Taiwan President Tsai Ing-wen under midterm pressure over wages and pensions

Economic reforms required what she called ‘painful but necessary’ cuts, but voters are split over effectiveness with many impatient to see the benefits

PUBLISHED : Friday, 18 May, 2018, 1:56pm
UPDATED : Friday, 18 May, 2018, 9:30pm

As Taiwan’s President Tsai Ing-wen reaches the halfway mark in her first term on Sunday, she is under growing pressure from a public tired of economic stagnation but critical of her reform efforts.

An increasingly aggressive Beijing is tightening the screws on Taiwan diplomatically and sabre-rattling with military drills, but the biggest protests in Taipei in recent months have not been about mainland China, which had triggered mass rallies in the past.

Instead, thousands of military veterans and other civil servants have regularly gathered outside parliament in emotive displays against pension cuts.

The rallies have included physical attacks on journalists and the death of a retired colonel, who fell from a wall during a protest.

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Tsai has labelled the cuts “painful but necessary” to prevent public-sector pension schemes from collapsing and dragging down government finances.

Some pension funds could go bankrupt as early as 2020 if the system is not overhauled, the government has warned.

Tsai has said she will press ahead with reforms, arguing the public will see benefits over time.

Her moves to revise labour laws, including scaling back public holidays, have also touched a nerve in Taiwan, where salaries have risen little since the 1990s.

Taiwan military veterans try to storm parliament in pensions protest

“The government has many loud slogans but the policies and reforms have not been well executed and that lowers public confidence in them,” said NGO worker Wu Cheng-cheng, 28.

When Tsai took office in May 2016, her approval rating stood at 70 per cent, with wage hikes and improved working conditions part of her election pledge.

Her popularity has since waned, with the economy topping the list of public gripes.

A recent poll by local broadcaster TVBS put her approval rating as low as 26 per cent, although other surveys found it to be over 50 per cent.

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Andie Huang, a 36-year-old office worker, believes Tsai should “stick to what she’s doing” but hopes for better treatment of workers.

“Our salaries are low and commodity prices are high,” she told Agence France-Presse. “We can’t afford to buy houses.”

Taiwan’s economy is estimated to have grown 3.04 per cent year-on-year in the first quarter this year, but analysts say the data means little to regular people who are struggling to make ends meet as the cost of living soars.

Labour groups blame companies for being unwilling to raise salaries and share profits.

Taiwan’s legal minimum monthly wage stands at NT$22,000 (US$735) compared with NT$15,840 two decades ago.

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Young voters like Carter Chen, 21, question whether Tsai can fulfil her promises to boost the economy for ordinary people.

He says his own daily life issues far outweigh any concern over Taiwan’s political relations with Beijing, which have deteriorated under the Beijing-sceptic Tsai and often grab headlines.

While self-governing democratic Taiwan sees itself as a sovereign country, Beijing views it as part of its territory to be reunified, by force if necessary.

“Right now many young people can’t even make a decent living,” Chen said, referring to the NT$25,000 starting monthly salary for college graduates, which has remained flat for around two decades.

“I don’t have the time and energy to worry about unification, independence or sovereignty issues.”

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However, some still believe better ties with Beijing are vital to prosperity because Taiwan’s export-driven economy relies on mainland business.

“The most important thing is to boost the economy, and to do that we have to be on friendly terms with China,” said Chen Bo-lin, 41, who works for a state-owned company.

The opposition Kuomintang (KMT) party is still on the back foot after a disastrous election in 2016, in which it lost both the presidency and its majority in parliament, but observers say Tsai needs to be careful economic woes do not spark its resurgence.

The main challenge in the remainder of her term will be to “deliver measurable improvements to the economy and ease public discontent” so as not to give fuel to the KMT, said Meng Chih-cheng, a political scientist at National Cheng Kung University.

Brawl in Taiwan parliament as MPs turn militant in debate over military pension cuts

Local elections in November will be a major test. If Tsai’s Democratic Progressive Party (DPP) fails to perform well, some analysts say the party may consider fielding a different candidate for the 2020 presidential election.

But Dafydd Fell, director of the Centre of Taiwan Studies at London’s School of Oriental and African Studies, said moves such as pension reform have been a brave step that previous governments failed to tackle.

He described Tsai’s performance as “mixed” but said she was not at risk of becoming a lame-duck president.

“Her key challenge for 2020 will be to complete many of the reforms she has started or promised, so that she can make the argument that she deserves re-election,” Fell said.