Political fallout may harm Chen

President Chen Shui-bian (陳水扁) is facing another crisis of credibility after he unexpectedly announced the government would suspend the reform of the credit units of farmers' and fishermen's associations on Sunday.

Chen's decision has eviscerated a long-expected three-tiered risk-control mechanism, which was launched by the Finance Ministry on Aug. 20, to clean up the non-performing loans problem of the grassroots credit units.

"The setback apparently revealed his election-oriented thinking and lack of experienced advisers," said sociologist Chiu Hei-yuan (瞿海源).

"The president's about-face indicates the government is heading toward corruption."

Chiu, who is also a senior member of the Taipei Society, an independent and a research fellow of Academia Sinica, said that the DPP's identity as a reformer had helped the party win the 2000 presidential election, but the people in Taiwan are beginning to get frustrated with the president's repeated policy reversals.

He stressed that the DPP's continual growth and development were based on its consistent values and spirit of reform. The confidence and expectations of the people have, however, plummeted since they saw the way Chen exercised power during the past two and half years.

In October, 2000, former premier Chang Chun-hsiung (張俊雄) announced that the construction of the Fourth Nuclear Plant would be suspended, without party-to-party negotiations or supplementary programs and the move caused a year-long confrontation between the ruling party and the opposition.

The opposition parties attempted to unseat the president by emphasizing his careless decision-making and finally the president succumbed to pressure and asked the Cabinet to reinstate the project.

"Only a coward will refuse reform simply for the sake of the regime," President Chen said one year after he launched a reform over the grassroots credit units.

In early November, the farmers' and fishermen's associations around the country decided to launch a demonstration to protest the government's agricultural reform plan and opposition party leaders declared their support.

After a meeting with five of the DPP's local administrators in southern Taiwan, the president asked the Cabinet to suspend all the financial reforms concerning the cooperatives last Sunday.

"Even DPP lawmakers criticized the decision saying that the president's leadership ability is questionable. The effects of the setback may stymie reform within the party, cause the DPP to lose support and, worst of all, financial reform itself will go nowhere," Chiu said.

Though sources from the Presidential Office insisted that the president's decision was made out of concern for farmers and fishermen and to create more space for further negotiation, they nevertheless admitted that Chen had been influenced by local DPP government chiefs, who told Chen that strict oversight of the grassroots credit units may alienate traditional DPP supporters in southern Taiwan.

In the 2000 presidential election, Chen's victory was dependent on over 50 percent of the votes from seven counties and cites in southern Taiwan.

Chin Heng-wei (金恆煒), editor in chief of Contemporary Monthly, said the president made the mistake of thinking that a concession would give him more space to counter political pressure.

"Chen changes his policy simply because the party's local administrators disagreed with the reform and that gave the opposition an excuse to make an issue," Chin said.