The recent allegations of corruption and kickbacks involving Yeh Shih-wen, former head of the Construction and Planning Administration (營建署) and now a former Taoyuan County deputy commissioner, who allegedly received bribes from a well-known construction firm over a construction project in the county’s Bade City (八德), has sent ripples throughout society, especially because it is likely that the whole case will snowball, and more people will become implicated.
More heads may roll in politics and business circles.
Some have attempted to explain away this behavior by saying it is all part of how the game is played, and has been for some time, talking of “unspoken rules” and “historical complicity,” but this just serves to highlight how commonplace — yet grievous — this complicity between politics and business has become.
At the same time, The Economist, which has been observing and analyzing the political and economic situation in Taiwan for some time, published a Crony Capitalism Index in March.
In this index, Taiwan was placed eighth on a list of 23 countries, up two places since 2007, the last time the index was published. This shows that Taiwan’s political and economic situation has dramatically deteriorated, and that democracy and the rule of law in this country is declining.
The term “crony capitalism” is a description of the degree to which politics and business are intermeshed.
Simply put, market competition is not based upon a free market and rule of law; it is founded upon the connections of those in power or the ruling party. This brand of political nepotism, involving the relatives of powerful individuals or groups, political allies and the rich, either as a result of blood relations, marital ties or acquaintance, or through political contributions or bribes, acts as a tool to consolidate the power of those already in positions of power, who use state resources, under a variety of guises, to recompense those who help them to this end.
And this is the model by which the political and business worlds go round: Money is used to secure political power, and political power and influence is used to allocate resources.
This perpetual vicious circle produces a collective political and corporate entity held together by the glue of mutual interest.
It monopolizes the allocation of public resources and results in the disintegration of the rule of law and the judiciary, gnawing away at the underpinnings of the democratic edifice.
This rent-seeking behavior also means that the benefits of national economic growth ends up in the hands of the minority, while the majority become impoverished.
This leads not only to the loss of competitiveness, but also to the death of social justice and fairness.
Crony capitalism is cropping up, in one form or the other, all over the world. It goes without saying that it is rampant in authoritarian or totalitarian states, where dictators openly sell their power for money.
In the US, it is mainly connected to business interests and political elections, in that arms, oil, medical and financial corporations provide huge political donations in connection to lobbying to have laws passed that benefit themselves, while politicians rely on the support of these corporations and their political donations to get into the White House or to be elected into the US Congress.
In Taiwan’s case, the relationship between politics and business just so happens to reside in the gray area somewhere between authoritarian rule and democracy.
Although Taiwan has already gone through two transitions of political power, the transitional justice process was never completed and we have yet to be delivered entirely from the kind of party-state capitalism that the Chinese Nationalist Party (KMT) brought with it over from China.
We also still lack clear guidelines on the proper limits to the lobbying of legislation, and consequently the amount of influence exercised by various industries over debates in the legislature of laws and regulations that concern them, as well as whether donations should be regarded as political contributions or bribes, plain and simple, is still rather murky territory. It is in this shadowy area that corruption gestates so well.
Nothing is more conducive to Taiwan’s own breed of crony capitalism than the den of iniquity that is the KMT’s ill-gotten party assets.
These assets were seized by the KMT to consolidate its power when it first came over to Taiwan, together with the Republic of China Army, fleeing China and the Chinese communists.
All this wealth was used in shoring up the political power of Chiang Kai-shek (蔣介石) and his son and successor Chiang Ching-kuo (蔣經國) by securing the support of public servants — military personnel, civil servants and public school teachers — and to mobilize local vote captains.
Following Taiwan’s democratization, KMT party assets were supposed to have been returned to the national coffers, but true to the style of President Ma Ying-jeou (馬英九) and the government over which he is presiding, such promises were replaced with empty sound-bites, and never honored: Six years into his time in office, Ma is still holding on tightly to those party assets.
This protection of the party’s vested interests hardly avails itself to reform, and so even if people talk of the fair and equal competition between political parties, this could not be further from the truth.
To be fair, Ma is not responsible for the emergence of crony capitalism in this country. However, his empty posturing and talk of anti-corruption drives and reform, without actually doing anything about it, is without a doubt helping the culture of corruption in government circles to thrive.
Time and time again, people close to Ma and important businesspeople are embroiled in corruption scandals, and yet his knee-jerk reaction is simply to say that he is “disappointed” and “shocked” by the revelations.
In this situation, how could his authority not collapse? The public has lost faith in him, and government officials have lost their respect for him.
In this environment, we are sure to see cases of corruption escalate, while our democracy dissipates and the corrupt republic continues. This will be Ma’s legacy, and the tragedy of Taiwanese.
Translated by Paul Cooper
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