From The Archives - Newsweek

Tonight I noticed an old Newsweek from April 7th 2008 sitting on my friend's table, something the cleaner had unearthed. The cover immediately caught my eye as it  featured a picture of ROC President Ma, who it claimed was joining Thaksin (Ousted and in Exile), Anwar (Sodomy Trial?) and Lee (Permanent Hegemony) in 'overthrowing Asia's old guard' (ha ha ha ... simply sublime - Ma is very much part of Asia's old guard as evidenced by his then vocal opposition to democratisation in Taiwan)

So let's take a trip back in the time machine and see what was being said then ...

... and by whom.  The article was written by George Wehrfritz and Jonathan Adams. Back in 2007 Jon Adams wrote a fairly balanced piece, excepting a horribly misjudged paragraph on the then emerging Chen corruption case, praising the development of Taiwan's democracy despite its seeming political deadlock.  He was even brave enough to mention Chiang Kai-shek 'who established the Kuomintang's autocratic rule over Taiwan after fleeing the mainland in 1949' and '40 years of authoritarian rule'.

On Taiwan, 'The Politics of Nostalgia' suffers from the need to make neat comparisons with images of what has just been.  Chen needs to be a 'quixotic nationalist' who was 'tossed out' (served to his limit of administrations) who tired voters with his 'pugnacious nationalism' and whose economic management was 'so poor'.  This allows for the contrast with Ma, who is NOT a rabble-rouser, populist and old guard ideologue like Chen but one of the new 'common sense conservatives' who ...

... preach limited government, free trade and multipronged development strategies that evoke the go-go 1980s—in the hope they can recapture the 8 to 9 percent growth that transformed backwaters like South Korea and Taiwan into modern, high-tech economies. Such pledges have hit home with voters keenly aware that, outside China and India, Asia's growth rates have slowed to an average of about 5 percent in the last decade.

Backwater? Thanks for the backhanded compliment guys. But I'll forgive you because you hit a really important note and something I have said for a few years - Taiwan's KMT ran its 2008 campaign on a false presentation of Chen's economic record (actually very solid in spite of the impact of the 2001 Asian Financial Flu) and with promises that could not be realised. More on that later. First, the Chen bashing continues ...

... Chen, a former human-rights lawyer who obsessively championed Taiwanese identity and implied that Ma and other mainlanders had divided loyalties.

Chen fought economic integration with China as a threat to national security, and Taiwan paid the price: during his eight-year reign, the economy grew at just 4 percent annually—down from nearly 13 percent in the 1980s.

Ah ... Taiwan's economy suffered not because much industry had already leaked to China under Lee Tung-hui's administrations nor that the entire region had suffered a bad financial crisis but rather because Chen fought economic integration into China because he saw it as a threat.  I guess he was so busy obsessively championing Taiwanese identity he forgot to run an economy he had less and less control over.  The authors cast the reason for low economic growth to Chen yet later in the article their big point is that the 'new' leaders face a limit to annual growth they can expect. Didn't Chen feel the restriction of that limit on his economic policy making? Didn't Chen's public popularity fall following the 2001 recession? Didn't Ma get elected on the argument that the DPP as a party had failed to deliver a good economy - one that didn't meet the overhyped expectations of Taiwanese for 8-13% like the good old days?   Yet ...

Ma campaigned on the argument that integration with China is a savvy global economic strategy, not a threat. When he takes office in May, he plans to forge direct transport links with the mainland, free up capital flows and open the door to millions of Chinese tourists. "We're not saying we want to be pro-China," says Ma. "We're just trying to do business as usual."

That last sentence should be the give-away because the next thing the article does is describe just what 'business as usual' really means:

There is, however, a throwback, statist side to some of these leaders, who are setting specific growth targets and spending heavily to reach them—as did their predecessors from the '50s through the '90s. 

Ma's "633 Plan" aims to achieve 6 percent annual growth, boost Taiwan's per capita income to $30,000 by 2016 and cut unemployment to 3 percent.

Ma favors $130 billion in public-works projects for upgraded mass transit and expanded airports and container terminals. 

Statist, Spending, Public Works, Airports, Container Terminals, MRTs.  The concrete is pouring as fast as the Gangsters can fix the price, shake hands with the Mayors, Magistrates and County Commissioners and source the legal but abused Asian migrant workforce needed to build it. This is all best summed up thus ...

Political scientist Shih Cheng-feng of National Dong Hwa University in Taiwan says such massive public works are "an old game" that will at best provide a short-term growth spurt. 

Like the NT$3600 free coupon (Please vote KMT. No visible strings attached. Do not swallow. Made of peanuts. Keep away from children). At this point the article is feeling more balanced but I speak too soon because the authors fall into the trap of neat categorisations legitimised by a claim to have 'found' a new model of leaders ...

It's too soon to tell whether the rise of the popular pragmatists is a paradigm shift or a passing fad. A lot depends on whether the new leaders can deliver.

Their strategies, mixing free-market pragmatism with the old Asian impulse to command economic growth, suggest some confusion about how to grow fast.

That made me smile.  The rise of 'the popular pragmatists' is a given that is only modified by the caveat that the rise may be a fad or a paradigm shift.  The 'rise' is real because we found four leaders between whom we thought we could make tenuous, or at least questionable, grounds for comparison sound more like the emergence of a new substantial phenomenon in the Asian political-economy.  Never mind the racist and unnecessary use of 'Asian' to describe the impulse of a government to control economic growth can someone tell me what 'free market pragmatism' actually means first? Despite this self-aggrandising fortune telling, the authors do actually manage to make a good point and end the article relatively strongly ...

What the new leaders aren't asking is whether the old rates are still realistic.

The richest economies typically can't grow faster than 3 percent for sustained periods without overheating. 

South Korea and Taiwan may find that 5 percent is their new speed limit.

"... new state leaders have fewer levers they can pull, [and] it's much harder to manage economies than it used to be." Particularly when voters expect past performance to predict future results.

In 2007, I am KMT Presidential Candidate Ma Ying-jeou.  I need to convince voters that the incumbent president and his party are incompetent. I choose the meme of poor economic management (later i'll use the catchphrase 'lost eight years').  Its one that most Taiwanese can relate to.  Taiwan's GDP has hit 6% in 2004, dropped to 4.89% and 2006, and has now risen to 5.7% in 2007.  How do I make that look bad? Easy. I compare that to the growth rates of an era of seemingly unstoppable growth and industrialisation. In Taiwan that means the 1970s and 1980s and growth rates of 8 - 13% year in year out.  If, on the other hand, I admit that the new rate is realistic then I can't claim that my opponent and his party have done a bad job on the economy. There is no electoral incentive for a challenger for the Presidency to offer a slower growing economy as a policy.  The voters will revolt.

The final warning of the article is sensible enough and it sends a message that these new leaders should not promise the earth lest they fall on the sharp edge of their own pledge.  I'll bet Ma, in 2010, is ruing those promises he made.