LOOKING TO BOUNCE BACK, DPP DE-EMPHASIZES

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001464

SIPDIS

E.O. 12958: DECL: 10/14/2018
TAGS: CH PGOV PREL TW
SUBJECT: LOOKING TO BOUNCE BACK, DPP DE-EMPHASIZES
INDEPENDENCE, PUSHES NEW DOMESTIC POLICIES

REF: A. TAIPEI 1431

B. TAIPEI 1419

Classified By: The Director for reasons: 1.4 (b/d)


1. (C) Summary. Since the start of 2008, Taiwan,s Democratic
Progressive Party (DPP) has been humiliated in legislative
and presidential elections and wracked by a scandal that
threatens to end in money laundering charges against its
former party leader and two-term President. Although
reeling, the DPP has embarked on a project to reinvent itself
and restore its status as a legitimate challenger to the
ruling KMT party. Led by Chair Tsai Ing-wen, a politician
better known for technical competency than flights of
rhetoric, the party hopes to do so through a combination of
practical policymaking and local politicking. On
cross-Strait issues, Tsai has moved the DPP from its
historical focus on independence, which many believe
contributed to the party,s loss in the March presidential
elections, to one premised on the DPP,s ability to better
protect Taiwan,s de facto sovereignty. The DPP has been
helped by Ma administration missteps. The first electoral
test of the new DPP is next year's local elections, giving
the party plenty of time to hone its strategy. If the DPP is
unable to regroup, the absence of a credible opposition party
is likely to weaken constraints on the ruling KMT party as
well as reduce its leverage against PRC pressures. End
Summary.


2. (C) 2008 has not been a good year for Taiwan,s Democratic
Progressive Party (DPP). Its candidates were thumped in
January legislative elections, with a new single-member
district system giving the KMT three times as many seats in
the Legislative Yuan. In March, the DPP candidate to succeed
two-term President and DPP party elder Chen Shui-bian was
similarly drubbed by KMT candidate Ma Ying-jeou. These
electoral woes have been compounded by a mounting scandal
surrounding allegations that Chen shipped tens of millions of
dollars to overseas accounts. While it is not clear whether
these funds were political contributions, as Chen claims, or
came from public coffers (which would put the ex-President in
serious legal jeopardy),the case has shattered the image of
the DPP as the &clean8 alternative to the KMT.


3. (C) Charged with heading the effort to restore the
fortunes of the DPP is Tsai Ing-wen, a Cornell-trained lawyer
whose studious persona is a far cry from the
barricade-storming reputation of the party,s founders. As
she pursues her goal, she must walk a tightrope between the
need to introduce youth and a platform acceptable to a broad
spectrum of Taiwan,s electorate without alienating the DPP
old guard. In the short run, the troubles of the Ma
Ying-jeou administration have made her task easier.

The &New8 DPP: Sovereignty Trumps Independence
-------------- -


4. (C) The DPP,s first challenge is to identify policies
that will bolster its standing among Taiwan's general public.
In particular, DPP International Affairs Director Lin
Chen-wei and Soochow University Professor Lo Chih-cheng told
poloffs in late September meetings, the DPP needs to
demonstrate it is a better alternative than the KMT.
Although the Ma administration had public opinion problems
(ref A),Lo maintained, DPP Chair Tsai could not afford to
sit back. Underlying voting patterns meant that, unless the
DPP can change Taiwan,s political demographics, it must
accept being, in effect, Taiwan,s permanent opposition party.


5. (C) In a September 26 policy briefing for diplomats, Tsai
laid out the party's three stages of development. The first
two stages ) outlining a pro-democracy agenda and painting
the DPP as better equipped to defend Taiwan,s sovereignty in
cross-Strait talks ) were well under way, she said.
Professor Lo pointed out to poloffs the party's ability to
adapt its cross-Strait approach to current conditions, noting
that sentiments within the DPP were shifting toward a goal of
preventing unification rather than pressing for independence.
Even among "deep greens," there was an emerging consensus

TAIPEI 00001464 002 OF 002


against the pursuit of independence as a priority. Lo
mentioned ways to institutionalize DPP positions in this
area, including requiring referenda on major cross-strait
agreements. This would help ensure stability, protect the
status quo and guarantee that any changes enjoyed the support
of the Taiwan public.

Policy Must Look Beyond CHINA
--------------


6. (C) Acknowledging the need to define the DPP in areas
other than cross-Strait ties, Tsai said the party was "about
ready" to focus on policy and economic issues, the party's
third developmental stage. She identified these goals as
creating a service and industrial based economy, reforming
the welfare system, investing in science and technology,
developing a "meaningful" defense capability (one that would
give Taiwan confidence when entering into negotiations) and
addressing social tensions.


7. (C) Both Lo and Lin pointed out hurdles the DPP faces as
it seeks to stake out a policy agenda of its own. Most
notably, Lo said, was the need to find issues it can
spearhead without significant legislative clout. Giving tax
rebates to those in the lower income bracket, for example,
would boost spending and help the economy. DPP loyalist Lin
expressed little doubt that his party could develop
constructive policies, but suggested it would be difficult to
prevent the KMT from taking credit for DPP-initiated
policies. He maintained former President Lee Teng-hui's
pursuit of Taiwan,s return to the UN was originally a DPP
goal. Lin also claimed policies Ma currently is implementing
have Chen administration roots.

Target: Next Year's Elections
--------------


8. (C ) In addition to developing new policies and retooling
cross-Strait strategy, the DPP is taking structural changes
to improve its chances in 2009 local-level elections. By
eliminating primaries and implementing a new nomination
process, Tsai explained, the DPP hopes to avoid the internal
friction caused by its old, highly competitive primary
system. Instead of relying on primaries, the DPP Central
Standing Committee will in the next few months simply
identify candidates for the various races. Although
candidates have yet to be named, DPP Department of Social
Development's Cheng I-Lee and DPP Chairman of Yilan County
Lin Chin-tsai told poloffs that the DPP has a good shot at
winning seats in Taipei county, Yilan county, Chiayi city,
and perhaps Nantou.

Comment
--------------


9. (C) The DPP appears to be learning from its past mistakes
and retooling its strategy, but success is far from assured.
Many DPP supporters ) including the party,s most fervent
base ) see Tsai as elitist and out of step with the party,s
core constituency. Many of them are also reluctant to
diminish the DPP's fundamental goal of independence that
distinguishes them from the KMT. Former President Chen
himself argues that the inability of DPP candidate Frank
Hsieh to mobilize the hard-core independence supporters led
to his defeat in March. Mollifying these partisans while
simultaneously crafting an image of a young, creative
organization will be a balancing act. The stakes are high
for Tsai and the DPP, but her success has implications for
the KMT and Taiwan as well. The absence of a strong credible
opposition weakens the constraints on the ruling KMT party.
At the same time, ironically, this also weakens the KMT's
position in its bargaining with the PRC for greater
international space. Unless Beijing sees a possible DPP
return to power, it has little incentive to give very much to
the KMT on sovereignty-related questions. End comment.
RWANG