Taiwan's election is Asia's latest revolution

By David DeRosa

NEW CANAAN, Connecticut (Bloomberg): Taiwan's voters turned out in record numbers to elect Chen Shui-bian president recently. Chen is a dissident politician associated with the movement for Taiwanese independence and his victory ends more than a half- century of Nationalist Party rule.

This is a remarkable event. The temptation is to put it down to special circumstances in Taiwan. True enough, Chen has the People's Republic of China (PRC) to thank in part for his election. The PRC's media campaign included threats of armed conflict, even nuclear conflict.

China's message was unmistakable: Elect Chen at your own peril. China's campaign backfired and angry Taiwan voters decided to stick it right back to the PRC by siding with Chen. The PRC got exactly what it deserved in many people's eyes.

Great nations from time to time get hung up on issues that to the outside world appear unimportant. So it is with the PRC over the issue of Taiwan's possible independence. The PRC has 3.7 million square miles and 1.2 billion people. From an outsider's viewpoint why would the PRC give a hoot in hell over Taiwan, an island with 22 million people and a landmass of 14,000 square miles? Who knows why, but you can bet if you repeat what I write here in the presence of China's President Jiang Zemin, his answer might be something like, "just like you Americans and Cuba, heh?"

Still, in the larger picture, recently's election was amazing in that Taiwan joined the growing ranks of Asian nations that have in the last few years tossed out long-governing parties and leaders in favor of political outsiders.

* In 1997, South Korea elected Kim Dae Jung, a career political gadfly, to the presidency. Like Chen, Kim had spent time in jail as a political prisoner.

* In 1998, Indonesia ousted its president of 32 years, Gen. Soeharto. His successor, B.J. Habibie, was an interim caretaker. In 1999, Soeharto's real successor emerged in the person of Abdurrahman Wahid, known as "Gus Dur".

* Going back further, the Philippines finally tossed out strong-man Ferdinand Marcos in 1986 after 20 years of despotic and financially ruinous rule. Corazon Aquino, the wife of the slain opposition politician Benigno Aquino, succeeded Marcos.

None of them, Kim, Wahid, Aquino, or Chen, looked like mere footnotes in the history of their countries until events swept them into power.

Maybe there is a pattern here. Dictators and party bosses beware. You can only push Asia around for so long -- as amazingly long as that might be.

The challenge for Chen is daunting. He has to serve as president without a majority in parliament. And he has to walk a very fine line between satisfying his supporters, some of whom are diehard seekers of independence from the PRC, without overly provoking Beijing.

He also has to figure out what to do about Washington, his country's most important supporter and occasional supplier of military hardware. The problem is that the United States possibly does not know what it wants to do.

Chances are the current administration is going to dither about trying to appease the PRC and at the same time give the appearance of supporting the freedom-loving democracy of Taiwan.

One piece of folklore about President Bill Clinton is that in his youth he visited the Kennedy White House, and even shook hands with the President. Clinton's supporters like to dredge this up because they have some kind of warped idea that there is a continuum between Bill and Jack.

So be it -- but then when the policy wonks at the State Department come up with their ideas on what to do about Taiwan and the PRC, Clinton should consider a little chapter and verse from Jack Kennedy's inaugural speech:

"Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and the success of liberty. This much we pledge -- and more. To those old allies whose cultural and spiritual origins we share, we pledge the loyalty of faithful friends."

Most likely young Kennedy was speaking in veiled words about Berlin and the message was meant for Soviet Premier Nikita Khrushchev. Nobody wants to return to the Cold War but still you have to admit it's a shame we cannot afford such noble sentiments.

The writer is president of DeRosa Research and Trading and manages an investment fund. He is also an adjunct finance professor at Yale School of Management. His opinions don't necessarily represent the judgment of Bloomberg News.