Open Studio Series: Creating a Democratic Alliance

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Open Studio Series: Confronting Pension Reform

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Chair Su Tseng-chang's remarks over the shooting incident by the Philippine Coast Guard of a Taiwanese fisherman

In regards to our country granting the government of the Philippines 72 hours to respond over the May 9 shooting by the Philippine Coast Guard of the Taiwanese fishing boat, resulting in the death of a Taiwanese fisherman, Chair Su Tseng-chang reiterated on May 14 that the DPP fully supports President Ma’s Administration in demanding the Philippine government uncovers the real culprits, issue an apology, provide compensation and initiate negotiation over fishing rights.

Chair Su also appealed President Ma’s administration to strengthen sea rescue mechanisms, and pay closer attention to sea defenses since the defense budget has been severely cut in the recent years.

Chair Su said he believes that the Philippine Coast Guard unreasonably shot the Taiwanese fishing boat, killing a Taiwanese national. Upon first instance, he immediately issued, on behalf of the DPP, his support of President Ma on this issue.

“Even though we are an opposition party, but in this instance, our views towards the external world are one,” he said.

Chair Su said he wishes to offer suggestions to President Ma on how to deal with this kind of incident. He said that firstly, the government must strengthen normal sea rescue mechanisms because as seen in this case, the emergency response from the government was too late, and further reflection is needed in the regular training of sea rescue mechanisms. On the second suggestion, Chair Su said that in the recent years, the government has severely cut the national defense budget, leaving deficiencies in the normal activities of the navy and the coast guard. He lastly urged President Ma’s Administration to increase the budget for its maritime defense in order to guarantee the country’s national interests and to ensure our sovereignty.

Chair Su also appealed the government of the Philippines to immediately offer their explanations to Taiwan, using dialogue and peace to resolve this issue. He also urged the Philippine government to assume their responsibility over this incident in order to satisfy the collective interests of the people from both countries.

After the Central Standing Committee meeting on May 15, Chair Su said that the Philippines’ government response has left many in Taiwan very unsatisfied, especially over the lack of sincerity in its apology without offering specifics over compensation.

He said that he wanted to emphasize that the long-term relationship between the people of the Philippines and Taiwan have been very friendly and close, including trade, tourism and workers exchange. He appealed the people of Taiwan not to take any unfriendly actions towards Philippine nationals residing in Taiwan.

“However, when we deal with the government of the Philippines, we must stand strong in our demands because this incident was carried out by an official of the Philippine government, and we must ask them to offer an explanation so that the victim’s family and the rest of the Taiwanese people can have closure,” he said.

 

 

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DPP holds first China Affairs Committee Meeting, announces complete list of members

The DPP’s held today its first China Affairs Committee Meeting. Chair Su Tseng-chang delivered the meeting’s opening remarks. Also present were Committee Members Frank Hsieh (Former Premier) You Shyi-kun (Former Premier); Tsai Ing-Wen (Former DPP Chair); Ker Chian-ming (DPP Legislative Caucus Convener); Chen Chu (Greater Kaohsiung Mayor); Lai Ching-teh (Greater Tainan Mayor); Chiu Yi-ren (Former National Security Advisor); and Wu Nai-ren (Former DPP Secretary-General).

 

Below are the remarks made by Chair Su Tseng-chang:

 

“This is the first meeting held by the DPP’s China Affairs Committee. I would like to take this opportunity to thank the members of the DPP Central Standing Committee for their approval and to all the China Affairs Committee members for their willingness to participate. This also includes the staff and other members for their involvement in the preparation months before and leading to today.

 

“Sitting here together today, the objective before us is very clear, and the responsibility is immense. What we must do is to protect Taiwan’s core values, to develop the best benefits for Taiwan, and we must also find the largest consensus for our future in the cross straits. For a long period of time, China has placed Taiwan in a very clear framework with a definite agenda, and they have set out step by step to fulfill this plan. This has caused the China factor to enter and exert greater influence on Taiwan. Facing China, we must enthusiastically build our self-confidence, but facing up to China’s set agenda,  Taiwan cannot afford to remain passive. We must convert passiveness into initiative, and outside of China’s framework, we must take the initiative and issue our own topics into an agenda that should be Taiwan-focused. This must be done in order to reduce the interference and influence that China has on Taiwan. We also wish to strengthen Taiwan’s space for its own decision-making.

 

"As we have already held many preparations and discussions with experts and academics from different fields, leading to today's first meeting, we have issued a 'Taiwan's China Agenda'. This is a new type of framework and thinking involving: how to persist and make the Taiwan Dream a reality, how to open a new order for cross strait interaction and how to contribue to regional stability and peace. This is not something that can be accomplished by one person or political party alone. This requires that Taiwan entirely faces up to this serious issue.

 

“For this reason, our goal in creating the China Affairs Committee is to provide a platform of dialogue and understanding, inviting everyone to participate instead of limiting it to inside the party only. We have also invited mayors and governors from cities and counties, legislators and opinion leaders. We also wish to include the power of society to engage the public in discussion in order to create the greatest force for Taiwan to meet China and to welcome the rest of the world.

 

“Once again, I would to express my deepest gratitude to everyone for their involvement in this task.”

 

Executive Director of the DPP’s Policy Research Committee, Dr. Joseph Jaushieh Wu said that in order to combine the force of civic society, after seeking advice from a multitude of sources, 37 experts have agreed to take part in the DPP’s China Affairs Committee.

 

 

The additional members of the Committee include:

Ÿ   Professor Chen Ming-tong (陳明通), National Taiwan University, Graduate Institute of National Development;

Ÿ   Research Fellow Shih Jun-ji (施俊吉), Academia Sinica, Research Center for Humanities and Social Sciences;

Ÿ   Assistant Professor Tsai Hung-Jeng (蔡宏政), National Sun Yat-Sen University, Department of Sociology;

Ÿ   Assistant Professor York W. Chen (陳文政), Tamkang University Graduate Institute of International Affairs and Strategic Studies, who will also act as the convener for the Political, Economic, Social and Security Group;

Ÿ   Former Legislator Lin Cho-shui (林濁水);

Ÿ   Former Legislator Chiu Tai-san (邱太三);

Ÿ   Research Fellow David W.F. Huang (黃偉峰) Academia Sinica, Institute of European and American Studies;

Ÿ   Associate Professor Tung Li-Wen (董立文), Central Police University, Department of Public Security;

Ÿ   Lai I-chung (賴怡忠), Taiwan Thinktank, Member of the Executive Committee;

Ÿ   Distinguished Professor Tung Chen-yuan (童振源), National Chengchi University, Graduate Institute of Development Studies;

Ÿ   Professor Chiou Jiunn-Rong (邱俊榮), National Central University, Department of Economics;

Ÿ   Professor Su Jain-Rong (蘇建榮), National Taipei University, Department of Public Finance;

Ÿ   Associate Professor Tao Yi-feng (陶儀芬), National Taiwan University, Department of Political Science;

Ÿ   Professor Lee Ming-Chun (李明峻), Taiwan Society of International Law, Secretary General;

Ÿ   Associate Professor Wu Chih-chung (吳志中), Soochow University, Department of Political Science;

Ÿ   Former Veteran Affairs Commission Minister Hu Chen-pu (胡鎮埔);

Ÿ   Professor Tsai Ming-yen (蔡明彥), National Chung-Hsing University, Graduate Institute of International Politics;

Ÿ   Assistant Professor Chiu Chui-cheng (邱垂正), National Quemoy University, Department of International and Mainland China Affairs;

Ÿ   Professor Huang-chih Chiang (姜皇池), National Taiwan University, College of Law; and

Ÿ   Professor Ming-sho Ho (何明修) National Taiwan University, Department of Sociology.

Spokesperson for the Committee, Mr. Cheng Wen-tsand said that among the 37 experts, their combined areas of knowledge include political, economic, financial, civic, international affairs, defense and human rights. He also added that in the group, the list also includes former government officials as well as Chinese nationals who are experts on China's political conditions and who are willing to provide their assistance in Taiwan's China policy formulation.

Director of the DPP’s China Affairs Department, Mr. Honigmann Hong said that the DPP did not release the full list of names because some participants were unwilling to have their names and positions be known to the public, but they were more than willing to provide their knowledge in China policy formulation.

 

Nevertheless, Mr. Hong said that in the future, if there are new members added to the list, the DPP will release them to the public upon permission by these members.

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Democracy & Progress - April 2013

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CEPD's Free Economic Demonstration Zone is like a never-ending bad play

By Chen Po-chih, Honorary President, Taiwan Thinktank

April 2013

It's been four years since our government first brought up the ideas of a Free Economic Demonstration Zone (FEDZ) and a Special Zone (SZ). Before now, the leadership has circled the wagons and was unable to explain what is special about FEDZ or SZ, their roles and functions, and the nature of their necessity. In recent announcements, however, the government has begun to hint that an expansion of existing Free Trade Zones (FTZs) is in the offing, and that given new functions, FTZs today may be the FEDZs of tomorrow. Figuratively speaking, does this sound like after years of pie-sketching, the government is now taking our old pie and offering it back to us as new pie? The fact that the government is not re-inventing a new pie is actually not such bad news because if the government were to flesh out a new pie willy-nilly, it might give us a poisonous one—while crafting the policy, the government zigzagged capriciously and explored radical ideas that could have baleful consequences for our country—that said, I sincerely hope the final pie will not be baked with toxic substances.

The primary reason for the government’s failure to adequately implement this policy is not purely executive incompetence; rather, it is the erroneousness of the policy’s target and the names themselves. If the government’s policy had, after careful consideration, been deemed both necessary and economically feasible, it could have been justifiably brought forward. However, it is foolhardy to spend so much time planning and, in the end, be incapable of providing a satisfactory outcome. The strategy for the Free Economic Demonstration Zone (FEZ) appears to be one of first developing a fancy slogan, then reweaving the content of previous policy. Furthermore, the zone’s designation is simply a recycled title. Therefore, the FEZ not only lacks a concrete and feasible policy plan, but even its raison d'être is woefully ambiguous.

The driving force behind Ma's concept of the SZ is the creation of an open-door policy to China. To achieve this goal, the Ma administration came up with several slogans in the process.

First, in his 2007 election campaign, Mr. Ma proposed the "Cross-Straight Common Market" (CSCM) initiative, which was criticized as being unwitty, because in order for a single market to function, the signatory country must allow freedom of labor mobility; but as we all know, freedom for Chinese labor to enter Taiwan was prohibited. Hence, the "Cross-Straight Common Market" was not feasible (see http://www.cw.com.tw/article/article.action?id=33145).

Even though Ma's campaign team disputed the guest labor requirement, in the end, they succumbed to the political reality and recognized the infeasibility of the initiative.

Following the failed CSCM initiative, Ma's team came out with a new policy, new slogan— a Free Trade Area of Taiwan (FTAT). The rationale behind FTAT was that good faith shall spawn reciprocity; so the team proposed a one-sided FTAT to all countries. The policy opponent opined that according to international regulatory system, absent of a full-fledged Trade Agreement, the one-sided open trade strategy is ineffective in stimulating return (see http://www.cw.com.tw/article/article.action?id=33213).

As a political posture, Ma's team struck back against criticism and accused the criticizer of disparaging the campaign until such time when Mr. Ma is elected into the office. Once in power, Ma's kitchen cabinet deems it unwise to put political muscle behind the foolish supposition. Therefore, the administration moved on to yet another policy, another slogan-SETZ (Special Economic and Trade Zone), which was later superseded by FEDZ (Free Economic Demonstration Zone).

The constant flip-flop and zigzag on policy outcrop the executive incompetence and lack of understanding as to what should be the purpose for the policy. So, shortly after the FTAT was proposed, some people, obfuscated by the proposal, uttered aloud, "increase domestic-guest worker ratio", others, "apply a double wage standard". These so-called "special privileges"—worker ratio, wage deferential—were scrutinized; and eventually the administration had to declare that there will only be one labor condition, no privilege in the trade zone. The loss of privilege puts the policy in a quandary because FTAT now suddenly has lost its appeal. So the administration swept the policy back to the planning department. And, after a long pause, what eventually emerged is the resuscitated concept of special privilege.

It is of my opinion that if privilege is eventually granted to occupants in the trade zone, in the future, the privileged will only suck away opportunities from the unprivileged. In other words, the future economic success for the trade zone will only come at a price paid by the unprivileged.

I also believe this policy may even be dangerous because when lower labor cost and labor conditions are translated to lower selling price and greater market share, it is only a matter of time when the privileged drive the unprivileged out of business; and the knock-on effect will cause widespread factory closure and unemployment outside the trade zone. Even though it is a simple logic, yet government and proponents choose to see only the jobs and investment creation in the zone, and not the destruction outside of the zone.

A similar kind of destruction found its way to a new government program—the Taiwanese Business Repatriation Initiative (TBRI), which supposedly is designed to augment national economy with return of overseas investment. TBRI is pregnant with various perks and privileges; and it will give qualified repatriates the comparative advantage to outstrip their unprivileged competitors. Suffice it to say that TBRI is also unfair and unreasonable because it allows the government to privilege the repatriates, and not the native Taiwanese, much like the parents deed the land to the returning absentee child, and not the stay-at-home dutiful child who plows the land.

Besides labor issues, the government may even consider making other accommodations in the trade zone, such as: land usage, land lease, tax breaks for imported raw materials, just to name a few. So the more the government gives, the wider the fairness gap goes.

Let's look at our economy from a different angle. As of today, Taiwan boasts a strong economic freedom. Yes, some restriction can still be found in the system; however, those restrictions are needed to underpin our economic liberty, and should not be removed in a slapdash manner. In the case where change is necessary, complimentary measure must be devised to support the change; and the change must be carried out throughout the country, and not just in special zone because as demonstrated above, unfair special privileges in the trade zone can jeopardize the overall economic system.

In addition, it is fairly common to see the economic freedom stands cheek by jowl with issues such as guest worker and basic labor wages, among major economies however, not a single country has yet to allow unlimited foreign labors. So if our government does choose to loosen or remove the guest labor quota in the trade zone, the outcome of that policy will not be a free economy, nor a demonstration of one; rather, the result is a prerogative economy where privilege is unevenly distributed—as a case in point, in order to receive the privilege, one must be either a qualified repatriate or a tenant inside the special zone.

When we do encounter an economic liberalization policy that can't be reasonably implemented, without partiality and in one single stroke, then a gradual and scalable approach implemented on national level is always a better alternative than full-scale liberalization in a special zone.

Of course, I'm not suggesting that there can't be exceptions to the rules. There were times when special zones were the only solution when gradual and national implementation was proven insurmountable. In fact, in the cross-strait economic and trade development heretofore, the most momentous special zone concept was first brought up by me. Unfortunately, however, the trade zone idea did not materialize and the concept was grossly distorted.

Here is how it got started. In 1993, the government proposed the APROC initiative (Asia-Pacific Regional Operations Center) to entice multinational conglomerates to call Taiwan the headquarters of their Asia-Pacific grid. Owing to existing transportation regulation, ease of entry to the country was onerous for mainland Chinese and cumbersome for non-Chinese nationals; therefore a comprehensive reform was badly needed. Due to time constraints, the reform and the subsequent national implementation were both proven impossible. So, when juxtaposed with Hong Kong and developing Shanghai, Taiwan lacked the infrastructure needed to support the multitude of foreigners and their movement in and out of our country.

To circumvent the situation, I proposed to then-Premier Lian Chan, and then-President Lee Ten-hui that we expand the Taoyuan International Airport to allow a special APROC zone. The purpose of this proposal is to allow immigration exemption on international travelers (arrival and departure), and eliminate transportation problems with respect to foreign visitors traveling inside our country. Furthermore, since the APROC zone is concentrated in a small area, public infrastructures inside the zone can be quickly retrofitted and new policies can be immediately carried out to support the need of an APROC (see Recommendation for APROC, 梁國樹 Liang, Kuo-Shu Financial Reform v. 3, Recommendation for Economic development, Yuan-Liou Publishing Co., Ltd. Taipei, Page 115-124).

In my proposal, I recommended that we should not only customize the regulation to fit the APROC zone, we should also deploy full scale financial and monetary policies inside the zone in line with international standards and already practiced by other financial centers. I further emphasized the importance of adding new air travel destinations to connect Taiwan to at least 20 major cities in China so the sheer volume of passengers can transcend Taoyuan International Airport into a major connection and transfer hub for airline companies in the Asia-Pacific grid.

None of the suggested measure requires gradual implementation, and all are within the scope of a full scale, immediate deployment; and that is why a special APROC zone was recommended at that time.

Premier Lian Chan embraced the concept and invited me to the Research, Development and Evaluation Commission of the Executive Yuan to oversee the implementation, but I declined the invitation, and afterwards the proposal was unable to be realized. According to Premier Tang Fei, my recommendation to build the APROC zone at Taoyuan’s airbase did get pass down for implementation, but subsequent incidents of vandalism as a result of sloppy airbase management ensued. Despite the special zone not being brought to completion, many advertised the idea of a Taoyuan Aerotropolis that it suddenly gave rise to a round of land speculation around the airport and the neighboring areas. Recently EVA Airways metaphorically criticized the concept as "an egg with egg white, but no yoke", which admittedly was true as more works were needed before the concept will bear fruits — such as financial and trade business. In the meantime though, property speculators are enjoying the runaway windfalls.

Over the years, our government has already streamlined immigration and customs procedures to allow ease of entry. The new regulation has vitiated the need for a special zone; but the government is still going headstrong about reviving the idea of the special zone. If some blame shall befall on me, it would be completely understandable as I am the one who came up with the concept in the first place.

Our country already has a liberalized economic system and we do not need a special zone today. Giving privilege to the occupants in a special zone will undoubtedly inflict grave harm to the unprivileged companies and even the entire economic system.

Government has made enough futile attempts in planning a special zone that has meaningful substance; therefore, I sincerely suggest that it's time to bring down the curtain on the never-ending bad play; it's time to stop placing false hope on an anachronistic slogan; and it's time to get serious about the long neglected reforms. Finally, let me just say this: let it go; let this slogan and all other failed slogans fall into oblivion.

 

Original Document in Mandarin Chinese can be found at:

 

http://www.taiwanthinktank.org/chinese/page/3/26/2616/0

This opinion piece does not necessarily reflect the views of the DPP.

 

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Democracy & Progress March 2013

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