On Sept. 23, former president Lee Teng-hui (李登輝) said, "The Ministry of Finance is trying to destroy the farmers' and fishermen's associations by having commercial banks take over their credit units. If it acts recklessly on policy affecting the farmers' and fishermen's associations, the DPP will have to be careful of losing power." Presi-dent Chen Shui-bian (陳水扁) responded by saying that "reform will continue even if it risks costing us power."
Chen's statement was inspiring and people from all walks of life sought to generate ideas on how the NT$1.05 trillion Financial Restructuring Fund should be used. Eventually, however, under pressure from a series of planned marches and protests by farmers and fishermen, the government decided to suspend the implementation of risk-management measures aimed at regulating the associations' credit units. That decision has brought a halt to the financial reform of the units.
In 1996, non-performing loans (NPL) extended by farmers' and fishermen's credit units totaled NT$72.3 billion. After six years, this has increased to NT$137 billion as of June this year. The NPL ratio was 8.57 percent in 1996, as opposed to 21.53 percent in June this year.
We will come to regret postponing grassroots financial reform if no action is taken soon.
The problem of financial reform was caused by the KMT administration's laissez-faire approach and procrastination, which it found beneficial in controlling local party factions.
The administration's decision to suspend the implementation of risk-management measures has halted some reforms that had already been set in motion.
The difficulty of grassroots financial reform lies in the complex ties between the farmers' and fishermen's associations and political factions, not from the implementation of financial measures. We believe that it is impossible to reform every aspect of the system; trying to make everyone happy will result in hypocrisy. We can only try our best to allay the opposition of vested interests. In the face of opposition from the "targeted groups," we should neither hesitate nor flinch from our mission.
Grassroots financial reform is irrelevant to politics. The grass-roots financial institutions are a timebomb that could trigger a financial crisis at any time. Their senior officials do not belong to any particular party or faction; they care only about pursuing their own interests.
In 2000, the people's disappointment with KMT reforms led to a change in government. Today, that same sense of disappointment has re-emerged. It is obvious that simple, vigorous reform does not necessarily result in loss of power. But the administration certainly risks losing power by advocating reform and then caving in to anti-reform protests.
Since the 2000 election, we, as founding members of the DPP, have felt increasingly powerless about the party's apparent abandonment of its past ideals and resolve.
Hong Chi-chang and Tuan Yi-kang are DPP legislators.
Translated by Grace Shaw
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