The landslide victory of the Chinese Nationalist Party (KMT) in the Legislative Yuan election on Saturday reflects the electorates' urge for a better economy, but the key lies with the presidential election in March and the subsequent cabinet reshuffle to the future directions of Taiwan's economic policies, said economists.
KMT, the New Party and no-party alliance (無黨聯盟) won 86 of the 113 seats of the parliament, while the DPP took only 27 seats.
Polaris Research Institute president Liang Kuo-yuan (梁國源) said that “it's the economy, stupid” is the message the voters are sending to politicians in this election. “Taiwan's survival hinges on the economy, and time is running out,” said Liang.
"I would interpret the KMT's win with such an overwhelming margin as an 'F' marked by disappointed voters over the performance of the Democratic Progressive Party (DPP) in the past eight years, especially in the economy,” said Chou Tein-chen (周添城), chair professor at the business school of Shih-Chien University.
Though there is no consensus whether the landslide in parliament poll will bring a pendulum effect to the presidential election, economists interviewed all agreed that the outcome of the election in March is still the key for future policies. The ruling party has been complaining that opposition which enjoys the majority in the parliament hindered the implementation of its policies. Now with three-forths of the seats won by the pan-blue parties which favor a closer tie with China, sentiments for a real change would probably affect voters' choice in the subsequent election.
Taiwan's economic growth of 4.4 percent in 2007 was the lowest among 20 Asian countries, according to a report issued by the United Nations Economic and Social Commission for Asia and the Pacific last week.
End of a stalemate?
Analysts such as Standard & Poor's credit analyst Kim Eng Tan have been bullish over a decisive majority held by any party in the Legislative Yuan as a chance to pull Taiwan "out of a political quagmire".
Tan wrote in a report, "Law-making remains difficult in the absence of bipartisan cooperation. And if the legislative and presidential elections this year yield another 'split government,' it could result in continued political paralysis at a time when the government will be facing important policy decisions.”
He indicated that policy changes such as corporate income tax reform, health insurance system, restrictions on economic ties with the mainland, and banking sector consolidation will determine if the long-term credit ratings on the government can remain at or improve on its current 'AA-' level over the medium term.
Kung Ming-hsin (龔明鑫), vice president of Taiwan Institute of Economic Research (台灣經濟研究院) said, "People are tired of the stalemate of bipartisan politics over the past eight years, and the worst is over, because the impasse in the last parliament was a result of a reluctant opposition unable to accept its failure in the 2004 election." He indicated that if KMT is to win the presidential race too, that means the voters are now giving the KMT a very high expectation to improve the economy. "But if DPP's Hsieh won the presidential election, that means the voters are keen to maintain Taiwan's integrity as a country," Kung said.
Not much difference in economic policies
What else besides mainland policies that the result of this parliament election is to have an effect on other economic issues? Though most economists interviewed by us said they don't find much difference in other economic policies between the KMT and the DPP, they called for the two parties to give a clearer picture in their next election.
National Cheng-chi University professor Steve Lin (林祖嘉) does not feel there is much difference between the economic policies between KMT and DPP other than Taiwan-China relations, he believed the KMT's policy of opening the market to more mainland Chinese tourists will boost the business of the service sector across the island, and will help improve the serious unemployment problem among low-skilled workers in southern Taiwan.
TIER's Kung said both Hsieh and KMT's presidential candidate Ma Ying-jeou (馬英九) are moving towards a more "open" economic policy. "Hsieh plans to improve the investment environment by giving more tax initiatives here to attract funds that have flown to China to return, while Ma opts to open markets and push for direct flights…both are goals to boost economic growth." However, Chou said even though DPP presidential runner Frank Hsieh (謝長廷) also champions an open policy towards Taiwan-China relations, it is true that DPP lacks economic talents in its Cabinet. The voters vying for a better economy would definitely take that into consideration when they vote in March.”
Liang also stressed that the future government's ability to implement policy framework is still the most important factor to improve the island's economy. "That would depend on the success in negotiations on direct links and tourism with mainland authorities, the ability of the cabinet members, and the conciliation for internal resistance for such market openings," said Liang. "I would not say that Ma and Hsieh are the same on the liberalization side. At least Ma has no internal resistance issues on mainland policies that Hsieh has to deal with if he wants to deliver his campaign promises."
Lesson from voters
Karl Popper, a famous political philosopher, once said that to avoid the best happiness principle being abused as an excuse of benevolent dictatorship, the principle that the fight against avoidable misery should be a recognized aim of public policy, while the increase of happiness should be left, in the main, to private initiative.
Some might argue that lofty principle should be the issue reserved for presidential elections, but for people who have been impatient with the stalemate in bipartisan politics over the past few years, "the pursuit of greatest happiness" and "the fight against avoidable misery" seems to have been mixed together when they cast their vote. "Although we are concerned whether the possibility of an overwhelming win in both the parliament and the presidential race might break the balance of power, the fact that KMT lost their power eight years ago while DPP suffers such humiliation in this parliament election is a good sign that the democracy in Taiwan is maturing. The voters are teaching politicians a lesson -- if they do a lousy job without caring the people's needs, they will be out of their jobs sooner or later," said Chou.
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