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UK's role in Iraq helped lead to bombings: report

THE GUARDIAN , LONDON

Britain's involvement in the wars in Iraq and Afghanistan contributed to the terrorist attacks in London, a respected independent think tank on foreign affairs, the Chatham House organization, said yesterday.

According to the body, which includes leading academics and former civil servants among its members, the key problem in the UK for preventing terrorism is that the country is "riding as a pillion passenger with the United States in the war against terror."

It says Britain's ability to wage counter-terrorism measures has also been hampered because the US is always in the driving seat in deciding policy initiatives.

The report says the security services -- diverted by fighting the IRA over Northern Ireland and the rise of animal activists committing terrorist acts -- failed to give priority in the early 1990s to monitoring Islamist terror activists setting up in Britain, so "the British authorities did not fully appreciate the threat from al-Qaeda."

In the most politically sensitive finding, Chatham House, which used to be known as the Royal Institute of International Affairs, concludes that there is "no doubt" that the invasion of Iraq has "given a boost to the al-Qaeda network" in "propaganda, recruitment and fund raising," while providing an ideal targeting and training area for terrorists.

British Muslim women attend a vigil sponsored by the Anti- War Coalition in Russell Square in central London on Sunday.

"Riding pillion with a powerful ally has proved costly in terms of British and US military lives, Iraqi lives, military expenditure and the damage caused to the counterterrorism campaign."

This finding runs directly counter to the line from Downing Street, which has sought to detach Iraq from the London attacks.

On Saturday, Tony Blair said the fanatics who struck in London and launched other attacks around the world were driven by an "evil ideology" rather than opposition to any policy, and that it would be a "misunderstanding of a catastrophic order" to think that if we changed our behavior they would change theirs.

"Their cause is not founded on an injustice. It is founded on a belief, one whose fanaticism is such that it can't be moderated, can't be remedied. It has to be stood up to."

The dispute over the role of Iraq in the motivation of the bombers came as the debate grew over proposed new terror laws in Britain. The Tories will today offer Charles Clarke, the home secretary, the chance to speed up new terror laws, provided that the government delays proposals to revise the controversial control orders system for detaining suspect terrorists until next year.

David Davis, the shadow home secretary, will ask the government to bring forward full details of one of the most divisive parts of the new legislation -- the indirect incitement to terrorism offense -- by a month to September, so MPs and human rights groups such as Liberty can study them properly.

AIT official urges consensus on defense

CHINA TIES: While positive about the future of cross-strait relations, David Keegan said that Taiwan must maintain its defenses to be able to enter negotiations with Beijing

By Shih Hsiu-chuan

STAFF REPORTER

The deputy director of the American Institute in Taiwan (AIT) encouraged Taiwan's political parties to move beyond partisanship to advance their common interests in cross-strait defense and stability, and reaffirmed that the governments on two sides of the Taiwan Strait should pursue dialogue without preconditions as soon as possible.

David Keegan made the remarks yesterday while delivering a speech at a forum on East Asia Security held by the Foundation on International and Cross-Strait Studies.

Keegan indicated that AIT is somewhat upbeat about the cross-strait relationship.

"We believed that trends are now moving in a generally positive direction, and we are cautiously optimistic that Beijing and Taipei will be able to further ease tensions and resume pragmatic contacts on economic and technical issues," Keegan said.

"It is important for Taipei and Beijing to continue to take actions that will build trust between the two sides and lay a foundation for a political-level dialogue further in the future," he said.

David Keegan, deputy director of the American Institute in Taiwan (AIT), right, and Richard Bush, former AIT chairman and senior fellow and director of the Center for Northeast Asian Policy Studies at the Brookings Institution, left, attend a forum on East Asia Security held yesterday in Taipei.

Despite China's passage of the "Anti-Secession" Law, Keegan said that it has raised international awareness of the cross-strait issue and put pressure on Beijing to show some measure of goodwill toward Taiwan.

The recent China visits by Chinese Nationalist Party (KMT) Chairman Lien Chan and People First Party Chairman James Soong are only the first steps toward opening the channels of communication across the Strait, Keegan said.

He stressed that "we call on Beijing to follow up on these contacts with a dialogue with the democratically elected leaders of Taiwan. Beijing and Taipei should pursue dialogue without precondition as soon as possible."

Keegan said Premier Frank Hsieh's June 13 response to China's offers on direct flights, agriculture and tourism were creative and constructive signs.

"It seems that both sides are moving towards a compromise on priorities that would permit discussions on cargo and passenger charters flight simultaneously," he said.

Talking about the cross-strait military balance, Keegan said Taipei must maintain a defense that is an effective deterrent to reduce the chances of a cross-strait conflict.

"Taiwan cannot negotiate with China from a position of strength if Beijing calculates that it has the means to intimidate Taiwan at a time of its choosing," he said.

Since an agreement hasn't been reached on the country's defense budget, Keegan said that "the challenge for Taiwan's leaders is to move beyond partisanship to advocate common interests in cross-strait defense and stability."

Meanwhile, Mainland Affairs Council Chairman Joseph Wu, while giving a speech earlier yesterday, said that the impasse in cross-strait dialogue is because of the preconditions set by the Chinese government.

Taking the issue of direct links as an example, Wu cited Beijing's preconditions that Taiwan agree to the "one China" principle and the "1992 consensus." China also considers cross-strait direct flights as "domestic affair."

"These preconditions are not acceptable to us and prove that China is not ready to negotiate with Taiwan," Wu said.

"Based on the experience of negotiating the issue of Lunar [New Year] charter flights early this year, the Chinese will remove all preconditions if they are ready to talk," Wu said.

"It's not that Taiwan is not willing to talk about political issues with China. The problem is that we can't accept China's preconditions," he said.

While some have speculated that Beijing would exert its political manners more flexibly with its emerging economic power, Wu, however, said that, "When the Chinese are dealing with the Taiwan issue, they are extremely hawkish."

Despite China's hawkish manner, Wu said that the nation's approach would be to continue to use a spirit of goodwill and conciliation, promising that Taiwan will pursue peace and negotiations with China.

According to a recently published report on corporate incomes in Asia, Taiwanese workers received a net salary increase (income minus inflation) of only 0.8 percent last year -- the lowest increase among the 14 countries reviewed. India saw the highest increase in net income for office workers with a rise of 4.5 percent, followed by South Korea with 3.8 percent, China with 3.8 percent and Japan with 2.2 percent.

Actually, the sad condition of Taiwan's salary levels and the low net increase in salary are no longer news. In 2001, the cost of labor in the manufacturing sector fell by 2.6 percent, to US$5.70 an hour -- far behind the rate of US$8.09 an hour in South Korea and below Singapore's US$7.77 an hour (US Department of Labor figures).

The Electronic Engineering Times published figures from a study of the salaries of electrical engineers in Asia, which revealed that the average income for an electrical engineer in Taiwan in 2002 was US$18,540 per annum, an 18 percent drop from US$22,692 in 2001. In China, on the other hand, the average salary rose 16 percent from US$7,033 in 2001 to US$8,136 in 2002, and in South Korea from US$20,516 in 2001 to US$21,492 in 2002.

According to figures released by Taiwan's Directorate-General of Budget, Accounting and Statistics for the year to November last year, the average salary in the manufacturing sector over this period fell 2.9 percent from NT$38,010 in February to NT$36,905 in November. All these figures indicate that since Taiwan's "go west" policy was initiated in 1990, salaries in Taiwan have dropped and although they have been more stable in recent years, have not been immune to further dips.

Why is Taiwan the only country affected in this way? The reason is readily apparent and can be credited to the effect of factor price equalization. Because our economic level and national income are far ahead of China's, if our economies combine, then income, salary levels and economic growth in Taiwan will be pulled back. This was especially apparent after 2000 when the government's active promotion of a "go west" policy caused a mad rush to invest in China.

This had a significant impact on wages in Taiwan. At that time, the mantra of Taiwan's entrepreneurs was that "Taiwan labor was too expensive and hurt [our] bottom line." The consequent factory closures, redundancies and unemployment was a workers' nightmare and effectively dashed any hopes of pay increases.

Integration with the Chinese economy, with its low wages and land costs, also slowed the rate of Taiwan's economic growth and industrial upgrading. When we adopted the "three noes" policy toward China -- no contact, no negotiations, no compromise -- in the 1970s and 1980s, Taiwan was leading the four Asian Tigers in economic growth (average growth of 10.2 percent in the 1970s, compared with 9.6 percent for Singapore, 8.8 percent for South Korea; an average of 8.1 percent for the 1980s compared to 7.6 percent for South Korea and 7.2 percent for Singapore). But after Taiwan opened up investments in China, economic growth began to lose momentum, South Korea's GDP caught up with that of Taiwan and we became the weakest of the Asian Tigers. (Last year, South Korea's GDP per capita reached US$14,098, surpassing Taiwan's US$13,529. Singapore's figure for the same period was US$24,740.)

Why did Taiwan fall back so badly? The single most significant reason is its excessive investment in China, which brings excessive integration with the Chinese economy. Taiwan's investments in China have already exceeded US$200 billion. In contrast, South Korea has only invested US$20 billion in its neighbor. Even Japan has invested less than we have.

Keen observers have issued innumerable warnings to China-based Taiwanese businesspeople, asking the government to implement efficient management mechanisms for investing in China. They have opposed greater economic integration and disapproved of unconditional direct links that are devoid of the necessary regulatory apparatus.

After debating the issue of whether the "go west" policy has been beneficial to Taiwan, the answer is now becoming clear -- the "go west" policy has been responsible for an outflow of capital, talent and technology, has hindered economic growth, and the more we have "gone west," the worse the situation has become.

A recent editorial in the Chinese-language Economic Daily News -- a former strong proponent of the "go west" policy -- considered the "peaceful decline" of the US, Japanese and EU economies over the last 10 years, comparing it to China's "peaceful rising." It came to the conclusion that the US, Japan and Europe had experienced an outflow of capital, talent and technology which had weakened their development, undermining domestic investment, reducing demand and slowing momentum for economic growth. This had led to the weakening of the economy as a whole, kept unemployment high and even caused deflation. Isn't this exactly what people with a Taiwanese perspective have been warning the government about all along?