Legislature passes casino amendment
　

JACKPOT: A representative of foreign investment company Amazing Holdings said that the controversial bill would help the economy as gambling is ‘recession-resistant’
　

By Flora Wang, Loa Iok-sin and Shelley Shan
STAFF REPORTERS
Tuesday, Jan 13, 2009, Page 1
　

Despite demonstrations outside the legislature, the Legislative Yuan yesterday approved an amendment to the Offshore Islands Development Act (離島建設條例), legalizing the operation of casinos on the nation’s outlying islands.

The 98 legislators present during the plenary session voted 72 to 26 in support of a proposed amendment by the Non-Partisan Solidarity Union (NPSU) that would allow the opening of casinos on islands like Kinmen, Matsu, Orchid Island and Green Island.

Gambling is illegal in Taiwan.

The amendment stipulated that local governments must hold a referendum before building casinos.

The referendums would only need to win support from more than half of the voters participating in the referendum.

The bill stipulated that casinos be located within international resorts that include an international hotel, tourism facilities, international conference halls and shopping malls.

Companies interested in building an international resort on any of the nation’s islands would need to apply to the Ministry of Transportation and Communications.
　

The legislature also approved another amendment to the act that would oblige the central government to set up a minimum fund of NT$30 billion (US$901 million) to improve the development of the islands.

After passage of the amendments, Chinese Nationalist Party (KMT) and NPSU legislators applauded the move, while Democratic Progressive Party legislators chanted: “Gambling cannot save the nation’s economy.”

NPSU Legislator Lin Pin-kun (林炳坤) told reporters that legalizing operation of casinos on the islands was necessary for the country to be “internationalized.”

KMT Legislator Wu Ching-chih (吳清池) said he cast an affirmative vote as a result of the caucus’ decision, but that he “was saddened” to see the bill pass.

DPP Spokesman Cheng Wen-tsang (鄭文燦) said the DPP regretted the passing of the bill and that the KMT should take responsibility for the consequences of opening casinos in the country.

Outside the legislature, a group of Buddhist monks and other activists demonstrated against the passage of the amendments.

“We are disappointed and upset about this result. Such a controversial issue should have been openly debated and decided by a nationwide referendum,” Buddhist master Shih Chao-hui (釋昭慧) told demonstrators. “Representatives for the Catholic and Protestant churches, as well as Buddhists in Taiwan, have stood up against casinos today. The KMT has apparently taken a hostile step against religious organizations in Taiwan.”

Aside from Shih, Archbishop of Taipei John Hung (洪山川) and a preacher from the Taiwan Presbyterian Church, Lu Chun-yi (盧俊義), also joined the protest. The protesters recited a sutra — usually recited at funerals to redeem the deceased from his or her sins — to wash away the sins that KMT lawmakers committed by passing the amendment, Shih said.

The religious groups were joined by other civic groups who wished to express their concern about the negative impact of casinos.

“The crime rate in Las Vegas went up 1.7 times after gambling was legalized,” Citizen Congress Watch executive director Ho Tsung-hsun (何宗勳) said. “Las Vegas is also the city with the highest suicide and divorce rates in the US.”

Green Party Taiwan Secretary-General Pan Han-shen (潘翰聲) said that casinos could become money-laundering centers. Hu Tzu-fei (胡姿妃), a junior at National Penghu University, said that building casinos was an appropriate development strategy for Penghu.

Penghu County is so far the most probable candidate for the country’s first casino resort.

“What benefits will casinos bring for Penghu residents?” Hu asked. “The water and electricity supply systems are incapable of supporting large-scale casino resorts."

“We don’t have a big enough airport, flights are often sold out, and the weather in Penghu is not all that good,” she said.

Instead, Hu said the islands should promote the tourism resources it already has, including its landscape, beaches and unique cultural sites.

She added that the windy climate and surrounding waters make Penghu an ideal place to for sailing.

“Why can’t we develop tourism without casinos?” she said.

Presidential Office Spokesman Wang Yu-chi (王郁琦) said yesterday that the establishment of casinos on outlying islands was one of President Ma Ying-jeou’s (馬英九) campaign promises.

Outlying islands have limited resources and face financial problems, Wang said.

Wang said that Ma’s support for the amendments was to back the removal of legal roadblocks, not an endorsement for casinos on Taiwan proper, at least not at the moment.

Whether outlying islands establish casinos is up to local governments to decide, Wang said.

Meanwhile, Cabinet Spokesman Su Jun-pin (蘇俊賓) said yesterday that the government would take into consideration the concerns of the opponents of the “casino clause” when it maps out plans to establish tourism zones with casinos in offshore islands in the future.

“The passage [of the casino clause] was merely a step to decriminalize gambling in outlying islands, which did not mean that the government is set to establish casino there,” Su said.

Su said that casinos on outlying islands would only be established alongside appropriate supportive measures to make sure the development did not disrupt public security, damage the interests of local residents as well as to local ecology and environment.

Penghu County Commissioner Wang Chien-fa (王乾發) said yesterday that the county was scheduled to hold a referendum in either April or May. Until then, the county government would inform and communicate with Penghu residents about any development ideas

Wang said the amendment only decriminalized gaming, meaning that gambling would not face criminal charges from legal authorities. However, the government must still stipulate rules to regulate casino owners.

The government must also ensure that bids for operational licenses are conducted in a transparent manner. All this preparatory work will take at least a year to finish, he said.

The passage of the amendment was seen as encouraging for international investors like Amazing Holdings, which has been working on the development for about eight years.

Company executive Michael Treanor said yesterday that the company was pleased the bill was finally passed.

Treanor said that his company’s development plan had passed an environmental impact review and secured construction permits for a five-star resort hotel. The amendment came at a good time, he said.

The global economic downturn notwithstanding, Treanor said that the gambling industry was “recession-resistant” and that market studies showed their projects were still viable. The company was confident it would be able to win the support of Penghu residents, Treanor said.

Meanwhile, Citizen Congress Watch executive director Ho Tsung-hsun (何宗勳) urged the Cabinet to ask the legislature reconsider the amendment, saying that if not the organization would stage a large parade before May 20 in protest against the bill.

　

Army’s purchase of PCs from China raises fears
　

‘SLACK’: More than 50 notebook computers were purchased from Dell’s China agent, a move that broke the rule against purchasing China-made equipment
　

By Rich Chang
STAFF REPORTER
Tuesday, Jan 13, 2009, Page 2

“Confidential information may have been leaked to China via those computers.”— Gao Jyh-peng, DPP legislator

A Democratic Progressive Party (DPP) legislator said yesterday the Army was using notebook computers made in China, which increased the risk that classified information could be leaked.

DPP Legislator Gao Jyh-peng (高志鵬) told a press conference that the Army had recently opened public bids for computer equipment, including 51 US Dell D630 notebook computers. He said the company that won the bid did not buy the notebooks from the Dell agent in Taiwan, but rather procured them from China and that Dell’s Chinese agent was responsible for servicing the notebooks.

“Before [this], police and government purchase projects all excluded Chinese-made computer products for security concerns. Now the Army has violated the regulations,” Gao said.

He said a report by the Mainland Affairs Council showed that China had recently completed an electronics communication security project known as “Project Golden Shield,” which, aside from its military applications, enables the government to monitor the public’s electronic communication activities.

“As a result of the Chinese government’s intimidation and seduction campaign, foreign companies could allow the Chinese to put hardware or software, such as Trojan horses, into computers to gather military secrets,” Gao said.

“Confidential information may have been leaked to China via those computers,” he said.

The lawmaker said that since President Ma Ying-jeou (馬英九) had begun advocating a “truce” between Taiwan and China, the military had become “slack.”

The latest incident showed that the military’s procurement and examination systems were flawed, Gao said, adding he had asked the Army to immediately stop using the computers and to launch an investigation against the military officials in charge of the procurement.

Crises give democracies the edge
　

By Sarah Cook
Tuesday, Jan 13, 2009, Page 8

‘A series of KMT summits with Chinese Communist Party (CCP) officials has further raised fears of back-door dealings on crucial economic questions and of Taiwanese officials stooping to the CCP’s level of non-transparency and manipulation.’

With rising unemployment and a sharp drop in exports, China and Taiwan are both facing economic recessions. But which government is better equipped to deal with the downturn?

Past experience has shown that the true test of governing systems is not when the economy is chugging along smoothly, but rather when it hits a bump in the road or comes to a screeching halt.

In a declining economic environment, democratic systems have been found to be more stable, flexible and well-equipped than their authoritarian counterparts to address such changing circumstances. Nevertheless, even in democracies, times of economic hardship can correspond to deteriorations in civil liberties, as politicians coming under fire from frustrated citizens seek to minimize criticism.

As two governments at opposite ends of the democratic-authoritarian spectrum, Taiwan and China are emerging as key case studies for how these complex dynamics play out this year. A brief look at the condition of core institutions — such as the media and law enforcement — at the end of last year, offered insight into how prepared the two societies are for successfully overcoming these challenges.

Beyond the worlds of business interactions and tourist attractions that outsiders most commonly encounter, China remains a one-party state governed by one of the world’s most repressive regimes. Despite playing host to the Olympics last year and making pledges years ago to improve human rights ahead of the Games, China’s leaders failed to institute significant democratic reforms or even gestures toward improved rights protection.

Instead, during the year, there was an evident backtracking when it came to core institutions and freedoms. The Communist Party tightened control over key elements of the judiciary, with courts refusing to even hear cases on issues of accountability based on “orders from above.” Among those rejected were lawsuits filed by parents of children killed in collapsed school buildings in Sichuan Province and made sick from melamine-tainted milk.

There were crackdowns on bloggers, human rights lawyers, petitioners and those seeking to protest during the Games. Of particular note was a nationwide escalated persecution of minorities. From Tibetans to Uighurs to Falun Gong adherents to “house church” Christians, thousands of believers found themselves facing an intensified campaign of arbitrary detention, labor camp sentences and, in some cases, death in custody.

At the end of the year, as it became evident that China’s economy would be pulled down along with the rest of the world, the authorities appeared to be preparing for further restrictions on freedom of expression and judicial independence. More than 100 signatories on the pro-democratic “Charter 08” have reportedly been detained or interrogated, while the head of China’s supreme court recently called on judges to prioritize “social stability” in their rulings.

The irony is that such orders tend to undermine social stability as people take to the streets in frustration because there is no independent court system to guarantee compensation or curb corruption.

Taiwan, by contrast, has distinguished itself globally over the past two decades by its achievements in becoming a fully fledged member of the community of democracies. With a free press, a generally protected right to free assembly, elected representatives and a well-developed judiciary, the Taiwanese polity has a wide range of self-corrective mechanisms in place to weather economic and political storms.

Nevertheless, recent months have also seen several incidents that indicate some of these key institutions are coming under pressure.

Restrictions on protesters and police violence during the visit of Chinese envoy Chen Yunlin (陳雲林), a perceived selectiveness in corruption prosecutions, suspicious circumstances of judges’ appointments to former president Chen Shui-bian’s (陳水扁) corruption case and proposed legislation that would enable program-by-program government scrutiny of public broadcasting have raised concerns both domestically and internationally that some of Taiwan’s hard-won democratic gains may be regressing.

A series of KMT summits with Chinese Communist Party (CCP) officials has further raised fears of back-door dealings on crucial economic questions and of Taiwanese officials stooping to the CCP’s level of non-transparency and manipulation.

But unlike in China, these events have triggered some of the “checks and balances” mechanisms common in democracies. The media have reported extensively on these incidents and the different viewpoints regarding them. Citizens and rights groups have lodged court complaints over police violence. A student-led civil disobedience movement has grown, demanding greater freedom of assembly. Opposition legislators are critiquing the proposed public broadcasting bill in the legislature.

That is why if the current administration responds positively to these efforts, taking a more inclusive approach to governance and safeguarding fundamental democratic features of transparency and the rule of law, then Taiwan would be well-poised to deal with the economic crisis.

China, on the other hand, is likely in for a rocky ride as nothing suggests the CCP is at all prepared to have a genuinely open conversation about the country’s future with the people it rules.

Sarah Cook is an Asia researcher at Freedom House. She is visiting Taiwan for today’s launch of Freedom in the World, the organization’s annual assessment of political rights and civil liberties around the world.

Preferential interest rates must go

Tuesday, Jan 13, 2009, Page 8

With the three-year floating postal savings interest rate dropping to 1.575 percent, the nation moved a step closer to zero interest rates.

Taiwan is about to witness another miracle ­— the lower rates will not have the slightest impact on 400,000 retired military personnel, civil servants and public school teachers who all enjoy an 18 percent preferential interest rate on their retirement funds.

This may be an old issue, but it is still certain to make the nation’s millions of laborers angry at being treated as second-class citizens. Maybe even the military personnel, civil servants and teachers will feel unease at being included in an unjust system.

There is of course a reason for the preferential interest rate. In the past, salaries for military personnel, civil servants and teachers were low and the economic environment at the time led the government to encourage saving to accumulate capital for industrial development.

Today, salaries of military personnel, civil servants and teachers have increased substantially, while the conditions for retirement are now vastly different, which means there is no longer a need for the government to care for them the same way it did in the past. Banks now also have sufficient capital. Given this situation, system reform based on a concern for the national finances, fairness and justice becomes necessary.

The government must of course take an all-encompassing view of this situation and make comprehensive adjustments that consider both fairness and equality, so that the gap between the welfare of civil servants and other members of the public does not become too wide.

We have no intention of criticizing retired government employees who receive the preferential rate. In the past, this scheme was necessary, but today, 25 years later, it remains unchanged and requires thorough reform.

Moreover, primary and secondary school teachers and military personnel don’t have to pay taxes. This practice has been discussed for years, both by the legislature and the general public, but no conclusion has been reached. As in the case of the 18 percent interest rate, the government does not want to offend civil servants. The Chinese Nationalist Party (KMT) has taken good care of them, and by comparison, the welfare of laborers, farmers, Aborigines and other disadvantaged groups has been neglected, with some having difficulty making ends meet.

It is precisely these groups that have to bear the brunt as the global economic slowdown hits Taiwan.

If President Ma Ying-jeou (馬英九) really cares about the general public, he should direct all efforts toward reform of these unreasonable and outdated systems so that government resources are spent on those who need it.

Over the past eight years, the government’s reform of welfare measures was repeatedly obstructed by the KMT’s legislative majority. Today, Ma and the KMT enjoy absolute power with more than two-thirds of all legislative seats and reform would be as easy as pie.

Statistics show that the government will spend almost NT$80 billion (US$2.4 billion) on the 18 percent preferential interest rate this year, or as much as the consumer voucher scheme. This shows the unreasonable distribution of public welfare. The government’s attentiveness to retired military personnel, civil servants and teachers must be adjusted with the times. It must not remain unchanged and give rise to irregularities, of which the 18 percent preferential interest rate is one.

Ma has full responsibility for doing this. He should at least consider the national finances, the changing international economic situation and social fairness, and show his determination to reform the system for the sake of the public.

Hu and Ma must hear voice of the Taiwanese
　

By Lin Cheng-yi 林正義
Tuesday, Jan 13, 2009, Page 8

The six proposals on Taiwan put forward by Chinese President Hu Jintao (胡錦濤) on Dec. 31 clearly excluded any US participation in relations between China and Taiwan.

“The Chinese people on both sides of the Taiwan Strait have the ability and the wisdom to hold the future of cross-strait relations in their own hands,” Hu said. “Resolving the Taiwan question and completing the task of national unification are internal matters for China and are not subject to interference by any foreign power.”

Beijing feels it no longer needs to concede to Chinese-US “joint management” of the Taiwan Strait. Instead, it has decided that cross-strait affairs can be managed by China and Taiwan, with the Chinese Communist Party (CCP) playing the leading role.

China has announced that warships it has sent to patrol sea-lanes and combat piracy off the coast of Somalia may escort and protect Taiwanese as well as Chinese merchant vessels, while Hu has instructed Chinese embassies to strengthen their relations with overseas Taiwanese. These moves clearly show China’s intent to domesticate Taiwan.

Hu’s six proposals were also meant to win over international public opinion, assuring the world that unification between China and Taiwan “will not harm the interests of any country — it will only promote prosperity and stability in the Asia-Pacific region and the whole world.”

Beijing is now much more confident about eventual unification than it was during the eight years of the former Democratic Progressive Party government and its recent words and actions cast doubts on President Ma Ying-jeou’s (馬英九) “no unification” strategy.

In view of Taiwanese public opinion, Hu is clearly over optimistic. In 27 surveys carried out by the Mainland Affairs Council between 2000 and last year, the majority of respondents in each case were in favor of maintaining the cross-strait “status quo.” Since Ma’s Chinese Nationalist Party (KMT) was returned to office, more people than ever hold this view, while those calling for quick unification still account for just 2 percent.

While Hu’s six points seek to put China in charge of cross-strait relations, the incoming administration of US president-elect Barack Obama will reiterate that any change must be agreed to by the Taiwanese people. The outgoing administration of US President George W. Bush has said the division across the Taiwan Strait must be resolved peacefully by the people on both sides. In comparison, the US Democratic Party’s electoral platform put more emphasis on the will of the Taiwanese, saying that the US “will continue to support a peaceful resolution of cross-strait issues that is consistent with the wishes and best interests of the people of Taiwan.”

Taipei and Beijing have now entered a period of close consultation and negotiations, but the public should not allow a situation where the KMT and CCP decide everything between them without regard for the dissenting voices in Taiwan.

Taiwan must be able to join international organizations as a member or observer, not just take part in activities. Its membership and participation should not depend on it accepting the “one China” principle, or be entirely arranged by China like an act of charity.

In his six points, Hu laid excessive stress on the goal of unification. In doing so, he forgot something that his predecessor Jiang Zemin (江澤民) said in his eight points of 1995 — that the Taiwanese people’s “desire to be masters of their own country should be fully respected.”

Lin Cheng-yi is a research fellow at the Institute of European and American Studies at Academia Sinica.