Friday, June 11, 2010

In Taiwan's Corruption Trial of the Ages, Money Talks

Taiwan's high court has ruled on former President Chen Shui-bian's conviction for money laundering, corruption, falsifying documents and accepting bribes. The high court's ruling did not overturn Chen's conviction from a lower court but lessened the penalty of his crimes. The most obvious was to reduce his life imprisonment to 20years in jail. Instead of being deprived of his citizen's rights for life, it is now only ten years.

There were no explanation given for the reduction of penalty which left open the speculation that perhaps Taiwan's judiciary is still hoping to recover the rest of the funds Chen and his family had illicitly absconded and put in overseas accounts.

Chen's family has been remitting funds from various overseas accounts in drips and drabs back to Taiwan apparently as part of the negotiating strategy with Taiwan's judiciary.

The strategy seems to be working. Chen said in court that he can guarantee the return of the remaining 570 million NT dollars held overseas within one week of his release on bail. Nothing subtle about Chen. To him, money has always talked louder than rule of law.

In the court room, Chen's supporters went through the motion of protesting loudly because Chen did not get exoneration but a mere term reduction, albeit with big smiles on their faces.

In Taiwan's peculiar brand of democracy, who knows how many more remittances it will take for Chen to become a free man? He apparently has two more layers of the courts where he can take his plea and by judiciously parcelling out the return of his ill gotten gains, he just might be able to buy his way out of jail.

I am hardly the only person to point out the inconsistency of the latest ruling. See for instance a translation of an editorial of one of Taiwan's major newspaper.

Tuesday, June 1, 2010

How long will the Strategic Triangle remain strategic? - Part II

I missed the second day of the Stanford symposium which was to concentrate on the future of Taiwan and the dynamics of the triangle. The following are my own observations on the matter.

The dramatic change in the cross strait relations since the change in the regime from Chen to Ma could not be overstated. Chen feared opening Taiwan to tourists from the mainland. Ma went after them. Now, thousands arrive from different points of the mainland daily providing multi-billion dollar boost to Taiwan’s economy. In the most recent negotiations for direct cross strait flights, it was the Taiwan side that wanted more flights and more destinations while the Beijing side was more reluctant.

Barely noted at the Stanford symposium was the remarkable change in Taiwan’s ranking in World Competitiveness Scoreboard as measured by the Lausanne based IMD. For the current 2010, Taiwan has risen to No. 8 in ranking from No. 23 in the previous year. No other economy has made such a dramatic leap in one year. This can only be attributed to the more enlightened policies under Ma, countermanding many of the policies in effect under Chen and the extent Taiwan has already integrated with the mainland.

The current expectation is that the parties across the strait will conclude the Economic Cooperation Framework Agreement (ECFA) in June. ECFA was something eagerly sought by Ma’s administration as the most crucial development that will enable Taiwan to enter the global trade on more equal footing relative to other countries. The potential benefits to Taiwan’s economy would be enormous. Yet, the greatest opposition is being mounted by DPP because to them, the threat of integration with the mainland trumps any economic benefits.

Of course, DPP’s fear is not groundless. Beijing, under the leadership of Chairman Hu Jintao, finally understood that the way to winning the hearts and minds of the Taiwan people was not with missile intimidation but to encourage more people to people exchanges. Taiwan’s business people already understand the benefits of closer ties with the mainland, but they represent less than 10% of the populace.

Since Ma came into office, there have been direct flights, bi-directional cross strait tourism, and increasing visits from government and non-government officials in both directions. I believe Beijing is seeking every opportunity to tell the mainland side of the story directly to the people in Taiwan.

The previous regimes under Lee and Chen did not permit free exchange of people across the straits. They did not want direct contacts that could alter the perceptions of distrust that Lee and Chen had so carefully cultivated on the island of Taiwan. Lack of access and interchange certainly can explain why the high percentage of Taiwanese prefer the status quo.

I frankly believe integration across the straits is inevitable. Taiwan’s economic health is dependent on integration with the mainland. Economic cooperation will be accompanied by more people to people exchange. Increasing exchanges will build trust across the straits.

Taipei will also need to do its part. It will be up to Ma to explain to the people of Taiwan of the up-side benefits of closer cooperation with the mainland. Taiwan has suffered severe loss of confidence and sense of who they are after Chen’s eight years of misrule had isolated Taiwan from the world community. Ma needs to explain to the Taiwan people that rather than fear, they can be proud that they share the culture and history with the mainland.

The offer to negotiate ECFA was a surprise gesture of goodwill by Beijing. I believe the next surprise move will be when PLA redirect the aim of missiles away from Taiwan, a largely symbolic but psychologically important gesture to the people on Taiwan. Eventually, polls in Taiwan will swing away from independence and even status quo will look less attractive then the intriguing possibility of unification.

Given the speed that cross strait relations has warmed, I am confident that by 2015 Taiwan will drop from the ranks of the hotspots of tension while the world will still be dealing with the likes of the Middle East, Afghanistan, Iraq, India-Pakistan-Kashmir triangle, and the two Koreas.