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SEPTEMBER 1 , 2000 VOL. 26 NO. 34 | SEARCH ASIAWEEK

Politics of Compromise
Will Chen break promises?
By ALLEN T. CHENG Taipei

ALSO:
The 100-Day Itch:
Why Chen Shui-bian's honeymoon as president is over, and what he mu st do to restore credibility
'Let's Meet, not Holler': So says the DPP chief about China
It's Business as Usual: Taiwan's China investments are growing

During the presidential campaign earlier this year, Taiwan's main labor unions sponsored an event featuring the candidates. They or their designates were to give speeches and the unions were supposed to endorse one of them after the event. The DPP's candidate, Chen Shui-bian, personally showed up, as did Lien Chan of the KMT, while the rest sent their vice-presidential running mates. Chen gave the most rousing speech, and the audience gave him the loudest applause. Despite Chen's good show and the fact that the DPP traditionally has represented their interests, the unions refused to support him. In fact, they wound up endorsing no one.

Despite not getting official labor backing during the election, Chen is pushing through with major labor reforms, chief among them cutting mandatory working hours to 42 hours a week. He has also tabled a major social reform package, including raising social security benefits for the elderly. Also on his agenda is raising Taiwan's environmental protection standards and strictly enforcing existing environmental laws. But Chen is also coming to grips with reality. In order to remain competitive, Taiwan must not overregulate the private sector. After all, if it weren't for the support of some of Taiwan's major tycoons, it's doubtful that he would have been elected in the first place. "He's in a juggling act," says Linda Gail Arrigo, a founding member of the Democratic Progressive Party and a longtime political activist. "He's doing some things that are favorable to labor. But there's a question now on just how much he's going to compromise with business."

Lobbying by business groups has caused Chen's administration to back down on proposals to tax stock options, among other measures. Also, in order to avoid a budget deficit, Chen is mulling over cutting some of the social security benefits he promised during the campaign. One of his proposals on subsidized mortgages, originally intended for the working class, has been modified to target primarily the middle class, drawing criticism from organized labor. The chairman of a large Taiwan conglomerate says he is not surprised that Chen and the DPP have toned down their advocacy for the "little people." "Chen Shui-bian knows that he can't lose his economic advantage," says the tycoon. "If he loses that, he'll lose his main weapon in all cross-strait dealings." Wise words.

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