*These are the remarks as prepared by Richard Bush for “Difficult Choices: Building Taiwan’s Resilience for an Uncertain Future.” These remarks were abridged for time during the event. A transcript of his remarks on March 22 is available below.
“Bush, an authority on all things Taiwan, presents a detailed and comprehensive account of Taiwan’s transformation from a dictatorship to a wealthy democracy that needs to balance security and prosperity amidst a growing external threat.”
Syaru Shirley Lin, “Review of Difficult Choices: Taiwan’s Quest for Security and the Good Life,” Foreign Affairs, April 20, 2021. Read the full review.
It is a great pleasure to speak to you today in person. I have not been in Taiwan since October 2019 so am very happy to be here. I am very grateful to Shirley Lin, Harry Harding, and the entire CAPRI staff for making this program possible, and thank you Professor Yeh and the National Taiwan University College of Law for co-sponsoring the event and giving me the opportunity to talk about some of the themes in my book, Difficult Choices.
I wrote the book to try to explain a puzzle about Taiwan’s political system. At least it was a puzzle to me. On the one hand, Taiwan’s democracy gets high marks around the world. American politicians express effusive praise for your political system, in contrast how they see the PRC system. Scholars are positive too.
On the other hand, here in Taiwan there are intense and sometimes polarized debates on whether the government is doing a good job, that is, whether the people’s elected representatives are doing what the people want. A number of policy issues are highly contested. With each transfer of power, policy can swing like a pendulum. Some policy problems never get resolved at all. To put it simply, Taiwan’s democratic process is more impressive than the government’s performance.
You might ask, why should I, an American, presume to comment on Taiwan’s political system? It’s a good question. My answer would be, first, that I have learned a few things about your democracy since the transition from authoritarianism began in the mid-1980s. Second, even if the American system may be failing, I can still hope that Taiwan will succeed. I really want Taiwan to succeed, despite and because of the tough challenges before it. Third, if there comes a day when the people of Taiwan have to make a fundamental choice about their long-term future, it is vitally important that this choice be made democratically, in accordance with the ROC constitution, and that it be a smart choice. But the political system’s performance so far on issues less existential than the long-term future suggests that making smart choices democratically is not easy here.
In order to elaborate on this puzzle, I’m going to discuss governance and politics concerning four issues: the government budget, public health, energy security, and conscription, with some comments on cross-Strait relations.
The first is the government budget. Now I know what you are thinking: “The government budget? How boring!” But think about it. When your government formulates the budget – both spending and revenues – it must balance the conflicting interests and needs of the whole society. The budget must reflect choices about policy priorities, such as the economy, the elderly, education, defense, and so on. Moreover, annual budget-making can be a response to changing circumstances, such as the current demographic transition.
So I would like to show you a series of slides on how much of the total government budget (central and local) that went for various categories from 2012 to 2021. Both the level of each curve and the slope are important.
Although spending on social welfare and spending on the economy jumped up in 2020, the main trend is that there has been very little change in budget shares. Different ministries and agencies seek to preserve their share of the pie and different political constituencies lobby for the budget categories that benefit them most. The elderly want their pensions and health care. Local governments and corporations favor economic development. Civil society groups promote causes like environmental protection.
You can see some of the choices at play here: economic growth vs. social equity; economic growth vs. the needs of the young and the elderly; domestic priorities vs defense. Balancing priorities is not easy for officials and politicians.
Yet the basic problem here, I think, is that the government doesn’t have enough resources to meet the growing policy challenges before it. This reflects another difficult choice, between lower taxes and higher taxes.
Here is a graph that shows the percentage of GDP that the government extracts in taxes. From the late Ma administration, the share has moved up very gradually. The low point was 11.60 percent in 2013. The high point was 13.24 percent last year. But even 13.24 percent of GDP is actually low for an advanced economy.
There may be a change underway. The amount of tax revenue in 2021 was 60 percent higher than it was in 2012.
Still, Taiwan is a pretty wealthy country. There is probably room to increase tax revenues to free up resources for higher spending levels. Many people will be opposed, But there is also an argument for increasing tax resources to cover the rising costs of elder care and defense.
So the government budget isn’t so boring after all, is it? It is a mirror on politics in action, and in a comprehensive way.
The issue of resources is germane to my second topic – public health – and the challenges that officials and politicians face in making tough choices on hard issues. Taiwan’s system has a number of advantages:
Still, there are aspects of routine health care that could be improved. The main one concerns the rapid demographic transition, one consequence of which is a rise in the incidence of non-communicable diseases, especially for the elderly. Those diseases now account for about 80 percent of all deaths. Cancer, cardiovascular illness, and dementia can be very expensive to treat.
This transition will increase the demand for health services and for health care workers, just at time when shortages of doctors and nurses are growing. Although Taiwan’s system is sound financially, medical staff are reportedly burdened by a growing workload. And this could affect the quality of care if doctors are too busy to spend enough time with each patient.
The growing prevalence of chronic diseases like dementia exposes the need for a system of long-term care. If Taiwan creates such a system, it should be well financed and staffed by dedicated competent, and caring people staff.
The bottom line is that even though Taiwan created an efficient and solvent single-payer system back in the 1990s, gaps still emerged, mainly as a result of the aging society. To fill those gaps, spending on health care will have to increase. But the working age population that will have to underwrite that spending is shrinking in size relative to the size of older cohorts who will get most of the care. There are no easy answers to reconciling these competing priorities. Fortunately, it is my impression that health care has not become an excessively political issue – so far.
My third example of “difficult choices” is energy security. Here the problem is less one of resources and more one of the conflicting priorities in energy policy and how different political forces compete to advance their own priorities. They often block, or veto, the proposals of other groups, leading to policy gridlock.
As you know, President Tsai’s proposal has been to 1) terminate nuclear power, 2) substantially increase use of natural gas, 3) build up renewables like wind and solar, and 4) thereby reduce reliance on oil and coal.
There is a logic to this proposal. But problems have emerged as it has been implemented:
To sum up, there are different options for Taiwan’s energy mix that would reduce the burning of coal and oil. There are problems and risk associated with each policy approach that would have to be managed.
Moreover, political forces can block what they oppose but complicate the effort to formulate a solution that is “good enough” for all concerned. The net result may be that coal and oil will continue to occupy a significant share of the energy mix.
I will now address the issue of Taiwan’s security, and the duty of citizens to do their part to keep the society safe. This is the issue of military service – by volunteers and conscripts.
You know the context of this issue as well as I do. I don’t believe that war is likely in the near term. PRC leaders understand that a full-scale war would be very risky and probably lead to intervention by the United States. That is why they engage in coercion, an intermediate option that is lower risk but still has a chance of success in the long-term.
But a cross-Strait military conflict is possible, and the Taiwan government, among other things, might increase conscription, requiring many young people to join the armed forces.
This would probably occur because PRC leaders perceive – or misperceive – that a Taiwan leader is taking clear, deliberate, and irreversible steps toward Taiwan independence. They would then believe that they have no choice but to launch a major military campaign against Taiwan. You will have noted that I touched on the possibility that Beijing might act on the basis of its misperceptions, not reality. That could be a serious problem.
The risk of a military of conflict is not zero. Therefore, Taiwan and America must prepare for the possibility that war might happen. Our shared goal should be to reduce the risk that war will break out. The stakes are very high. If the PLA were to win, life as Taiwan people know it will disappear. Just look at Hong Kong.
One way to reduce the risk of conflict is to credibly reassure Beijing that Taiwan will not cross its red line. President Ma succeeded doing in that, and Beijing was prepared to improve cross-Strait relations up to a point. President Tsai has tried reassurance, but the PRC apparently was not willing to coexist with her administration. The United States has consistently said that it does not support Taiwan independence, but Beijing has repeatedly asserted that this is an empty promise, in view of our increasing support for Taiwan.
Another way Taipei and Washington can reduce the risk of an attack is to create such effective obstacles to a PLA campaign that PRC leaders would decide not to undertake an attack in the first place. That is, we can enhance deterrence.
Part of deterrence is that Taiwan has enough well-trained soldiers to effectively resist a PLA invasion for the time it takes for U.S. armed forces to enter the fight – over a month it is estimated – and so dissuade Beijing from starting the fight in the first place. The danger is that the Taiwan military doesn’t have enough soldiers to defend the landing beaches and stop the PLA, whose forces are likely to be much larger. Can Taiwan take the chance that a relatively small force will be sufficient to defend the island? Or should it play it safer and build a force that may be larger than what might actually be needed but one that will better enhance deterrence?
Also, the defending force must be well trained, otherwise it will not induce sufficient restraint on the other side. Different kinds of training are involved. Learning how to use and maintain weapons. Learning how to operate in small units. Learning how to operate in larger formations – how to defend the beaches, the lowlands, and large cities. And so on.
Strengthening the reserves is also a good step, because if they are well trained, they will expand Taiwan’s strategic endurance.
Understandably, expanding and training a larger fighting force is politically controversial. Young people don’t want to interrupt their careers and be placed in danger. Their parents don’t want to see that either. The two major political parties have a history of competing to reduce the obligation of young people to serve in the military. Neither has been willing to radically increase the defense budget.
But the time may have come when Taiwan has no choice but to set politics aside and craft a consensus that a stronger military is needed, in order to deter war. The Tsai administration has increased the absolute size of defense budget. Of course, those citizens who must sacrifice their time and maybe their lives to defend Taiwan will need to be confident that political leaders will do everything to avoid war even as they preserve Taiwan’s unique character. But the stakes are becoming too high not to make the tough choices on these issues.
To conclude, I will make a few observations about politics, which, as you know, intrudes into every issue of public policy. That is what we should expect in a democracy.
You may have noticed, however, that politics intrudes to different degrees and in different ways, depending on the issue. Concerning the government budget, most of the decisions are made within the Executive Yuan. For the most part, health care is also an inside game. But someday when it is necessary to increase taxes, loud complaints and opposition are likely.
But there are other issues where the politics are much more public.
On energy policy, different actors have different and conflicting interests and are often vocal in articulating them. Conservation groups have managed to slow down the transition to renewables. The anti-nuclear movement seems to have won its fight. So far it has been impossible to forge an optimal, balanced, and enduring policy consensus that includes a significant reduction in greenhouse gases.
Conscription is not yet a major issue, but it could become one. Taiwan’s young people have demonstrated great skill in the arts of twenty-first century protest, such as the Sunflower Movement.
Of course, conscription is embedded in the larger issue of cross-Strait relations, which is a highly polarizing issue. It divides people according to party affiliation, social class, economic interests, age cohort, and competing historical memories. Disagreements over cross-Strait relations have helped stimulate Taiwan’s protest culture that works to block what is opposes rather than fostering policies that a majority of the public can support.
I understand that one possible reason for the protests is that elements of the public have lost confidence in the institutions of representative democracy that were established in the constitution. The constitution also guarantees freedom of expression and freedom of assembly. It also authorizes referendums. But there can come a point that the exercise of these mechanisms of direct democracy undermines the ability of legislators, whom the people have elected, to do their job. The result is sometimes gridlock.
Now some of the dissatisfaction with the institutions of representative democracy may indeed be justified. If so, it is up to those institutions to reform themselves and improve their performance, and so win back the people’s trust. In return, the public and civil society should perhaps give those institutions the flexibility they need to formulate policies that enjoy public support.
What might be done to improve matters? The one idea I would suggest today is that Taiwan’s political leaders come together and use their creative skills to make the difficult choices.
It is easy for me to offer this advice, especially because I live far, far away. But the people of Taiwan deserve strong leadership from their leaders.
To make my suggestion more specific, let me identify several principles that the KMT and the DPP and other parties might enunciate together to demonstrate the kind of unity that I have in mind:
There may come a day when the people of Taiwan must make a fundamental choice about their long-term future. If that happens, it is vitally important that this choice be made democratically, so that the people have their say. That choice should be made in accordance with the ROC constitution. And it must be a smart choice, crafted by this society’s best minds and based on the best interests of the population at large. Making a smart choice is not always easy for a democracy to do, but in this case, it is a necessity.
Thank you for your attention. If you are interested in more of my thoughts on all of these issues, a longer version of my talk today is available on the CAPRI website.
CAPRI’s first Taiwan-focused public event took place on March 22, 2023, featuring Dr. Richard Bush, a senior fellow at the Brookings Institution and former chairman of the American Institute in Taiwan. After opening remarks by CAPRI Chair Syaru Shirley Lin and National Taiwan University Chair Professor Jiunn-rong Yeh, Dr. Bush addressed an audience of over 200 people from academia, the private sector, and civil society at the National Taiwan University College of Law. Many students from National Taiwan University, National Chengchi University, and other schools were also in attendance.
Dr. Bush focused on themes in his recent book, Difficult Choices: Taiwan’s Quest for Security and the Good Life, and the challenges Taiwan faces in balancing competing priorities when formulating policy. Both the government and the people of Taiwan face decisions regarding economic growth versus social equity, economic growth versus the needs of the youth and the elderly, and domestic priorities versus defense. “If there comes a day when the people of Taiwan have to make a fundamental choice about their long-term future, it is vitally important that this choice be made democratically, in accordance with the ROC constitution, and that it be a smart choice,” said Dr. Bush. (Scroll down to read his full remarks.)
After the presentation, students in the audience asked Dr. Bush about the state of Taiwan’s democracy, how the island can bolster its support from international friends, and whether the international environment for the Asia Pacific mirrors the past experiences of Europe and other regions.
The second half of the program opened with Dr. Bush’s comments on an audience poll conducted during the event about the performance of Taiwan’s democracy and policy issues such as conscription, energy prices, and the ability of the government to deliver on economic, social, and political issues. View the results here.
Prof. Alicia García Herrero then started the panel discussion by highlighting how Taiwan can be a leader in Asia in economic growth and promoting civil society. She said, “Taiwan has the chance to do this because it has the fiscal means,” noting that Taiwan’s public debt is among the lowest in the region.
Enoch Wu spoke about enhancing Taiwan’s defense and instilling a sense of community and national service in Taiwan through the conscription program. “Done right, national service can build solidarity and strengthen democracy,” he said.
Prof. Jiunn-rong Yeh concluded the panel by calling on Taiwan’s people and policymakers to commit to addressing the complex issues it faces. “Whereas some countries can dig into the ground to find resources,” said Prof. Yeh, “the Taiwanese must dig into their minds to find solutions.”
Dr. Bush wrapped up the event with his reflections on Taiwan’s future, noting that the island’s young people have much to contribute, but the government must remove current social and economic obstacles to their success. He commented that Taiwan should not be treated as a lever in strategic competition in the global arena.
Non-Resident Senior Fellow, Brookings Institution
Former Chairman and Managing Director, American Institute in Taiwan
Richard Bush is a Non-Resident Senior Fellow at the Brookings Institution. He specializes in the East Asia region, particularly China and Taiwan.
Dr. Bush served for nineteen years in the U.S. government, first on the staff of the Committee on Foreign Affairs of the House of Representatives (1983-1995); as National Intelligence Officer for East Asia and member of the National Intelligence Council (1995-97); and then as Chairman and Managing Director of the American Institute in Taiwan, the instrumentality through which the U.S. government conducts substantive relations with Taiwan in the absence of diplomatic relations (1997-2002).
Dr. Bush joined The Brookings Institution in 2002 as a Senior Fellow and Director of the Center for Northeast Asia Policy Studies. He has held the Michael H. Armacost Chair and the Chen-fu and Cecilia Yen Koo Chair in Taiwan Studies. While at Brookings he published At Cross Purposes: U.S.-Taiwan Relations, 1942-2000; Untying the Knot: Making Peace in the Taiwan Strait; A War Like No Other: The Truth About China’s Challenge to America (co-authored with Michael O’Hanlon); The Perils of Proximity: China-Japan Security Relations; Uncharted Strait: The Future of China-Taiwan Relations; Hong Kong in the Shadow of China: Living with the Leviathan. In April 2021, the Brookings Institution Press published his Difficult Choices: Taiwan’s Quest for Security and the Good Life.
Richard Bush received his undergraduate education at Lawrence University in Appleton, Wisconsin. He did his graduate work in political science at Columbia University, getting an M.A. in 1973 and his Ph.D. in 1978. He retired from Brookings in March 2020.
Senior Fellow, Bruegel
Chief Economist for Asia Pacific, Natixis
Adjunct Professor, the Hong Kong University of Science and Technology
Alicia García Herrero is the Chief Economist for Asia Pacific at Natixis. She is also the Director, Center for Asia-Pacific Resilience and Innovation (CAPRI). Alicia serves as Senior Fellow at the Brussels-based European think-tank BRUEGEL and a non-resident Senior Fellow at the East Asian Institute (EAI) of the National University Singapore (NUS). Alicia is also Adjunct Professor at the Hong Kong University of Science and Technology. Finally, Alicia is a Member of the Council of Advisors on Economic Affairs to the Spanish Government and an advisor to the Hong Kong Monetary Authority’s research arm (HKIMR) among other advisory and teaching positions.
Alicia is very active in international media (BBC, Bloomberg, CNBC and CNN) as well as social media (LinkedIn and Twitter). As a recognition, Alicia was included in the TOP Voices in Economy and Finance by LinkedIn in 2017 and #6 Top Social Media leaders by Refinitiv in 2020.
Director, Forward Alliance
Enoch Wu is the Founder and Executive Director of Forward Alliance, a Taiwanese NGO focusing on national security and civic engagement. Forward Alliance’s flagship program provides crisis response training for its volunteer corps, empowering citizens to play a direct role in enhancing Taiwan’s resilience.
Mr. Wu served on Taiwan’s National Security Council from 2017 to 2019. His portfolio included homeland security and critical infrastructure protection. Before joining the National Security Council, Mr. Wu led an Executive Yuan interagency task force, under the direction of Premier Lin Chuan, to review Taiwan’s protective security policies for government affairs.
Earlier in his career, Mr. Wu spent a decade in the financial industry, working primarily for Goldman Sachs in Hong Kong. Mr. Wu graduated from Yale University with a B.A. in economics. He is a reserve NCO under the R.O.C. (Taiwan) Army Special Forces Command.
Chair Professor, National Taiwan University
Professor Jiunn-rong Yeh is National Taiwan University Chair Professor. He holds JSD degree from Yale Law School and has researched and taught intensively on the process of constitutional change, globalization and regulatory theories, and environmental sustainability with rich contextual underpinnings. Professor Yeh has held visiting teaching positions in many major foreign institutions, including Duke, Columbia, Toronto, Harvard, Melbourne. He was named Distinguished Visiting Faculty 2000-2001 by the Faculty of Law, University of Toronto, where he taught Transformative Constitutionalism in East Asia in Fall 2000. He was appointed by the Melbourne Law School as Professorial Fellow. Professor Yeh also held many ministerial positions in the government. He was Ministers of Education and the Interior in the cabinet of Taiwan. He was a primary designer of Taiwan’s government reform and drafter of several fundamental legislative bills and involved heavily in constitutional revisions in the context of Taiwan’s government reform and democratic transition. He received Award of Excellence in Research from National Science Council and was appointed as a university chair professor of National Taiwan University. Professor Yeh’s recent publications include The Constitution of Taiwan: A Contextual Analysis (Hart Publishing, 2016), Asian Courts in Context (Cambridge University Press, 2015)
It is a great pleasure to speak to you today in person. I have not been in Taiwan since October 2019, so I am very happy to be here. I am very grateful to Shirley Lin, Harry Harding, and the entire CAPRI staff for making this program possible and thank you Professor Yeh and the National Taiwan University College of Law for co-sponsoring the event and giving me the opportunity to talk about some of the themes in my book, Difficult Choices.
I am also pleased to spend a few days in a place like Taiwan, where voters readily accept the results of their elections. In the United States, by contrast, nearly one-third of Americans and about six out of ten Republicans believe, based on no credible evidence, that Joe Biden didn’t win the 2020 presidential election. It’s great to be in a country where citizens accept the peaceful transfer of power based on the results of an election and through established constitutional procedures. Sadly, I live in a country where some of the 2020 losers, apparently provoked by the sitting President of the United States, seditiously plotted to block the procedures for the transfer of power that are mandated in the U.S. Constitution.
Back to Difficult Choices. I wrote the book to try to explain a puzzle about Taiwan’s political system. At least it was a puzzle to me. On one hand, Taiwan’s democracy gets high marks around the world. American politicians express effusive praise for your political system, in contrast how they see the People’s Republic of China (PRC) system. Scholars are positive too. In the Taiwan Journal of Democracy, Kharis Templeman of the Hoover Institution recently did an outstanding inventory of various aspects of Taiwan’s system, such as its political freedoms and free and fair elections. He found that although several technical problems persist, Taiwan has improved over the last 20 years in key measures of democratic health.
On the other hand, Taiwan has intense and sometimes polarized debates on whether the government is doing a good job, that is, whether the people’s elected representatives are doing what the people want. Many policy issues are highly contested. With each transfer of power, policy can swing like a pendulum. Some policy problems never get resolved at all. One poll indicates that a majority of the people believe the government is capable of solving the problems of the country, but that majority is small—only 60% or lower. To put it simply, Taiwan’s democratic process is more impressive than the government’s performance.
I readily admit that these days, Americans should not lightly offer opinions about other democratic systems. I confess that I am in despair about the U.S. political system. If you, here in Taiwan, think American politics look bad, you should live in Washington, D.C., where it looks really bad. You might ask, why should I, an American, presume to comment on Taiwan’s political system? It’s a good question. First, I have learned a few things about your democracy since the transition from authoritarianism began in the mid-1980s, a transition to which I am proud to have made a tiny contribution. Second, even if the American system is failing, I still hope that Taiwan will succeed. I really want Taiwan to succeed, despite and because of the tough challenges before it. Third, if there comes a day when the people of Taiwan have to make a fundamental choice about their long-term future, it is vitally important that this choice be made democratically, in accordance with the ROC Constitution, and that it be a smart choice. But the political system’s performance so far on issues less existential than the long-term future suggests that making smart choices democratically is not easy here.
To elaborate on this puzzle, I’m going to discuss governance and politics concerning four issues: the government budget, public health, energy security, and conscription, with some comments on cross-Strait relations.
Government Budget
Let me now turn to my four issues. The first is the government budget. Now I know what you are thinking: “The government budget? How boring!” That does seem like an odd way to understand the performance of Taiwan’s democratic system, but think about it. When your government formulates the budget—both spending and revenues—it must balance the conflicting interests and needs of the whole society. The budget must reflect choices about policy priorities, such as the economy, the elderly, education, defense, and so on. Moreover, annual budget-making can be a response to changing circumstances, such as the current demographic transition. Making these choices, therefore, is the core of government and politics, and those choices can be particularly difficult when there are disputes over priorities and intense competition for resources.
I would like to show you the percentage of the total government budget (central and local) that went to various categories from 2012 to 2021, using the categories that the government uses:
Government administration | 13%–14% |
Education, science, and culture | 22%–24% |
Economic development (including infrastructure) | 22%–24% |
Social welfare | 20%, now rising |
Environmental protection | 3%–4% |
Defense | 11% |
Retirement expenditures | 6%–8% |
Miscellaneous | 3%–4% |
The only category that shows a modest increase is social welfare, which I interpret to reflect the needs of the aging population. There was a temporary increase in spending on economic development in 2020, which I assume was related to the COVID-19 pandemic. Interestingly, spending on defense has been fairly constant at 11% of the total government budget and less than spending in four other categories. This defense spending has remained constant as China’s military strength has grown substantially. You might think that defense spending would rise in response to the growth of the People’s Liberation Army (PLA)’s capabilities.
The main trend in spending is that budget shares have changed very little. One might say that when it comes to budget shares, different parts of the government and society seek to preserve the status quo. Different ministries and agencies want to keep their share of the pie, and different political constituencies compete to lobby for the budget categories that benefit them most; the elderly want their pensions and health care. Local governments and corporations favor economic development. Civil society groups promote causes like environmental protection. So far, however, the Ministry of National Defense has not had a domestic political constituency.
It is true that the absolute amount of defense spending has increased during the Tsai administration. The amount in 2021 was 17.9% higher than that in 2016, but is it enough to respond to the changing threat?
You can see the some of the choices at play here, such as economic growth versus social equity, economic growth versus the needs of the young and the elderly, and domestic priorities versus defense. Balancing priorities is not easy for officials or politicians.
The basic problem here, I think, is that the government doesn’t have enough resources to meet growing policy challenges. This reflects another difficult choice between lower taxes and higher taxes.
From the late Ma administration, the percentage of gross domestic product that the government extracts in taxes has moved up very gradually. The low point was 11.60% in 2013. The high point was 13.24% last year, but this figure is actually low for an advanced economy.
Change may be underway. The amount of tax revenue in 2021 was 60% higher than it was in 2012. Curiously, expenditures increased only 25.4% during that same period. I’m not sure why.
Still, Taiwan is a wealthy country that probably has room to increase tax revenues to free up resources for spending. Many people will be opposed; I’m sure that officials and corporate executives who emphasize economic competitiveness will lobby for keeping the tax burden low. Families would rather spend money on themselves or save for the future rather than paying it to the government in taxes, but there is also an argument for increasing tax resources to cover the rising costs of elder care and defense.
The government budget isn’t so boring after all, is it? It mirrors politics in action, and in a comprehensive way.
Public Health
The issue of resources is germane to my second topic—public health—and the challenges that officials and politicians face in making tough choices on hard issues. Here, I define resources to include people and institutions.
Taiwan’s single-payer system has a lot to recommend it. Senator Bernie Sanders and other American progressives have proposed such a system for my country. They call it Medicare for All. Actually, the United States already has single-payer systems for some parts of the population, like federal employees, and it works well.
Taiwan’s system has several advantages:
Still, aspects of routine health care could be improved. The main one concerns the rapid demographic transition, one consequence of which is a rising incidence of noncommunicable diseases, especially among the elderly. Those diseases now account for about 80% of all deaths. Cancer, cardiovascular illness, and dementia can be very expensive to treat.
This transition will increase the demand for health services and for healthcare workers just as shortages of doctors and nurses are growing. Although Taiwan’s system is financially sound, medical staff are reportedly burdened by a growing workload.
The growing prevalence of chronic diseases like dementia exposes the need for a long-term care system. Such a system in Taiwan should be well financed and staffed by dedicated, competent, and caring staff. Long-term care is also a big gap in the American health system, where families must cover the cost, as I discovered to my surprise when my parents needed long-term care. A good system for the chronically ill does not come cheaply.
I also understand that the quality of care in Taiwan could be improved. Surveys have suggested that patients are dissatisfied in their experiences with healthcare professionals, reportedly feeling that doctors don’t properly explain their illnesses clearly. But if doctors have an excessive workload, naturally they will ration their time spent with each patient.
Even though Taiwan created an efficient and solvent single-payer system back in the 1990s, gaps still emerged mainly as a result of the aging society. To fill those gaps, spending on health care must increase, but the working-age population that will underwrite that spending is shrinking relative to the older cohorts who will get most of the care. There are no easy answers to reconciling these competing priorities. Fortunately, I understand that healthcare has not become an excessively political issue—so far.
Energy Security
My third example of difficult choices is energy security. Here, the problem is less one of resources and more one of conflicting priorities associated with energy policy and different political forces seeking to advance their own priorities. Each interest group has a valid point in promoting its priority, but together they are unable to create a consensus that all can accept. Groups can often block, or veto, the proposals of other groups, leading to policy gridlock. Some of these groups’ priorities are as follows:
As you know, President Tsai has proposed 1) terminating nuclear power, 2) substantially increasing use of natural gas, 3) building up renewables like wind and solar, thereby 4) reducing reliance on oil and coal.
There is a logic to this proposal; it promises to reduce the use of energy sources that do the most damage and increase the use of those that do little harm. But problems have emerged as policy has been implemented:
To sum up, Taiwan has different options for its energy mix that would reduce the burning of coal and oil. There are problems and risk associated with each policy approach that would have to be managed.
Politics is also a factor that so far has made a consensus on reducing greenhouse gases impossible. Political forces can block what they oppose but complicate the effort to formulate a solution that is “good enough” for all concerned. The net result may be that coal and oil will continue to occupy a significant share of the energy mix.
Conscription
I will now address the issue of Taiwan’s security and the duty of citizens to do their part to keep the society safe. This is the issue of military service—by volunteers and conscripts.
You know the context of this issue as well as I do.
I don’t believe that war is likely in the near term. PRC leaders understand that a full-scale war would be very risky and probably lead to intervention by the United States. That is why they engage in coercion—an intermediate option that is lower risk but still has a chance of success in the long term.
I do worry about trends in U.S.–China relations:
Clearly, scenarios two and three involve Taiwan to some extent, but not necessarily in a war. But a cross-Strait military conflict could occur, and the Taiwan government, among other actions, might increase conscription, requiring many young people to join the armed forces.
This would probably occur because PRC leaders perceive—or misperceive—that a Taiwan leader is taking clear, deliberate, and irreversible steps toward independence. They would then believe they have no choice but to launch a major military campaign against Taiwan. I touched on the possibility that Beijing will act on the basis of its misperceptions, not reality. That could be a serious problem.
I certainly understand the anxiety that young people may feel about having to fight to defend their county. I was in college and graduate school during the Vietnam War. The fear of being drafted and of dying were dark clouds that hung over every American campus at that time.
I cannot tell you how likely my cross-Strait scenarios are. Taiwan has generally exercised restraint since 2008. But the risk of a military of conflict is not zero. Therefore, Taiwan and America must prepare for the possibility that war might happen. Our governments must work to keep their respective interests closely aligned and maintain close communication. Taiwan should encourage its friends in the U.S. not to create an unnecessary crisis. Our shared goal should be to reduce the risk that war will break out, because the stakes are very high. If the PLA were to win, life as Taiwan’s people know it will disappear; just look at Hong Kong.
One way to reduce the risk of conflict is to credibly reassure Beijing that Taiwan will not cross its red line. President Ma succeeded doing in that, and Beijing was prepared to improve cross-Strait relations up to a point. President Tsai has tried reassurance, but the PRC apparently was not willing to coexist with her administration. The United States has consistently said that it does not support Taiwan independence, but Beijing has repeatedly asserted that this is an empty promise, in view of our increasing support for Taiwan.
Another way Taipei and Washington can reduce the risk of an attack is to create such effective obstacles to a PLA campaign that PRC leaders would decide not to undertake an attack in the first place. That is, we can enhance deterrence.
In the event of a PLA attack, and even assuming the United States intervened, it would probably take over a month for the U.S. armed forces to arrive in strength in the Taiwan area. To prepare, our defense officials have discussed the defense strategy and the weaponry required to execute it. The United States has been increasing its arms sales to Taiwan, and Taiwan is increasing its defense budget. Hopefully, these steps will enhance deterrence.
Part of deterrence is that Taiwan has enough well-trained soldiers to effectively resist a PLA invasion until U.S. armed forces can enter the fight—and so dissuade Beijing from starting the fight in the first place. The danger is that the Taiwan military doesn’t have enough soldiers to defend the landing beaches and stop the PLA, whose forces are likely to be much larger. Can Taiwan take the chance that a relatively small force will be sufficient to defend the island, or should it play it safer and build a force that may be larger than needed but will better enhance deterrence?
I agree with President Tsai’s decision to lengthen the service period for conscripts to one year to supplement the main battle troops made up of volunteers. Taiwan’s military needs more manpower to mount a strong defense.
The defending force must also be well trained, otherwise it will not induce sufficient restraint on the other side. Different kinds of training are needed, such as learning how to use and maintain weapons; operate in small units and in larger formations; and defend the beaches, lowlands, and large cities.
However, it is my understanding that under the new plan, conscripts—the garrison troops—will be assigned to territorial and infrastructure defense. Volunteers—the main battle troops—will bear the primary burden of fighting on the front lines. I hope that conscripts will get the same training as volunteers, just in case they are needed as reinforcements.
Strengthening the reserves is also a good step; because if they are well trained, they will expand Taiwan’s strategic endurance.
Understandably, expanding and training a larger fighting force is politically controversial. Young people don’t want to interrupt their careers and be placed in danger. Their parents don’t want to see that either. The two major political parties have a history of competing to reduce the obligation of young people to serve in the military. Neither has been willing to radically increase the defense budget.
But the time may have come when Taiwan has not choice but to set politics aside and craft a consensus that a stronger military is needed in order to deter war. The Tsai administration has increased the absolute size of defense budget. Of course, those citizens who must sacrifice their time and maybe their lives to defend Taiwan will need to be confident that political leaders will do everything to avoid war even as they preserve Taiwan’s unique character. But the stakes are becoming too high not to make the tough choices on these issues.
Politics
To conclude, I will make a few observations about politics, which, as you know, intrudes into every issue of public policy. That is what we should expect in a democracy.
You may have noticed, however, that politics intrudes to different degrees and in different ways, depending on the issue. On the government budget, most decisions are made within the Executive Yuan. For the most part, healthcare is also an inside game. But someday when it is necessary to increase taxes, loud complaints and opposition are likely.
But there are other issues where the politics are much more public.
On energy policy, different actors have different and conflicting interests and are often vocal in articulating them. Conservation groups have managed to slow down the transition to renewables. The anti-nuclear movement seems to have won its fight. So far, it has been impossible to forge an optimal, balanced, and enduring policy consensus that includes a significant reduction in greenhouse gases.
Conscription is not yet a major issue, but it could become one. Taiwan’s young people have demonstrated great skill in the arts of 21st-century protest, such as the Sunflower Movement.
Of course, conscription is embedded in the larger issue of cross-Strait relations, which is a highly polarizing issue. It divides people according to party affiliation, social class, economic interests, age cohort, and competing historical memories. Disagreements over cross-Strait relations have helped stimulate Taiwan’s protest culture that works to block what is opposes rather than fostering policies that a majority of the public can support.
I understand that one possible reason for the protests is that elements of the public have lost confidence in the institutions of representative democracy that were established in the Constitution. The Constitution also guarantees freedom of expression and freedom of assembly as well as authorizes referendums. But at a point, the exercise of these mechanisms of direct democracy undermines the ability of legislators, whom the people have elected, to do their job. The result is sometimes gridlock.
Another probable source of dissatisfaction is what political scientists call majoritarianism, that is, given the design of Taiwan’s legislative elections, the winning party’s share of seats in the Legislative Yuan is larger than its share of the total vote. Thus, the winning party gains a lot of leeway to enact its agenda without checks from the minority parties, which is frustrating to those parties. When legislative power rotates, the new majority party can overturn the work of the previous majority party, meaning some issues never get resolved.
Yet given Taiwan’s unique situation, the stakes are too high for politicians to be complacent. Voters expect their elected representatives to perform well, and the stakes are too high to tolerate gridlock or risk serious policy mistakes. Nor is muddling through a good option. Taiwan’s democracy is not perfect, but it is still a precious thing. You can be certain that the PRC would prefer that Taiwan’s political system remain divided and perform badly.
Some of the dissatisfaction with the institutions of representative democracy may indeed be justified. If so, it is up to those institutions to reform themselves and improve their performance, winning back the people’s trust. In return, the public and civil society should perhaps give those institutions the flexibility they need to formulate policies that enjoy public support.
What might be done to improve matters? I am especially wary of offering suggestions on this question, since I know that Taiwan politics are more complex than I understand. My bias is in favor of representative democracy and against the ways in which citizens and politicians try to circumvent the role of the leaders that the people elected. I present a number of ideas for reform in my book, some of which are very technical.
The one idea I would suggest today is that Taiwan’s political leaders come together and use their creative skills to formulate a coherent set of policies that address current and future challenges on cross-Strait relations and other issues, that is, that they work together to make the difficult choices.
President Ma repeatedly called for greater political unity. President Tsai has done the same. The two of them may have different ideas about the content of that unity, but at least they agree that a divided Taiwan is a weaker Taiwan.
It is easy for me to offer this advice, especially because I live far, far away, while it is hard for political leaders here to make those tough choices. But the people of Taiwan deserve strong leadership from their leaders.
To make my suggestion more specific, let me identify several principles that the KMT, DPP, and other parties might enunciate together to demonstrate the kind of unity that I have in mind:
There may come a day when the people of Taiwan must make a fundamental choice about their long-term future. If that happens, it is vitally important that this choice be made democratically, so that the people have their say. That choice should be made in accordance with the ROC Constitution, which is the appropriate document to guide how such fundamental choices should be made. And it must be a smart choice, crafted by this society’s best minds and based on the best interests of the population at large. Making a smart choice is not always easy for a democracy to do, but in this case, it is a necessity.
Thank you for your attention.
