdullahi Yusuf's] gunmen may return north to their more or less autonomous homeland in Puntland, perhaps to profit from piracy. Various armed groups would then fight for control of Mogadishu, Somalia's capital, and of central Somalia. These include a patchwork of militias loyal to rival clan elders and warlords, along with moderate Islamists, radical Islamists, and private security groups hired by businessmen.

Last week, two World Food Program relief workers were shot dead by gunmen, according to the Associated Press.

In its latest report on Somalia, the International Crisis Group urged the international community to accept that Islamist insurgents must be given a place at the negotiating table. It said the high-profile fight against pirates in shores off Somalia had distracted the world from addressing the roots of Somalia's instability.

Over the last two years the situation has deteriorated into one of the world's worst humanitarian and security crises. The international community is preoccupied with a symptom – the piracy phenomenon – instead of concentrating on the core of the crisis, the need for a political settlement.

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