[Congressional Record Volume 142, Number 135 (Thursday, September 26, 1996)]
[Senate]
[Pages S11422-S11424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         REPORT BY SENATOR PELL

  Mr. THOMAS. Mr. President, yesterday--in my capacity as chairman of 
the Subcommittee on East Asian and Pacific Affairs--I introduced into 
the Record a portion of a report prepared by the very distinguished 
ranking minority member of the Foreign Relations Committee, Senator 
Pell.
  The report, entitled ``Democracy: An Emerging Asian Value,'' details 
the Senator's recent trip to Asia. I was very interested in the 
distinguished Senator's observations because the countries he visited--
Taiwan, Vietnam, and Indonesia--fall within the jurisdiction of my 
subcommittee. I thought my colleagues would benefit by having the 
report readily available to them, and had a portion of it reproduced in 
the Record yesterday. But because of space considerations, Mr. 
President, only a portion could be reprinted.
  Consequently, today I ask unanimous consent to have the remainder of 
Senate Print 104-45 [pages 1 through 9] printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Democracy: An Emerging Asian Value


                                 taiwan

                            A. Introduction

       The political and economic development on Taiwan has been 
     truly amazing. For 40 years after Chiang Kai-Shek led his 
     defeated Nationalist Party (KMT) to Taiwan in 1948, the 
     government in Taipei was controlled by Mainlanders to the 
     exclusion and detriment of the native Taiwanese. The KMT's 
     political control was absolute and oppressive. But in the 
     economic sphere capitalism flourished. Taiwan became one of 
     the world's fastest growing economies and its citizens 
     enjoyed surging prosperity.
       Political liberalization began in the late 1980s under 
     President Chiang Ching-kuo, including the lifting of martial 
     law in 1986 and the legalization of opposition parties in 
     1989. Contested elections to the Legislative Yuan, the 
     government's main legislative body, took place in 1992.
       This year, democratization reached a new level with the 
     direct election of President Lee Teng-hui. Until this year, 
     the president had been elected by the National Assembly. Lee 
     himself had been a main proponent of this electoral change. 
     Lee's election represented the first time in 5,000 years of 
     Chinese history that the Chinese people directly chose their 
     leader. Four candidates ran for the Presidency; the three 
     losing candidates peacefully accepted the results of the 
     election.
       I have found these breathtaking political developments very 
     satisfying. In the 1970s and 1980s I was one of a small 
     number of American political figures who regularly criticized 
     Taiwan's authoritarian regime and the dominating KMT Party 
     for their political inflexibility, and I urged political 
     liberalization and reform. That Taiwan has come so far in 
     such a short time is truly impressive and is a great 
     compliment to the people of Taiwan and to their current 
     leaders.
       Democratization has brought new problems as well as 
     benefits to Taiwan. In the past the KMT had complete control 
     over the government. Now the party has the presidency, but 
     only a one-seat majority in the legislature, where three main 
     parties are represented: the KMT, the Democratic Progressive 
     Party (DPP) and the New Party. All politicians and government 
     officials are learning new ways of interacting under these 
     changed circumstances.
       As freedom of speech has grown in Taiwan, so too have 
     voices advocating a formal declaration of independence and 
     separation from China. As Taiwain's identity as a democratic 
     society has increased, President Lee has tried to raise its 
     international identity as well. The government has called for 
     Taiwan's membership in the UN and other international fora. 
     Senior leaders, including the President, have made 
     numerous visits abroad, some billed as private ``golf 
     trips,'' in what has become known as ``vacation 
     diplomacy.'' And some members of the DPP have openly 
     called for a formal declaration of Taiwan's separateness 
     from the Mainland.
       The People's Republic of China has reacted strongly and 
     negatively to the new internationally active Taiwan. Beijing 
     has seemed particularly provoked both by the idea of an 
     ``independent'' Taiwan and by the process of democratization 
     itself. Tensions between China and Taiwan, and between China 
     and the U.S., have risen in the last year to levels not seen 
     since the 1950s. China has held four sets of military 
     exercises clearly meant to intimidate Taiwan, the most 
     serious of which was just before the presidential elections 
     in March. One of Taiwan's greatest challenges in the next few 
     years will be managing relations with its largest and most 
     contentious neighbor.

                        b. Political development

       I had a very warm meeting with President Lee Teng-hui, who 
     spoke optimistically about the ``new history of China.'' 
     Naturally pleased with Taiwan's recent democratic exercises, 
     he made clear that he believes Taiwan's transition to a 
     totally democratic society is not yet complete. He spoke of 
     the work he feels must still be done, focusing not on 
     political institutions but on the people's minds and 
     expectations. He argued that the people of Taiwan still lack 
     a truly democratic mind set, a sense that free will can shape 
     their future. Arguing that he was following the philosophy of 
     Dr. Sun Yat-sen to first change the public sphere, then focus 
     on the private, he is now focusing on educational reform and 
     cultural change, along with judicial reform. He recognizes 
     that such changes take a long time--``maybe a hundred 
     years''--but that they are important. He feels this mission 
     is his personally, that if he, as the first directly-elected 
     president, does not undertake to make these changes, then an 
     opportunity for profound change will be missed.
       Yet structural challenges remain and structural changes are 
     continuing. Just before I arrived the Legislative Yuan, in an 
     unprecedented exercise of budgetary control, rejected the 
     Executive's request for funding of a fourth nuclear power 
     plant. The role of the President vis-a-vis the Premier is 
     also under discussion. Structurally, official power rests 
     with the Premier's office, with the President's power coming 
     as head of the KMT. In past practice, however, the President 
     has wielded considerable influence and Lee's popularity may 
     serve to increase that influence even more. President Lee and 
     National Security Council Secretary-General Ting Mou-shi both 
     mentioned that this was an on-going issue that would be 
     discussed at the next National Assembly meeting, expected to 
     take place this summer. Some opposition party members, 
     members of the Legislative Yuan and constitutional scholars 
     have questioned this trend and have recommended finding ways 
     to check the power of the Presidency, such as by increasing 
     the power of the legislative branch.
       President Lee also expressed the need for continued 
     economic liberalization and internationalization. He said 
     that the government's new direction is toward changing local 
     laws and regulations to be more open to foreign 
     investment. President Lee said his first priority will be 
     to take concrete steps toward this end, once his new 
     Cabinet is formed.
       President Lee sent his thanks to the U.S. Senate for its 
     support for the world's ``youngest democratic country'' and 
     especially for its support during the recent military threats 
     from the Mainland. He said that the U.S. carrier groups sent 
     to the Taiwan Strait helped to insure stability during the 
     presidential election in March, and he thanked us for the 
     many Congressional resolutions of support. Taiwan's gratitude 
     for U.S. support was reiterated by all other government 
     officials with whom I met in Taipei.
       Finally, President Lee said that relations between the U.S. 
     and Taiwan, while always good, would be particularly close 
     now that Taiwan was a ``full-fledged democracy.'' He said he 
     hoped that the U.S. would continue to ``support us under the 
     wording and spirit'' of the Taiwan Relations Act (TRA), a 
     request that National Security Council Secretary-General Ding 
     also made to us. The TRA, passed by Congress in 1978, 
     requires the U.S. to ``make available to Taiwan such defense 
     articles and defense services in such quantity as may be 
     necessary to enable Taiwan to maintain a sufficient self-
     defense capability.'' Taiwan would very much like to increase 
     its defense purchases from the U.S.

[[Page S11423]]

                   C. Taiwan-Mainland China relations

       Beijing has accused President Lee of abandoning the long-
     standing ``one-China'' policy by seeking a higher 
     international profile for Taiwan. President Lee assured us 
     that this is not true, though he said his government's 
     definition of a one-China policy is quite different from 
     Beijing's. He said that the reality today is that there are 
     two distinct political systems and that there would only be 
     ``one China'' after the two sides reunified. His government, 
     of course, wants to see one Republic of China, not one 
     People's Republic of China.
       In President Lee's vision, one China would also include a 
     truly autonomous Tibet. While arguing that Tibet is a part of 
     China, he said that there would be no problems there if 
     Beijing allowed Tibet the freedom to make its own internal 
     decisions. A truly ``autonomous'' region should expect no 
     less. President Lee also voiced his respect and admiration 
     for His Holiness, the Dalai Lama.
       President Lee is, of course, carefully watching how Beijing 
     manages the takeover of Hong Kong, seeing this transition as 
     an indication of how Beijing would manage reunification with 
     Taiwan. Beijing's recent threats to dismantle Hong Kong's 
     legislature and its plans to garrison a larger number of 
     troops in Hong Kong than are currently there make Lee 
     pessimistic that a China-Taiwan reunification, under current 
     circumstances, could go smoothly.
       Beijing has particularly objected to Taiwan's quest for 
     membership in international fora, especially the UN. 
     Officials in Taipei told me, in what appears to be an attempt 
     to defuse this contentious issue, that Taiwan is not asking 
     for an actual seat in the UN, but only for a study on how 
     Taiwan could participate in some UN agencies and meetings 
     without actual membership. Officials stressed that the 
     twenty-one million people of Taiwan deserve some sort of 
     representation in the world body, but what form of 
     representation is still an open question. Since I have 
     returned, there have been news reports that the government 
     is pulling back even more on this effort and may focus 
     instead on attaining membership in the World Bank or the 
     International Monetary Fund.
       Officials in Taipei repeated their commitment to dialogue 
     with the Mainland and to strengthening ties that could lead 
     to a more easy co-existence. Government officials 
     acknowledged support within Taiwan's business community for 
     direct links that would facilitate trade, but argued that 
     such links could only occur if Beijing recognized Taipei as 
     an equal partner in negotiations. There was some talk, I was 
     told, of opening representative offices along the lines of 
     what Taiwan and the U.S. have in their respective capitals, 
     but that idea, too, was conditioned on the Mainland's being 
     ``realistic'' in dealing with Taiwan as a separate entity.
       A meeting with two representatives of different factions of 
     the DPP, Mark Chen and Trong Chai, highlighted the divisions 
     within the DPP on how to handle relations with the P.R.C. 
     Chai, from the ``Welfare State'' faction, believes that 
     Taiwan should hold a plebiscite on the question of 
     independence. Without independence, this faction believes, 
     the rest of the world will recognize only the P.R.C. 
     Eventually, they believe, Taiwan will be forcible 
     incorporated into the mainland and lose the freedoms its 
     people enjoy today.
       Chen argued that democratization in Taiwan was complete in 
     terms of its system (although he said the KMT still holds an 
     unfair share of the resources necessary to win a presidential 
     election or to gain the majority in the legislature). He 
     argued that, with 21 million people and a democratic system, 
     Taiwan has all the attributes of a full-fledged country and 
     asked what more it takes for the international community to 
     recognize it as one. Both men wanted to know how that 
     community, and especially the U.S., would react if 
     reunification were not handled peacefully. Neither accepted 
     the thesis that a declaration of independence by Taiwan would 
     precipitate a non-peaceful reaction, from the P.R.C.
       I should note that I have known and worked closed with Dr. 
     Chai and Dr. Chen since the late 1970s when they were 
     expatriate native Taiwanese activists in the United States. 
     As the political system liberalized, they sought to return to 
     their native land. That they are now back and participating 
     vigorously in Taiwan's newfound democracy is another 
     remarkable sign of what has occurred in Taiwan in a few short 
     years.
       The exciting thing about Taiwan is that democracy, while 
     still young, is functioning. It is clear from my discussions 
     that officials are trying to work out new power arrangements 
     within and between the different branches of government. The 
     government in Taipei must now formulate domestic and foreign 
     policies that reflect the often-conflicting views of the 
     population at large. The three main parties--the KMT, the DPP 
     and the New Party--all have different views as to how this 
     should be done. But the process they are using to work 
     through these differences and to develop new power 
     arrangements is democracy in action.


                                vietnam

                            A. Introduction

       It has been said of the Communist Party in Vietnam that, 
     after winning the war with Western capitalists, it has now 
     lost the peace. Economic reforms begun in the 1980s, known as 
     doi moi, have brought tremendous change to Vietnam's level of 
     economic development. There are also signs that these reforms 
     could lead to some limited, but still important, changes in 
     the country's politics as well. In the most recent 
     Constitution of 1992, the Party is still specified as the 
     leading force in both the State and in society at large while 
     other parties are banned. Nonetheless, last year in elections 
     for local, provincial, and then national assemblies, some 
     candidates ran as independents.
       The Communist leadership in Vietnam clearly aims to 
     continue economic development, while tightly controlling the 
     direction of that development and prohibiting political 
     liberalization. Their role models for this seem to be the 
     early years of economic transformation in Singapore, South 
     Korea and Taiwan. The government's plan for implementing this 
     goal will be a major topic of discussion at the next Party 
     Congress meeting, being held this month. Other important 
     issues to be considered at this meeting include legal reform 
     and potential leadership changes.
       Vietnam's economic changes have been dramatic since the 
     government introduced market-liberalization policies in 1989. 
     The industrial and services sectors, for example, have been 
     growing at an average of 9% per year. Agriculture, which 
     accounts for 73% of all employment, has grown at a much 
     slower 3% per year. Yet here, too, reforms have had a 
     profound effect; Vietnam has moved from an importer of rice 
     to the world's third largest exporter (after Thailand and the 
     U.S.) GNP per capita remains low, however, at roughly US$230 
     at given exchange rates (although real incomes may be higher 
     because much of the economy involves non-cash transactions). 
     The government's current goal is to double per capita GNP by 
     the year 2000.

                       B. Political developments

       The Vietnamese government remains under the control of the 
     Communist Party. But the Vietnamese people appear to enjoy 
     greater individual freedom than in most other Communist 
     countries. Analysts have reported that people do not fear 
     speaking up against certain policies. Local officials, while 
     still mostly Communist effect on their daily operations and 
     decisions.
       This attitude was reflected in my meetings with top 
     officials, who stressed repeatedly that they were aiming for 
     a government ``of, for, and by the people.'' While final 
     authority continues to rest with a small group of Politburo 
     leaders who operate without scrutiny or accountability, much 
     was made of the ability of individual citizens to complain to 
     their National Assembly Committee representative or to have 
     input at the local level on documents being prepared for the 
     Party Congress.
       When asked about individual rights, officials quickly said 
     that, while they recognized the universality of human rights, 
     the promotion of these rights has to take place within the 
     context of Vietnam's circumstances today, which is 
     different from that of the West. I was repeatedly told 
     that an individual's fundamental right was to live in a 
     free and independent country, which Vietnam had only 
     achieved after a long and difficult struggle. Officials 
     stressed that ``Asian values'' were most appropriate for 
     their society, meaning that individuals can not exercise 
     their rights at the expense of others or the law. In spite 
     of these arguments, and the claim that it is not 
     Vietnamese policy to jail political dissidents, officials 
     admit that their legal system ``needs work.''
       To the end, the government is considering several proposals 
     to further develop the rule of law. Decisions on these 
     proposals will be made at the June Party Congress.
       It was also stressed to us that Vietnam is going through a 
     period of great change, a process of ``nation-building.'' 
     During this time, officials say, they will consider 
     suggestions and ideas from other countries, but will apply 
     any they adopt to Vietnam's specific conditions. The National 
     Assembly President, Nong Duc Manh, said that there was a 
     great interest in the National Assembly for more contact with 
     the U.S. Congress. Aside from being able to learn about the 
     technical aspects of our system, Manh said that he wanted 
     both sides to gain a greater understanding of each other's 
     legislative institutions and practices.
       The decisions that will be made at the upcoming Party 
     Congress about policy reforms and about the changes in--or 
     retention of top Party officials will provide a critical 
     roadmap for all Vietnamese development--economic, political 
     and social--for the next 10 years. It will be an indication 
     to ordinary Vietnamese and to the outside world were the 
     leadership plan to move the country.

                        C. Economic development

       An entrepreneurial spirit pervades the streets of Hanoi. 
     Children and young women aggressively pursue foreigners 
     hawking post-cards and good-luck decorations, refusing to 
     accept repeated ``No thank you's.'' Storefront shops offer a 
     wide variety of goods and services, such as jewelry, linens, 
     housewares, mufflers and mechanical repairs. I was told that 
     most of these stores were probably ``illegal,'' meaning that 
     their owners had likely not obtained the licenses or paid the 
     taxes required to operate legally. As illegal operations, 
     they were subject to random ``crackdowns'' by the police. As 
     I was leaving Hanoi, I saw this practice at work. A police 
     truck randomly stopped at street stalls and police got out to 
     talk with store owners. I was told that the police in this 
     case were most likely collecting their ``cut.'' Indeed, the 
     truck was loaded with furniture which may well have been 
     collected as payment.

[[Page S11424]]

       Deputy Vice Foreign Minister Le Mai told me that the 
     largest mistake Vietnam ever made was implementing a command 
     economy. He said the laws of capitalism ``just are,'' which I 
     took to mean that they are the natural order of things. He 
     said the private sector is recognized in the 1992 
     Constitution as equally important to the State and Collective 
     sectors. He acknowledged that private ownership of land has 
     not yet been recognized and that this creates an incentive 
     problem, especially in agriculture. Mai said that Vietnam was 
     moving slowly in this sector to avoid the chaos it 
     believes came to Eastern Europe after private ownership of 
     land was allowed.
       While Vietnamese officials repeatedly stressed their desire 
     for increased foreign investment to stimulate further 
     economic development, several barriers exist for foreign 
     companies trying to operate in Vietnam today. I benefited 
     immensely from a lengthy meeting with American business 
     representatives struggling to do business in Hanoi today. One 
     of the problems they cited is the requirement for a license 
     for every aspect of a company's operation. Licenses are 
     narrowly drawn, limiting a company's activities. Such a 
     system naturally lends itself to corruption. Many companies 
     make use of middlemen to deal with these headaches and such 
     services add appreciably to costs.
       Another problem arises from the lack of private ownership 
     of property. Without private ownership of real estate, 
     businesses cannot mortgage their property to raise capital 
     for further investment. Foreign investors also lack direct 
     access to a distribution system and are forbidden from 
     holding inventory.
       The heart of the problem for foreign investment, however, 
     is the lack of a rule of law. No one can count on the 
     government to honor a contract and there is no recourse to 
     objective arbitration. Again, this leads to corruption ``from 
     top to bottom'' because officials may demand a bribe to live 
     up to what they have already promised. One U.S. businessman 
     referred to contracts as ``water soluble glue.'' Unless or 
     until government officials take significant steps toward 
     creating a sound and transparent legal system, foreign 
     investment will be hampered.

                       D. Relations with the U.S.

       This visit was only my second to Vietnam and my first to 
     Hanoi. My first trip was with Senator Mansfield in 1962 
     during the early stages of the war. What surprised me above 
     all else was the friendliness of the people and their 
     willingness, even eagerness to deal with Americans, even 
     though it was only some 20 years ago that American bombs were 
     raining down on their country. Other Americans I met there 
     also noted their sense that the Vietnamese were eager for 
     closer relations with the U.S., in spite of our two 
     countries' recent history.
       Vietnamese officials welcomed President Clinton's 
     announcement, the week before I arrived, of his nomination of 
     Congressman Douglas B. ``Pete'' Peterson to be Ambassador to 
     Vietnam. They agreed that having a former prisoner of war as 
     Ambassador symbolized the willingness of both countries to 
     put the war behind them. They seemed to understand that the 
     dynamics of U.S. electoral politics could delay his 
     confirmation and actual posting to Hanoi.
       All officials in Hanoi, both Vietnamese and U.S., went to 
     great lengths to assure me that cooperation on the most 
     contentious bilateral issue--POW/MIAs--was strong and 
     productive. At a lunch at the Charge's residence, U.S. 
     embassy officials were unanimous in their assessment of 
     Vietnamese cooperation: it could not be better. The U.S. 
     military official in charge of the issue in Hanoi described 
     how his team was able to investigate every lead they 
     received, to go where ever they wanted and to view all 
     documents they requested. He emphasized that there were no 
     roadblocks from the Vietnamese. I am convinced that the 
     government of Vietnam is being fully cooperative with the 
     U.S. on the POW/MIA issue and that, while this cooperation 
     must continue, the issue should not in any way hamper 
     further development of the bilateral relationship.
       Le Mai raised an interesting point with us. He said that 
     his government had tried to cooperate whenever and wherever 
     it could, but that he and his colleagues often felt U.S. 
     demands were unrealistic. He pointed out that only weeks 
     before we arrived a U.S. commercial aircraft had crashed in 
     the Everglades in Florida. Despite knowing exactly when and 
     where the plane went down, and using the best equipment and 
     best trained people to recover the remains of passengers, the 
     U.S. had yet to recover a single identifiable remain. Yet if 
     the Vietnamese government cannot produce finding of a crash 
     that may have occurred 25 years ago, in a broadly-identified 
     area, then critics in the U.S. will accuse them of 
     stonewalling.
       In discussing regional security issues, officials 
     emphasized their desire for peace and stability to foster an 
     environment conducive to economic growth for all. Deputy 
     Foreign Minister Le Mai emphasized the need to have a 
     ``balance'' between the various powers in the region, such as 
     the U.S. and China, and U.S. and Japan, or Japan and China. 
     While Mai did not name China as a threat regional stability, 
     in the context of a discussion of recent Chinese military 
     aggression in the Spratly Islands and the Taiwan Strait, he 
     suggested that if ``any one country'' tried to increase its 
     power, Vietnam would be open to an increasing U.S. presence 
     to preserve the balance.
       Government officials went to great lengths to stress the 
     importance of continuing the normalization of relations 
     between the U.S. and Vietnam. They also emphasized the 
     ``great potential'' of improved economic ties. Specifically, 
     Hanoi would like Washington to grant most-favored-nation 
     (MFN) tariff treatment, Export-Import Bank financing, and 
     Overseas Private Investment Corporation (OPIC) guarantees.
       Perhaps the strongest argument for increased economic ties 
     between the two countries came from U.S. business people 
     living in Hanoi. They argued that through negotiating the 
     trade agreement necessary to grant MFN and OPIC, Hanoi would 
     be forced to address some of the more difficult problems 
     facing U.S. investors, as described above. They further 
     emphasized that by providing these trade preferences, the 
     U.S. government would be helping U.S. businesses, not just 
     the Vietnamese. Likewise, by denying them, the government 
     hurts U.S. businesses and encourages the Vietnamese to shop 
     elsewhere.
       With both logic and passion, this business group argued 
     that, despite the many structural problems they face daily in 
     Vietnam and despite the fact that it is harder to do business 
     there than in Russia or Mongolia, it was in both their 
     personal interests and in our national interests to say. Over 
     the next 20 years, Southeast Asia will be one of the 
     fastest--and perhaps the fastest--growing regions in the 
     world. Vietnam's geographic position makes it a natural hub 
     for all types of trade and transportation. The question is 
     not if Vietnam becomes another dynamic Asian market but when 
     it does, will the U.S. be there? If our companies do not gain 
     a pres- ence there now, we risk losing market access later, 
     possibly permanently. This is a problem the U.S. faces all 
     over Asia where our experience and involvement is 
     generally lacking.
       This business group believes that Vietnamese leaders 
     understand the problems in their legal system and are willing 
     and able to correct them, albeit slowly. Vietnam's membership 
     into ASEAN will help to guarantee the further development of 
     a stable market attractive to even more foreign investment. 
     American products, from consumer goods to elevators to 
     computers, are popular in Vietnam. U.S. businesses have a 
     tremendous advantage because the Vietnamese respect the 
     quality of our products and would choose our companies if the 
     financing were equal.
       Finally, this group said that their working relationship 
     with the U.S. Embassy in Hanoi could not have been better. In 
     a centrally-planned economy, government-to-government 
     relations are the only legitimate ones; these companies could 
     not function without the Embassy. Even under these 
     circumstances, they stressed that their relationship with the 
     Embassy was better than in any other country they had worked. 
     I, too, was very impressed with the Embassy staff, especially 
     with Desaix Anderson, our Charge d'affaires there.

                          ____________________