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Taiwan's New Cabinet

Experience Seasoned with a Bit of Zest


Experience Seasoned with a Bit of Zest

Source:Kuo-Tai Liu

Taiwan's new cabinet is a mix of conservative technocrats and potential loose cannons. Can this lineup deliver the "people's economy" it has promised?



Experience Seasoned with a Bit of Zest

By Fuyuan Hsiao
From CommonWealth Magazine (vol. 490 )

The first tenth of the 21st century has already flashed by. But it was not until after the 2008-2009 financial meltdown and the European debt crisis had battered the global economy that Taiwan finally decided for the first time in the new century  to appoint a financial expert as premier.

Beyond his extensive financial background, Premier Sean Chen is also the first technocrat to head Taiwan's executive branch of government in 12 years. Among his strengths are dealing pragmatically with issues and not politicizing them. If the devil is in the details when it comes to making policy, Chen stands out as being more likely to "slay" the devil" than any of his recent predecessors.

One staff member working for an economic official describes Chen, who studied law, as eloquent, clear-minded and very astute, capable of balancing diverse interests. Should a deadlock emerge among ministries, the staff member said, Chen will be able to devise a solution acceptable to everybody.

Over the past year, Chen's behind-the-scenes maneuvers have been instrumental in defusing several crises and controversies, from a national toxic food scare last May and stock market volatility as the European debt crisis intensified, to a widely criticized attempt during the presidential election campaign to sully the reputation of Democratic Progressive Party candidate Tsai Ing-wen over her involvement in a biotech start-up in 2007.

Aside from hoping Chen's new cabinet, which was sworn-in Feb. 6, will focus on revitalizing the economy, the public also expects it to make "well-being" a priority. This aspiration reflects a huge challenge faced by most political leaders around the world – how to equitably spread the benefits of economic growth to the broadest number of people.

A Financial Expert without the Scent of Money

Chen is highly sensitive to the public's disappointment that the country's economic growth has not resulted in gains they can feel in their own lives.

In September 2010, a survey conducted by CommonWealth Magazine prior to elections in Taiwan's five special municipalities detected a shift in people's attitudes. Though the economy was growing at a robust 12- percent pace, the highest in 21 years, many of the survey's respondents said they had not felt any of its benefits.

After seeing the survey, Chen, who at the time had been vice premier for just over four months, did something very unusual. Normally someone who does not give one-on-one interviews, Chen called CommonWealth Magazine's editorial department and said he wanted to talk about what people perceived as a recovery that was passing them by.

In the interview, Chen touched on a number of topics, from furloughs and the well-being of the people to tax equity and the government's vision of a "Golden Decade," an indication that by then he had already transcended the typical financial bureaucrat's mind-set. He also took charge of a cabinet task force on improving income distribution and pushed amendments to the Public Assistance Act and the National Pension Act to raise the poverty line and double the number of households benefiting from government assistance.

Last week, in interviews with CommonWealth Magazine, many new members of Chen's cabinet echoed the theme, invariably bringing up fairness issues related to the well-being of the country's citizens.

Finance Minister Christina Liu stressed that tax reform would target tax fairness and Interior Minister Lee Hong-yuan repeatedly called for housing justice. Cyrus Chu, the chairman of the National Science Council, said the first thing he did after learning of his new position was to visit Economics Minister Shih Yen-shiang and emphasize the need to work together in developing new industries and creating jobs for young people.

Veteran financial reporter Tiao Man-peng, who has observed Chen for more than 20 years, says Chen has consistently shown personal growth in recent years, revealing sides of himself that she had never seen before.

Although the new premier's background is in finance, he comes without the "scent" of money that follows most financiers around. Instead, he exhibits concern for ideals. When he was chairman of Taiwan Cooperative Bank from 2004 to 2007, for instance, he became the first high-ranking bank executive to issue a corporate social responsibility report.

Tiao also sees Chen as more than just a financial expert, considering him to be the consummate problem solver.

One example of that came during his stint as vice premier, when he was cast to play a leading role in propping up Taiwan's stock market, despite not being known as a market insider. He was authorized to mobilize the National Stabilization Fund and convince financial institutions to jump into the market and buy stocks.

"He was able to mobilize people and to get money moving," observes Tiao.

Big market players came to call Chen "Big Brother Sean," and the 7,148-point level of the stock market's weighted index became known as "Sean Chen's Line of Defense."None of his predecessors in the premiership have received such respect.

Some observers have described the new cabinet as a combination of President Ma Ying-jeou's will and creativity and Chen's steady conservatism. The lineup features a number of lifelong technocrats joined by political appointees known for their sharp tongues and candor.

A Volatile Mix or the Just the Right Balance?

Chen, the new head of the Council for Economic Planning and Development Yiin Chii-ming, and Economics Minister Shih Yen-shiang are all considered to be veteran financial technocrats who have been immersed in economic fields for decades. They are the group most sensitive to Taiwan's economic plight, and whether they can offer effective and innovative ideas to deal with the country's economic challenges will be closely watched.

Then there are the potential firebrands – Chu, Liu, Lee, Minister without Portfolio Kuan Chung-ming and even Council for Cultural Affairs head Lung Ying-tai. They have no reservations about speaking their minds, but their challenge will be to translate many of their forward-thinking concepts into practical policies.

During Taiwan's presidential campaign, Chen assumed the role of acting premier and even then was preparing for the possibility of taking over the post permanently. In the first internal government meeting after Ma was re-elected, the president asserted that the coming one to two years would offer the administration's best chance to get things done. He also expressed his commitment to concluding trade deals with overseas partners and even set a timetable for their completion.

Enhancing the sense of well-being among Taiwan's people and breaking through the country's international trade impasses will become the new "Sean Chen Line of Defense" during Ma's second term. The stage is now set for Chen to step into the spotlight and when Vice President Vincent Siew  also a veteran economic technocrat – leaves the scene on May 20, Chen will truly become the captain of Taiwan's economic ship.

A banking executive close to Chen describes the new premier as cautious, wary of political entanglements, and adept at playing the role of second in command.

But what Taiwan may need even more right now is an administrative chef, somebody willing to be bold with his ingredients, to get involved and cook up progress, both at home and in the international arena. Will Sean Chen be up to the task?

Translated from the Chinese by Luke Sabatier