LOCAL GOVERNMENT, WELFARE, CORRUPTION AND TAXES IN TAIWAN

LOCAL GOVERNMENT IN TAIWAN

There are local councils, mayors and magistrates in Taiwan, mostly chosen in local elections. The government keeps lists of residents in every apartment and house in the entire country.

Local neighborhood bosses known as tiauaka, or pillars, have been a fixture of Taiwanese politics for some time. The target of vote buying schemes, they have traditionally been wined and dined by the parties in return for getting out the vote in their neighborhoods. In the past these leaders have sometimes gone house to house to personally deliver envelops with around $10 in cash and bags of the flavor enhancer MSG.

Capital: The capital of central administration of Taiwan is Taipei (T’ai-pei——literally, Taiwan North), located in T’ai-pei County in the north. Since 1967, Taipei has been administratively separate from Taiwan Province. Administrative divisions: includes main island of Taiwan plus smaller islands nearby and off coast of China's Fujian Province; Taiwan is divided into 14 counties (hsien, singular and plural), 3 municipalities (shih, singular and plural), and 5 special municipalities (chih-hsia-shih, singular and plural)

Counties: Changhua, Chiayi (county), Hsinchu (county), Hualien, Kinmen, Lienchiang, Miaoli, Nantou, Penghu, Pingtung, Taitung, Taoyuan, Yilan, Yunlin Municipalities: Chiayi (city), Hsinchu (city), Keelung (city). Special municipalities: Kaohsiung (city), New Taipei (city), Taichung (city), Tainan (city), Taipei (city).

Taiwan uses a variety of romanization systems; while a modified Wade-Giles system still dominates, the city of Taipei has adopted a Pinyin romanization for street and place names within its boundaries; other local authorities use different romanization systems.

Corruption in Taiwan

"Money politics" has long been a fixture of Taiwanese politics. Vote buying has traditionally been the most common form of corruption is Taiwan. Dozens of candidates have been prosecuted for vote buying (See Elections). In 2011, Citizen’s Congress Watch published a special report that stayed that legislators were among easiest groups to entice with bribes.

The Taiwan's Justice Ministry offered rewards of up to a half million dollars for information leading to the arrest of corrupt officials. One "ghostcatcher" collected enough money to but a new Mercedes.

According to Transparency International there are high levels of bribery by Taiwanese companies. There is also a fair amount of corruption involving foreign companies and Cambodia politicians. The French company Alacatel paid $300,000 in bribes to Taiwanese lawmakers in an attempt to snare a multi-million-dollar contact to produce high speed trains in Taiwan. A 1991 purchase of French warships involved millions of dollars of kickbacks.

See Chen Shui-ban, History

Corruption in the Judiciary in Taiwan

The arrest of three senior judges in 2010 spared debate over corruption in Taiwan. The Economist reported: “Rumours of corruption among the judiciary have long flourished in Taiwan. Yet the news on July 14th that three high-court judges and a prosecutor had been detained amid allegations that they took bribes to fix the outcome of a high-profile case, has brought public outrage to boiling point. On July 18th Taiwan's highest-level judicial official, Lai In-jaw, who is in charge of the island's supreme and lower courts chose to resign because of the outcry over the case. The government is hastily promising reforms. [Source: The Economist , July 22, 2010 \=\]

“The case is Taiwan's biggest judicial-corruption scandal in over a decade. It involves Ho Chih-hui, an ex-lawmaker with the ruling Kuomintang (now expelled from the party), who was convicted in 2006 by a lower court for taking kickbacks over the building of a science park. He was given a 19-year sentence. Following that, according to Taipei District Court documents, contacts of Mr Ho tried to bribe judges sitting in a higher court, in an attempt to buy his freedom. In May this year the judges did hand down a not-guilty verdict to Mr Ho, but on July 13th members of an anti-corruption task force stormed the homes and offices of the judges and prosecutor involved. The judicial officials could now each face a spell of ten years behind bars, if found guilty. Mr Ho is on the run. \=\

“For jaded Taiwanese observers the latest developments merely confirm long-held suspicions of graft in their insular and inscrutable judiciary. “The significance of this case is that it makes all the rumours a reality,” said Yang Tai-shuenn, a politics professor at Taipei's Chinese Culture University. “It will push the government to do something.” The country's president, Ma Ying-jeou, promptly decided that he needed to be seen to act. On July 20th he announced the formation of a new commission to battle corruption and vote-buying. Its 200 staff will enjoy police powers of search and arrest. “I am determined, absolutely determined, to create a clean government,” Mr Ma said. “Every public servant must understand that ethical principles cannot be violated or trampled on. I will not stand for a minority of corrupt officials destroying the image of government.” \=\

“In any case, complains the opposition Democratic Progressive Party (DPP), and various experts, such a commission will be toothless as long as it is nearly impossible to sack bad judges and prosecutors. An act calling for such a mechanism has long been stalled in parliament.

Corruption in the Judiciary Under Ma Ying-jeou

Among the scandals that most affected the administration of Ma Ying-jeou was corruption case involving former Executive Yuan secretary-general Lin Yi-shih. In June 2013, Ku Chung-hwa wrote in the Taipei Times, “ This was because the verdict handed down by the three Taipei District Court judges on April 30 was a blatant attempt to protect a corrupt official and get him off the hook. Under heavy pressure from the public, the Special Investigation Division of the Supreme Prosecutors’ Office appealed the sentence last month. In their legal brief, prosecutors said that the nation should not be turned into a haven for elected representatives to promote their own greedy interests while using the excuse they are “serving voters.” [Source: Ku Chung-hwa, Taipei Times, June 4, 2013]

“Indeed, the judges who presided over Lin’s first hearing believed he was exempt under the Anti-Corruption Act , because they said his lobbying actions had nothing to do with his official duties. This was even though he first served as the ruling Chinese Nationalist Party’s (KMT) caucus whip and then was promoted to Cabinet secretary-general, after failing to be re-elected. Even more ridiculous was the judges’ decision that the more than NT$30 million (US$1 million) in alleged bribes were “gifts” to Lin and that the money should therefore be returned to him. Such a verdict is tantamount to setting a recommended price for lobbying by legislators. They might as well put up a sign saying “price for lobbying” on the entrance to the legislature, and maybe even offer discounts to people who have more than one thing they need the help of a legislator to “settle.”

Taiwan's Vice Premier Quits Over $30 Million Missing from a Diplomatic Fund

In 2008, Taiwan's vice premier announced he would quit his job and resign from the ruling party to take responsibility for a scandal involving $30 million worth of missing secret diplomatic funds.Tsai Ting-I and Mark Magnier wrote in the Los Angeles Times, “Chiou I-jen's resignation followed his disclosure that he helped transfer the money to a Taiwanese middleman as part of an attempt to convince Papua New Guinea to drop its official recognition of China in favor of Taiwan. Since then, the middleman and the money have disappeared. "I feel deeply ashamed in the face of my country and people," Chiou said in a brief statement Monday. Prosecutors have blocked the presidential aide from leaving Taiwan pending a corruption investigation. [Source: Tsai Ting-I and Mark Magnier, Los Angeles Times, May 6, 2008 ^^]

“In 2006, Taiwan mounted an all-out effort to lure into its camp Papua New Guinea, which has had diplomatic relationships with China since 1976. According to local reports, senior members of Taiwanese President Chen Shui-bian's administration, including Chiou, authorized the middleman, named Ching Chi-ju, and an ethnic Chinese named Wu Shih-tsai to route the $30 million to Papua New Guinea for "technical aid programs." The money was deposited into a Singapore bank account held jointly by Wu and Ching. Taiwan and Papua New Guinea were not able to agree on terms, leading to a breakdown in negotiations within months. But the $30 million reportedly never made it to Papua New Guinea and was never recovered. ^^

“Wu has been blocked from leaving Taiwan and faced questioning. Press reports indicated there is only about $2,000 remaining in the Singapore account. The loss was only disclosed after a Singapore newspaper reported that legal proceedings were underway to recover the assets. The scandal has provoked anger and outrage. "This is a ridiculous situation involving a huge amount of money," said Lin Li-chen, 35, a clerk in Taipei. "There are lots of back-door practices, so I am not surprised this happened. But it's a sad story for Taiwan." While it's unclear whether Chiou's resignation will dampen the public fury, analysts said the scandal reveals deep-seated problems in Taiwan's government structure. ^^

“Those involved also apparently failed to follow basic safeguards, said Chen Chien-jen, former minister of foreign affairs. In the past, money wasn't wired into personal accounts or to a country before the official relationship was established, Chen said. "This shouldn't have happened," he added. "I guess the chance to get the money back is tiny," said Lo Chih-cheng, a professor at Taipei's Soochow University and a former planning official with the Foreign Ministry. "But we need to try and stop the money from ending up in anyone's personal pocket and to figure out who is responsible." ^^

Democratic Taiwan Versus Communist China on Corruption

In 2007, as the Chen Shui-ban family corruption scanda was unfolding, the former Chinese dissident Wei Jingsheng wrote on Global Viewpoint: “T Taiwanese President Chen Shui-Bian's wife has been accused of trading her influence for a few million yuan worth of jewelry, while his son-in-law is to be tried for tens of millions of yuan in illegal payments. In Mainland China, that is the petty level of corruption of a county official! Yet, utilizing their right to mobilize to “pull the emperor off his horse,” the citizens of Taiwan have taken to the streets to demand accountability and change. Regardless of whether they are from the “blue camp,” which wants unification with China, or the “green camp,” which wants independence, they are united in their anti-corruption stance. [Source: Wei Jingsheng. Global Viewpoint, Winter 2007, Wei Jingsheng, was imprisoned for 18 and a half years for his writings on "Democracy Wall." He was expelled from China in 1997 and now lives in exile in the United States. \^\]

“In Mainland China, it is a totally different scenario. It is commonly accepted that the relatives of current and former Communist Party officials have accumulated billions in payoffs or kickbacks from land development schemes or privatization of state companies. At the lower levels, local peasants or townspeople may complain about their land being sold from beneath them, or even once in a while demonstrate, in which case they are brutally suppressed in the name of “keeping order” by the same officials stealing them blind. \^\

“As citizens without rights, they have no means to hold officials accountable in a one-party dictatorship. No one needs to be reminded that the Tiananmen movement of 1989, which started as an anti-corruption campaign, was cruelly crushed by tanks and machine guns. With no means of legal recourse and facing the threat of a violent crackdown, people have no choice but to tolerate official corruption, which abounds without constraint. The result is worse than natural catastrophe: The wealth of the Chinese people earned through back-breaking labor in the factories and fields of the global economy is eaten up as if by locusts. Without democracy, they are defenseless against the predators of officialdom. \^\

In China, “when people see the words “anti-corruption,” they read “power struggle.” Anti-corruption campaigns from the top of a one-party system only amount to trimming tree branches that will grow back later, perhaps even fuller, under another regime of power. Corruption must be attacked at its roots. And that requires an active democratic culture, as we see in the streets of Taiwan today.” \^\

Taiwan Budget, Taxes and Welfare

Budget: revenues: $57.6 billion; expenditures: $64.62 billion (2012 est.). Budget surplus (+) or deficit (-): -1.5 percent of GDP (2012 est.), country comparison to the world: 69. Public debt: 36 percent of GDP (2012 est.), country comparison to the world: 100; 34.9 percent of GDP (2011 est.)

Taxes and other revenues: 12.1 percent of GDP (2012 est.), country comparison to the world: 203

Welfare: The government has offered a national health insurance program since 1995 through the National Health Insurance Bureau. Under this plan, employers pay 60 percent of the costs, employees 30 percent, and the government 10 percent. In 1984 the government established rules for the allocation and management of a then-new Workers’ Retirement Fund. The rules provide that a retiree is entitled to a maximum pension equal to 45 times his average wage in the six months prior to retirement. To ensure that workers receive this pension should their employer file for bankruptcy, the government also set up a Wage Arrears Repayment Fund to which all employers are required to contribute a small percentage of each employee’s salary. Since 1993, a monthly subsidy has been provided to all people 65 and older and to low-income families. In 2002 the government established a monthly pension of US$86 for residents 65 years or older who meet certain requirements. [Source: Library of Congress, March 2005]

New Wave of Charity in Taiwan

In 2010, Benjamin Yeh of AFP wrote: “After a life lived in frugality, former Taiwanese soldier Hu Shou-hung donated everything he had, the equivalent of 30,000 US dollars, to charity. The 88-year-old, who rents a shabby house in the small town of Hsinpu in the island's north, hit the headlines when he gave his life's savings to a veteran group to help orphans of deceased members, but he did not do it for fame. "Money should be given to those who badly need it. I'm old, and besides, the monthly subsidies provided by the government are enough to support my living," said Hu. He receives a military pension equal to about 420 US dollars a month. [Source: Benjamin Yeh, AFP, July 6, 2010 *^*]

“Hu is a representative of a new wave of charity in Taiwan where people who are not extraordinarily rich give away their money for those less fortunate. What is remarkable is they do it without expecting anything in return -- either celebrity status in this life or salvation in the next -- but simply to help others. Observers of this trend say it was set off by Chen Shu-chu, a vegetable vendor in her late 50s who donated 10 million Taiwan dollars (310,000 US dollars) to charity, much of it to orphaned children. She had been giving away money for years, but she only attracted attention -- in Taiwan and globally -- after Time magazine named her one of the world's 100 most influential people this year. "My decision was influenced by her," Hu said slowly as he turned off the radio, the only entertainment in his narrow living room, and stared pensively at the wall, where the paint was peeling off. "I've been thinking that since a woman like Chen Shu-chu is able to do a lot of good things, why can't I," he said, after a long pause. *^*

Chen, who was reluctantly turned into an overnight sensation by the island's media, has rekindled the interest in giving, charity groups said. Taipei-based United Way of Taiwan, which helps handicapped people among others, said that in some recent weeks it had seen the value of its irregular donations surge by more than one third to over 100,000 Taiwan dollars. "The point of Chen's story is that all of sudden many people found that even though they may not be rich, their tiny but persistent small donations may come as a great help to some people," said Hu Yu-fang of United Way. *^*

The fervour may cool down somewhat after Chen slides back into anonymity, but her impact will remain, charity groups said. "Chen is like a seed," said Phyllis Weng, a senior social worker of the Taiwan Fund for Children and Families in the central Taiwan city of Taichung."It has taken deep root in the hearts of many people. Her influence will be far-reaching." Chen, who was born to a poor family of eight people, has spent her entire life working 18-hour days while surviving on simple meals to amass the fortune that bit by bit has gone to charity. *^*

“While experts have been exploring the motivation behind her lifelong commitment to doing good, the media-shy philanthropist simply said: "I felt happy whenever I could help other people." "This is amazing and makes her deeds unique," said Chang Wei-an, a social scientist at the National Tsing Hua University. "Unlike a number of domestic groups who have reached out to the needy for salvation and other religious reasons, Chen has been doing this for nothing, and for 47 years." *^*

“Traditionally, people in Chinese communities have donated money in the belief they could redeem sins committed by themselves or their relatives. Others have done so for more mundane reasons, such as a chance to receive tax rebates from the government. Chen's motives are both simpler and deeper -- a wish to give back to the community -- and this has in fact acted as a guideline for Chinese people's behaviour for centuries, Chang said. "This way of thinking has prevailed at various social levels. It has been passed down from generation to generation through folklore and dramas, rather than from books," he said. *^*

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourism Bureau, Republic of China (Taiwan), Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated June 2015

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