PRESIDENT MA YING-JEOU RIDING HIGH AFTER FIRST

C O N F I D E N T I A L SECTION 01 OF 05 TAIPEI 000624 SIPDIS STATE PASS USDA FAS FOR OCRA/RADLER, BEILLARD; OSTA/BLUM, SHNITZLER, HAMILTON; ONA/BERTSCH; OFSO/WAINIO; AND APHIS/IS/CAPLEN E.O. 12958: DECL: 05/22/2019 TAGS: PGOV PREL ECON EAGR MARR PINR US CH TW SUBJECT: PRESIDENT MA YING-JEOU RIDING HIGH AFTER FIRST YEAR DIFFICULTIES REF: TAIPEI 594 Classified By: AIT Director Stephen M. Young, Reasons: 1.4 (b/d) ¶1. (C) Summary: Independent polling shows public satisfaction with President Ma Ying-jeou's performance has risen from 29 to 39 percent over the past two months. Much of the improvement appears due to the recent rise in the stock market and public expectations of a better economy in the future. While his administration made some mistakes during its first year, Ma has taken corrective steps, increasing his ability to set and control the government agenda. In addition, his cross-Strait and foreign policies are now bearing fruit as, for example, increased numbers of PRC tourists are visiting here and Taiwan has participated as an observer in the May WHA meeting in Geneva. Hoping to strengthen his power within the KMT party and increase his leverage over the KMT legislative caucus, Ma will likely assume the party chairmanship this summer. At this stage, the opposition DPP poses only a limited challenge to Ma and the KMT, who appear to be in a strong position as they begin preparing for a series of election tests over the next three years. Ma, however, is taking a political risk by making cross-Strait policy, the most divisive issue in Taiwan politics, the centerpiece of his presidency. Ma's promise to keep commitments and avoid "surprises" should continue to increase stability in U.S.-Taiwan relations. End Summary. Recovery in the Polls -------------- ¶2. (C) President Ma weathered a difficult first year in office that saw his approval rating in public opinion polls sink at times to the mid-twenties. Recent polling by the well regarded Global Views Survey Research Center (GVSRC) indicates, however, that the gap between those satisfied with Ma's performance and those dissatisfied narrowed from 29 percentage points (29 - 58) in mid-March to just 10 points (39 - 49) in mid-May. GVSRC Director Tai Li-an told AIT that public satisfaction with Ma's performance has now returned to the level he enjoyed after one month in office. Polling by other media organizations also shows the same trend, Tai noted, though specific percentages vary. He predicted that Ma's approval rating will remain at the new level and perhaps continue rising, but slowly. Public trust in Ma has also been increasing, Tai said, a measure he views as critical for a political leader. Tai attributed the turnaround in Ma's polling numbers primarily to the rise in the stock market, which began two months ago, and to public expectations that the economy will be improving in the second half of the year. (Note: Even when Ma's approval ratings were low, most of his "dissatisfied" supporters were telling poll takers they would still vote for him rather than the DPP.) Ma's Early Difficulties -------------- ¶3. (C) Ma won the 2008 presidential election based on pledges to strengthen economic performance, clean up corruption, improve cross-Strait relations, and stop unproductive diplomatic competition with Beijing that had damaged Taiwan's relations with the U.S. and others. Ma's approval rating plummeted after the global downturn made it impossible for him to deliver on lavish economic promises, the key plank of his campaign. Economic indicators became worse month-by-month as the global downturn deepened. The government's issuance of consumption vouchers to the public early this year, although quite popular at the time, provided only a temporary boost to President Ma and his administration. ¶4. (C) The initial results of President Ma's push to quickly improve cross-Strait relations were also mixed. Although TAIPEI 00000624 002 OF 005 weekend and then daily cross-Strait charter flights were started, only a trickle of Chinese tourists showed up in Taiwan at the beginning. Thus, the predicted benefits from Ma's cross-Strait policy were slow to materialize at first. ¶5. (C) Ma also had other difficulties during his first year. His initial approach to the presidency was to "stay on the second line," leaving most of the business of governing to the cabinet and keeping himself largely out of the public eye. He also sought to distance himself from his own KMT party in his idealistic efforts to stay above partisan politics. Becoming known as the "stay at home" President, Ma looked particularly ineffective when several of his key picks for high offices were rejected by the Legislative Yuan, despite the fact that his own party and allies controlled a 3/4 majority. Early on, the cabinet fumbled a number of issues such as its response to a typhoon and its implementation of a rise in gas prices, and lack of inter-agency coordination was clearly a problem. In addition, several cabinet ministers mis-spoke, the Economic Minister, for example, explaining that his prediction of a dramatic rise in the stock market had been a "joke." Ma's Deep Blue supporters were also disappointed at the initial lack of progress in legal action against former President Chen Shui-bian for corruption charges. Ma Recovers -------------- ¶6. (C) Reacting to criticisms, last fall Ma and his administration began a series of corrective steps. Moving to the "front line" of government and mending relations with his own party leaders, Ma established a weekly meeting of five senior leaders (President, Vice President, Premier, LY Speaker, KMT Chairman) to coordinate policy. In addition, Ma began to weigh in directly with the cabinet ministers. Two of the most ineffective cabinet members (Health Minister and Government Spokesperson) were replaced with people who had previously worked very closely with Ma. To improve his public outreach, Ma significantly increased his media interviews and statements on policy topics, including controversial cross-Strait issues, though public communication is still viewed as a weak spot for Ma and his administration. ¶7. (C) Although the steps taken by Ma helped improve his image, the public's view of the government has hinged mostly on economic performance. Taiwan's stock market began a sustained rise in March. The public is also expecting that an increase in business with China will help boost the economy. Ma's improved standing in the polls is a direct result of the stock market rise and the public's economic expectations, Tai suggested. ¶8. (C) A number of other factors have also turned in Ma's favor. So far, Beijing has been accommodating to the Ma administration's cross-Strait initiatives. Three rounds of talks have produced nine agreements and a joint statement in just one year, more than was accomplished during the previous 15 years of the cross-Strait relationship. Beijing has also been responsive to Ma's call for a "diplomatic truce" and his plea to allow increased international space for Taiwan. As a result, Taiwan has not lost any diplomatic allies over the past year, and Taiwan's Health Minister was able for the first time to participate as an observer in the WHA meeting in Geneva. In contrast to earlier complaints about too few Chinese tourists, people are now worried about having more visitors (averaging about 3,000/day) than Taiwan can accommodate. Boosted by cross-Strait progress, the WHA breakthrough, and U.S. and other international support for his policies, Ma Ying-jeou comes across to the public as increasingly self-confident. ¶9. (C) The ongoing detention and trial of former President Chen Shui-bian show no evidence of being orchestrated by Ma. TAIPEI 00000624 003 OF 005 Nonetheless, Chen's detention and trial have helped Ma's standing with the KMT's core Deep Blue supporters, who previously blamed Ma for being too weak on the former President. ¶10. (C) Over the past year, Ma's approval rating always fell after first showing temporary rises. This time, however, the recovery should be more sustainable, Tai suggested. In his view, U.S. and PRC economic policies have combined to improve Taiwan's economic outlook. The Chinese economic stimulus policy is generating new orders to Taiwan firms, and as a consequence the employment situation in Taiwan's science parks is improving. This is especially important since many employees going back to work are family breadwinners. Although economic indicators such as the unemployment rate are likely to worsen, Tai predicted this will not have much effect on Ma's approval rating. Many of the new unemployed this summer will be graduating students who are not breadwinners and will be able to get by without great difficulty, he explained. Challenges Facing Ma: Controlling the KMT... -------------- ¶11. (C) Since becoming the KMT's top leader and presumptive future presidential candidate in 2005, Ma has worked to draw Blue dissidents back into the fold and reunite the party. However, even though he is President, Ma lacks firm control over the KMT apparatus, many of whose workers are beholden to Honorary Chairman Lien Chan. Ma seems convinced that controlling the party is key to managing the KMT LY caucus, which at times defies his wishes. He appears ready to resume the KMT party chairmanship when the position comes open this summer, a move that would consolidate his power and allow him to replace Lien Chan loyalists with his own people in the party apparatus. In addition, control over the party's resources and nomination process would increase his leverage over the KMT LY caucus. Some KMT officials and observers do not support Ma's becoming party chairman, however. Many believe this will increase his liability for whatever goes wrong, and they also doubt that Ma will be able to control the KMT's legislators. ...and Facing the DPP -------------- ¶12. (C) Recent by-elections and polling results suggest the DPP has held on to its core supporters despite election defeats and the corruption cases surrounding former President Chen Shui-bian. Nonetheless, the party remains at a disadvantage because the basic voter structure in Taiwan favors the KMT by a 55-45 or greater margin. The DPP is divided between moderates and pro-independence activists, the latter working to prevent the party from moving in a more moderate direction, especially on cross-Strait issues. Therefore, so long as radicals have a major influence on the party agenda and image, the DPP will have difficulty attracting enough centrist voters to close the gap with the KMT. Compounding its internal problems, the DPP faces a KMT that has a much stronger and more extensive local organization. For these reasons, unless Ma, the KMT, or Beijing make major mistakes, the DPP is likely to remain the minority party for now, with little near-term prospect of being able to challenge the KMT on an equal basis. Upcoming Tests for Ma and the KMT -------------- ¶13. (C) The KMT will face two sets of local elections in 2009 and 2010 that some regard as mid-term exams for President Ma and his administration. These will be followed by legislative elections in December 2011 and the presidential election in March 2012. The local elections are unlikely to produce major changes in the political balance, which favors the KMT. The DPP had been hoping that former TAIPEI 00000624 004 OF 005 Premier Su Tseng-chang would run and win a key election in Taipei County this December, but it now appears this election is going to be postponed until 2010. Su may be the strongest DPP candidate to challenge Ma in 2012 or possibly to run in ¶2016. The DPP will hope to increase its legislative seats (currently 27 of 113) in the 2011 LY elections. Given the structure of Taiwan's electorate and the advantages of incumbency, Ma has the advantage at this stage looking forward to a reelection bid in 2012. Where Ma Could Run Into Problems -------------- ¶14. (C) Ma is clearly taking a political risk by choosing cross-Strait policy, the most divisive issue in Taiwan politics, as the centerpiece of his presidency. Ma's mainlander background -- his late father was the head of a reunification association -- leaves him especially vulnerable should anything go wrong in the cross-Strait relationship. With uncharacteristic boldness, he is pushing forward vigorously on cross-Strait initiatives, counting on Beijing to cooperate and raise no political difficulties. As a previous Vice Chairman of the Mainland Affairs Council (1991-93),Ma may feel confident he understands and can manage cross-Strait relations, and public opinion polling indicates majority support for his cross-Strait policies. Nonetheless, as the large crowds that turned out on May 17 to protest against his policies suggest (reftel),there is no broad consensus in Taiwan on what kind of a relationship Taiwan should have with the PRC and to what extent the PRC should be viewed as a threat rather than an opportunity. Pro-independence activists and some in the DPP will look for opportunities to undermine public support for Ma's policies by arguing that the President is "selling out" Taiwan and compromising its sovereignty and other interests, while not giving the public a proper say. China could pull back from its current accommodating stance, to Ma's disadvantage, but that would risk a revival of the DPP, something presumably anathema to Beijing. Implications for the U.S. -------------- ¶15. (C) Differentiating himself from former President Chen, Ma likes to stress that he will not be a trouble-maker, and not play tricks ("surprises") or break rules set by Washington, for example, on transits. Ma emphasizes he wants a strong security relationship with the U.S., in no small part as leverage, and to balance, his policy of expanding ties with the mainland. He maintains that his cross-Strait policy, which increases peace and stability in the Taiwan Strait, serves U.S. as well as Taiwan interests. Ma has been grateful for U.S. expressions of support for his cross-Strait policy. Perhaps in part because he has invested so much political capital in pursuing better cross-Strait relations, however, Ma still seems indecisive and risk averse when it comes to dealing with issues beyond his expertise. Two examples of this are economic structural reform and bilateral agricultural trade issues such as the full opening of Taiwan's market to all U.S. beef products. On the beef issue, Ma has in the past seemed intent on proceeding cautiously, unsure of the costs and benefits of opening. Now that he is in a stronger position politically, Ma will hopefully gain the confidence to take action on our outstanding priorities, including the beef issue. Conclusion -------------- ¶16. (C) While there is no guarantee Ma will not run into difficulties over the next three years, at this stage he seems increasingly comfortable in his presidency and optimistic about the future. He is in his strongest position since the inauguration, appears poised to increase his power within the KMT, and faces only a limited challenge from the TAIPEI 00000624 005 OF 005 opposition DPP. His commitment to avoid "surprises" will reduce the uncertainties in U.S.-Taiwan relations, and his strengthened political position may give him more leeway in negotiations with Beijing. YOUNG