Although the government’s “new southbound policy” might be viewed by some as old wine in new wineskins, it is an opportunity for the nation to forge a new path in a changing world.
There are many external factors that explain why former president Lee Teng-hui’s (李登輝) “go south” policy was unsuccessful. For example, at the time, Chinese leaders were pulling out all the stops to attract foreign investment. Taiwanese businesses were being wooed by China’s low-cost labor market and favorable policies, which coincided with the 1998 anti-Chinese unrest in Indonesia. The combined external factors conspired to cause a setback to Lee’s policy.
Later, during former president Chen Shui-bian’s (陳水扁) administration, with the forces of globalization engulfing the world, Chen was forced to pursue a policy of “actively opening up Taiwan’s economy with effective controls in place,” which resulted in an exodus of Taiwanese capital, talent and technology to China.
Later still, former president Ma Ying-jeou (馬英九) put all of the nation’s eggs in one basket, which has created the present situation where the tail wags the dog and the government appears powerless to effect change.
Ma’s pro-China “go west” policy is seen as an outdated response to globalization. The government’s “new southbound policy” should be viewed as a positive new method for harnessing the forces of globalization.
Since China is seeking to become a hegemonic power in the South China Sea, now is the moment for Taiwan to improve its relations with other nations in the region. President Tsai Ing-wen’s (蔡英文) administration must grasp this opportunity with both hands. Although the government is in the middle of setting up a “new southbound policy office,” if the strategy is to succeed, it would not be enough in its present from.
Tsai’s administration needs to form a clearer understanding of what it is setting out to achieve and come up with a more appropriate strategy.
First, there is the problem of the urgency with which Taiwan needs the “new southbound policy” to be implemented. The Ma administration’s neglect in the area means that Taiwan has fallen far behind Japan and South Korea. Even China is more active than Taiwan in trading with South Asian nations. Starting from a position of weakness, the policy office must focus its resources and make an all-out push to catch up with Japan and South Korea.
As for China’s big strategies, such as the “One Belt, One Road” project, the Mekong River Basin project, the Asian Investment Infrastructure Bank and the Indochinese Peninsula high-speed rail project, it would be difficult for the office to avoid clashing with Chinese regional objectives as Taipei and Beijing vie for influence in the region. The Tsai administration must therefore make sure it has plans in place to respond to China if such a situation arises.
Next is the problem of how to promote the strategy: Which part of the business community in the target nation should the government seek to cooperate with and what form should the cooperation take? In recent years, the influence of Taiwanese groups in Southeast Asian nations has waned and their proximity to China has reduced the level of interaction with Taiwan. If Tsai’s administration chooses to continue — as the previous administration did — to mistakenly believe that it can use the networks of the overseas groups to expand business opportunities, it would be bitterly disappointed.
The policy office should appeal the industrial sector to respect local cultures, look after the interests of the local population and make use of the soft power of Taiwan’s network of representative offices to negotiate with local governments to find further opportunities for cooperation.
Finally, one of the aims of the “new southbound policy” is to push for interaction and cooperation with ASEAN and the South Asian Association for Regional Cooperation.
However, the two vast regional blocks are at different stages of development and possess different degrees of potential. Each of ASEAN’s members differ widely from one another in terms of ethnicity, language, culture and strategic military objectives, as well as the size of the wealth gap in each society. Therefore, Taiwan would not be able to employ a single idea or strategy when communicating with the block and it must be careful during negotiations so it does not bite off more than it can chew.
Taking Indonesia as an example, even though the island of Sumatra possesses abundant resources, it is inhabited by a fierce and brave people and natural disasters frequently hit the island. Another Indonesian island, Kalimantan, lacks basic infrastructure and transportation on the island is poor. The two islands can by no means be considered an ideal location for investment and regardless of how quickly a trade agreement is signed, it would end up being useless.
Therefore, the policy office should pool its resources, establish a service desk and release regular public reports that set out the strategy for attracting businesses in each nation, including information on market size, local cultural practices, locations of industrial zones, water and electricity supply, transportation, Internet coverage and other basic infrastructure.
Previous southbound policies have been about helping Taiwanese businesses find access to a local source of cheap labor. In contrast, the “new southbound policy” is aimed at developing opportunities within regional markets.
As for basic infrastructure and highway construction, Taiwanese companies do not excel in these fields. Furthermore, the languages, ethnicities, religions and cultures in the region are far more varied than in China, where Taiwanese businesses are used to operating. Therefore, if the nation’s politicians believe that all they need do is assemble a “national team” of Taiwanese businesses and success will be sure to follow, then they are being extremely naive.
Nevertheless, there are still many areas where the policy’s regional economic development projects can work hand in glove with Taiwanese businesses.
Therefore, in the markets targeted by the policy, success might be more easily achieved through pursuing cooperation with foreign businesses in friendly nations rather than by attempting to go it alone. The policy office could act as a useful go-between in such a scenario.
Effective organization and information-gathering is the only way to ensure that the government’s “new southbound policy” would be a success. Hopefully Taiwanese will soon see evidence of that coming from the policy office.
John Lu is a doctoral candidate at National Chengchi University’s Department of Political Science.
Translated by Edward Jones
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