It takes no longer than 10 seconds of reading any newspaper to realise that Taiwan's president-elect Chen Shui-bian will need to guard very closely his words on relations with the mainland. Your correspondent is not a political commentator, however, and does not care to be. In his view, political shuffles are mostly hot air and waste that impede economic development but can do little to change its ultimate course. You have an anarchist on your hands, you see. So let's dispense with how the sabre-rattling will be resolved after rivers of ink are poured out to accommodate those who want to read what they will soon forget when events overtake it again. Elections have the same appeal as football matches. He scores, he wins, pass the peanuts. What the new president really needs to concern himself with when he gets down to his job is the inability of his government to balance its books. As the first chart shows, the Taiwanese Government has run a fiscal deficit averaging 4 per cent of gross domestic product over the past 10 years, and for the last two years it has got worse. It is now running at 6 per cent of GDP with every indication that it will get worse yet. It has pushed government debt up from less than 10 per cent of GDP 12 years ago to more than 30 per cent at present, if you include government enterprises and agencies. This is a conservative estimate. Add up those deficits over the past 10 years (they are exclusive of repayment of debt, which would make them greater) and you get to a figure nearer 35 per cent of GDP for the central government alone. The published figures look too low. It is all contrary to the trend in the rest of Asia. Most Asian governments are running deficits at the moment because of the financial crisis two years ago, but these are already declining. The big Asian fiscal debt binge occurred in the early 1980s and governments have generally learned their lesson since then. Not Taiwan. So what ails the policy-makers in Taipei? It is not defence expenditure, which accounted for 40 per cent of total government expenditure in the late 1960s but seems to be running at about only 15 per cent at the moment. It cannot be capital expenditure. There was a big drive to build up decaying infrastructure 12 years ago but it soon faded (after a few key contracts were let) and has since declined as a percentage of the total. Let's not use the big C word. There are plenty of hints of widespread corruption (oops, sorry) in Taiwan but your correspondent doesn't have the evidence and that cannot be all, or the rest of Asia would still suffer deficits easily as bad. It may just be the result of too blind an eye to tax evaders, and there is certainly some evidence of that with an economy that is still showing steady growth while revenues are declining at a record rate since the 1960s. Whatever it is, Mr Chen now has his job cut out.