Taiwan in dire straits

A scandal-driven storm has greatly polarized Taiwan society. Washington should keep a closer eye on it before a perfect storm develops in the Taiwan Straits between China and the island nation.

The governing Democratic Progressive Party (DPP) is embroiled in a long-standing confrontation with the opposition Kuomintang (KMT) on whether the president should resign over alleged corruption within the first family. This dispute could be easily ignored except for the possible implications beyond Taiwan.

The corruption allegations focus first on the first lady, Wu Shu-chen, who reportedly received vouchers valued at more than $150,000 from a department store. Meanwhile, Chao Chien-ming, the president's son-in-law, and his parents and siblings, are under investigation for alleged insider trading and bribery. The charges are serious enough that Ma Ying-jeou, the KMT chairman, appealed to President Chen Shui-bian to resign to avoid being forced to step down. Anti-Chen protests were held June 10, and a few days later the KMT presented a motion in parliament to recall the president. The KMT lacks the two-thirds majority to pass the measure, but it is calling for massive protests on June 27, the day of the recall vote.

In 2000, Mr. Chen became Taiwan's first non-KMT president since the KMT took over the island in 1949. The KMT, it is widely believed, was voted out of office because of rampant corruption. However, since Chen's DPP took office, both he and the party have been dogged by charges of corruption.

In the inaugural address for his second term in 2004, Chen pledged "to unify the people of Taiwan." Ironically, it seems, the Taiwan people are now uniting against him.

This political chaos has three implications.

First, Taiwan could become a failed democracy. According to a recently released poll, Chen's approval ratings have plunged to 16 percent, a record low for any president. On May 20 of this year, the fifth anniversary of Chen's presidency, he apologized to the nation for the wrongdoings of his relatives and top officials, and promised an open and thorough investigation. However, days later, he blasted the opposition's recall as "blatant political interference with the judiciary." Consequently, Standard & Poors has warned that the island's credit fundamentals are being weakened by "policy paralysis" brought on by the crisis.

Second, it may give the pretext for intervention by China. According to China's "antisecession law," internal instability within Taiwan is one of three conditions for the People's Liberation Army to invade. However, Beijing has forbidden China's media to comment on Taiwan's scandal-driven chaos for two reasons. On the one hand, their comments may turn into an appeal for self-housecleaning. On the other hand, Beijing wants to exclude the media from influencing Beijing's decisionmaking.

Third, it puts the US in an awkward position. While the US has asked China to be a responsible stakeholder in the Taiwan situation, it may also need to prevent Taiwan from being an irresponsible stakeholder.

For Washington, it is noteworthy that Lee Teng-hui, Taiwan's former president and spiritual leader of the separatist Taiwan Solidarity Union (TSU), has shown signs of favoring Chen's resignation. Mr. Lee apparently prefers to let Vice President Annette Lu take over if Chen is recalled or resigns, partially because it is in accordance with the Constitution, but largely because Ms. Lu is a supporter of Taiwan's independence. During his presidency, Lee's stance toward declaring official independence was a source of acute tension with Beijing. If Chen is to be recalled and Lu becomes his successor, she may conceivably declare Taiwan's independence, with the support of Lee and the TSU, by 2008. Such an event could trigger a major crisis with China, which sees the island as a renegade province.

Taiwan's current political crisis can't go on much longer without a solution that maintains both peace and democracy for the island.

• Antonio C. Hsiang is a researcher at Taiwan's Society for Strategic Studies and editor in chief of "Preventing a Perfect Storm in the Taiwan Strait: A Power Transition Perspective."