AmCham reiterates its concerns

The 1998/99 White Paper (白皮書) is couched in language that could by no means be called provocative. Yet its message is nevertheless blunt: the government needs to do more -- a lot more -- to improve Taiwan's business environment for foreigners.

The paper, which generated enormous controversy two years ago and caused a stir again last year, albeit on a smaller scale, has noticeably remained neutral on a number of sensitive topics this year. Indeed, the absence of a definitive comment on the impact of President Lee Teng-hui's (李登輝) declaration that cross-strait relations are "special state-to-state" in nature is glaring. The paper remarks only that President Lee had "elevated the issue of cross-strait relations to a new and potentially dangerous level" by his July 9 interview with the Voice of Germany radio station, in which the "two states" policy was first outlined.

But some of the chamber's foremost concerns remain and some of its members' worries have clearly worsened, as is reflected in the paper's survey.

Probably the most critical of the survey's responses relates to obstacles facing AmCham members in Taiwan's business environment. Almost 80 percent of respondents said "government" was an obstacle. In a further breakdown of what those government obstacles were, a distinction was made between local and central government. For local government, the biggest obstacles were bureaucracy (46 percent), corruption (31 percent) and regulations (20 percent). For central government, it was bureaucracy (55 percent), regulations (41 percent) and corruption (23 percent). Either way, the perennial concerns of red tape and guanxi (personal connections) remain top concerns for foreign businesses.

Not all are tarred with the same brush, however, and clear distinctions have been made between the various branches of government. The Cabinet gets a special mention for the "mini-constitutional crisis" that erupted in February when Premier Vincent Siew (蕭萬長) tendered his resignation over a dispute related to the stock transaction tax. As AmCham delicately points out in its paper, "many commentators felt that the authority and credibility of the office of the premier had been diminished." Likewise, the chamber is concerned that the blurring of authority between the central and local governments, and the way certain projects are being implemented, might have an impact on "the Executive Yuan's ability to deliver on commercial promises."

The legislature, meanwhile, is noted for an influx of former provincial assembly deputies into its ranks after the 1998 election, which has resulted in the "increasing localization of legislation." This, AmCham says, has resulted in concerns being raised -- and some fears already realized -- that "a large number of legislators are more interested in their own private agendas due to their strong business ties or criminal records."

Such concerns are most obviously expressed in questions raised by the chamber over next year's national budget. Pointing out that the projected NT$313.2 billion deficit "stands in stark contrast to last year's budget," the White Paper goes on to say that the government's proposed solution package "includes too many uncertain factors." Chief of these are how revenue is to be gained from privatization, a process which is being held up by the legislature, and land sales and lottery sales, which are dependent on a fluctuating economy and other political factors.