Outgoing Taiwan Leader to Quit as Head of Party

The tectonic political shift resulting from Taiwan’s presidential election continued to rumble across this island Sunday as outgoing President Lee Teng-hui announced that he will resign as chairman of the long-ruling Nationalist Party.

The surprise decision capped an extraordinary day of rowdy protests by Nationalist supporters who blamed Lee for the party’s humiliating defeat in Saturday’s polls. The Nationalist presidential candidate, Vice President Lien Chan, finished a dismal third behind winner Chen Shui-bian of the opposition Democratic Progressive Party and independent candidate James Soong.

Thousands of angry demonstrators converged on Lee’s official residence and on Nationalist Party headquarters to demand a reckoning for what they called Lee’s deception and betrayal of the dynasty that has ruled Taiwan for 51 years.

“Lee Teng-hui, step down! Down with Lee!” the protesters shouted, hurling eggs, rocks and abuse before riot police with shields and water cannons were called out to calm the situation.

Several demonstrators were hurt in the melee, as were some party officials who were attacked by the crowd as they arrived for an emergency meeting to decide what to do in the wake of the stunning loss.

Taiwan’s stock market reacted to the turmoil by opening sharply lower at the start of trading today. Taiwan’s Weighted Price Index was off 2.8% within an hour after trading opened but inched back up slightly by midday.

On Sunday night, Finance Minister Paul Chiu had announced that he will permit stocks to drop by no more than 3.5% each trading day for the next two weeks, or half the normal limit for a one-day drop.

The question on everyone’s lips here is whether the Nationalists--also known as the Kuomintang, or KMT--can survive the deep damage and divisions in their ranks.

Besides Lee--who said that in September, a year early, he will step down as party chairman--another high-profile KMT politician, Taipei Mayor Ma Ying-jeou, abruptly resigned from the party’s Central Standing Committee in a show of dissatisfaction with the current leadership.

Without reform, Ma said, “the party will wither.”

Moreover, many KMT supporters appear poised to switch allegiance to Soong, a former KMT stalwart whose independent candidacy came close to victory Saturday with the help of other disaffected Nationalist voters.

To cheering crowds, Soong announced Sunday that he intends to form a new party, which could pose a formidable challenge not only to the KMT but also to Chen’s new government and to the strength of this island’s young democracy.

“We will forge the views of the majority Taiwanese and turn them into the truly stabilizing power of Taiwan,” Soong said.

Chen spent his first day as president-elect paying tribute to one of his late mentors and beginning the transition to assume Taiwan’s highest office May 20. He met Sunday with defense and security officials, whose support will be crucial for a smooth transfer of government from the hands of the KMT, which relied on Taiwan’s military for decades to stay in power.

“He wants to ensure that the security apparatus and the police network are neutral in all this,” a spokesman for Chen said.

But even Chen’s eyes were on the drama unfolding around Lee--whom Chen will meet with today--and the incumbent president’s fractured party.

For now, the KMT retains control of Taiwan’s legislative assembly, the Yuan. Yet that could change sooner than expected if Taiwan’s top court decides to void a measure that allowed lawmakers to extend their terms past the just-completed election.

If the extension is declared unconstitutional, elections for the Yuan would have to take place by Chen’s inauguration in May, giving the KMT’s opponents a chance to capitalize on the ruling party’s disarray. The Nationalists could even find themselves completely in the minority for the first time in Taiwan’s history, said Liu I-chou, a political scientist at National Chengchi University here.

“It’s a very good opportunity for James Soong’s camp to run for national assembly positions,” Liu said. And Chen’s Democratic Progressive Party “can probably take a lot of them.”

KMT officials acknowledge that they face a daunting task of reform if they hope to recover ground.

Throughout the campaign, voters pronounced themselves sick of the rampant corruption that afflicts politics in Taiwan. As one of the world’s richest political parties, the Nationalists own a huge business empire and a war chest worth billions of dollars.

Critics also point to an ossified party command structure that prevents real change and alienates the rank and file.

After their emergency session, KMT officials announced that a reform committee will be set up to examine the party’s workings--for example, how the next chairman will be selected--and its finances. The KMT wants to mount a preemptive strike against attempts by outsiders, such as Chen, to take action against its assets.

“We just have to clean up ourselves,” said Yu-ming Shaw, deputy secretary-general of the party.

“We suffered a terrible blow. [But] we don’t want to fold up the shop. We want to revitalize the party,” Shaw said. “It’ll take a lot of work.”

Despite the chaos, analysts cautioned that it is far too early to count the KMT out. Its foundation and grass-roots organization remain strong, they noted.

“I think they’ll pull themselves together--they’re under great pressure” to do so, said Linda Jakobson of the Finnish Institute of International Affairs. “This is certainly not the end of the Kuomintang in Taiwan.”

Lee’s resignation from the chairmanship should help. The protesters Sunday identified the 77-year-old leader as the root cause of the KMT’s troubles--a stinging reversal for a man who has been widely credited with transforming Taiwan from an authoritarian state into a thriving, if still imperfect, democracy.

The demonstrators accused Lee of ruling autocratically and of secretly pushing for Taiwanese independence from mainland China.

Many said that Lee had tricked them into throwing their votes away on Lien by falsely claiming that Soong didn’t stand a chance, which may ultimately have allowed Chen to squeak through to victory. Others even accused Lee of supporting Chen behind the scenes.

“That’s why we want him to step down. If he steps down, then the party can change,” said Lily Tien, 50, who added her voice to the chorus of disapproval outside KMT headquarters.

Metal barriers, barbed wire and riot police kept the demonstrators back. Posters proclaiming, “Lee Teng-hui sold out the KMT” and “Lee Teng-hui, deceiving dog,” were impaled on the wire.

An elderly woman, waving her KMT membership card, screamed at police: “I’m still angry! I want [Lee] to see it!”

The protests continued well into the night and were still going on this morning, though in diminished form.

Chen appealed for calm, saying the time for “fervor” had passed with the end of the election.

“We hope everybody will calm down so things can slowly return to normal,” he said.

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EYE ON PARTY’S ASSETS

A war chest worth billions is about to come under scrutiny and may be up for grabs. A9