DATE=12/14/1999 TYPE=BACKGROUND REPORT TITLE=YEARENDER: TAIWAN NUMBER=5-44982 BYLINE=STEPHANIE MANN DATELINE=WASHINGTON INTERNET=YES CONTENT= VOICED AT: INTRO: Taiwan President Lee Teng-hui is sticking by his position that any dealings between Taipei and Mainland China should be on a state-to-state basis. That assertion -- first made in July and repeated as recently as this month (mid-December) -- is one of the most significant events affecting Taiwan during 1999. Correspondent Stephanie Mann reports another event that greatly marked Taiwan's year was the devastating earthquake in September. TEXT: An estimated 24-hundred people died when the earthquake struck central Taiwan on September 21st. The quake measured seven-point-six on the Richter scale and caused about 14-billion-dollars in losses. Taiwan specialist Bruce Dickson says the size of the earthquake and the scope of its devastation had a serious psychological impact on the people of Taiwan. // DICKSON ACT ONE // It also revealed the rather slipshod building practices that had gone on. A lot of the devastation and the deaths and casualties that resulted were the consequence of improper building practices and not going by building code. This has had a continuing political impact as the various political parties have been criticized for allowing this type of construction to go on. // END ACT // Professor Dickson, the Director of the Sigur Center for Asian Studies at George Washington University, says the earthquake's full impact on the economy has yet to be seen. // DICKSON ACT TWO // It is expected that the overall growth of Taiwan's economy will be reduced to some extent because of the earthquake. A lot of the key industries, such as the computer industry and other high-tech areas were affected, and these are some of the areas where Taiwan's key exports are located. So, that will indeed have at least a short-term impact on Taiwan's economic growth. // END ACT // Taiwan and China policy analyst Robert Downen says newly released statistics show Taiwan's economic growth declined in the third quarter of the year because of the earthquake. But Mr. Downen says fourth-quarter figures are expected to improve, and he does not expect the earthquake to have a lasting effect on Taiwan's economy. // DOWNEN ACT ONE // I have just recently seen statistics that, despite the earthquake, they are forecasting that the growth rate for this year, 1999, will still end up at five-and-a-half-percent, which is pretty remarkable, particularly when you consider the East Asia economic slump of the last couple of years. // END ACT // Mr. Downen, who was a U-S State Department officer in the 1980's, says the earthquake was a major tragedy for Taiwan, but he says Taiwan and its people are remarkably resilient. He expects them to recover from the earthquake just as they have managed to cope as Taiwan continued to lose its diplomatic status during the past 25-years. Analysts say a desire to strengthen Taiwan's international position is partly what prompted President Lee Teng-hui to make his call for equal state-to-state treatment with mainland China. Professor Dickson says President Lee's comment prompted a firestorm of negative reaction in Washington, Beijing, and many other capitals, but the reaction in Taiwan was mostly positive. // DICKSON ACT THREE// It responds to the public's desire to have a more prominent role in international affairs, a status that is more in keeping with its record of economic and political progress. Over the years, Taiwan has been either expelled or excluded from virtually all of the key international organizations. Its diplomatic ties have dwindled to less than 30-countries, mostly small Latin American and African countries. // END ACT // And Mr. Dickson says many people feel that Taiwan deserves more respect than it is given. The most prominent event facing the people of Taiwan as they enter the year 2000 is a presidential election in March. It will be Taiwan's second direct popular election for president. Robert Downen says the election campaign shows how Taiwan has opened its political system and made more progress in democratizing than many other Asian countries. // DOWNEN ACT TWO // The fact that there has been such an open multi- party system in evidence this year, and even challenges within parties, that it really demonstrates that at long last Taiwan, the Republic of China, has really got a very healthy and vigorous political system. And it really sets a good example, I think, for the rest of East Asia. // END ACT // The so-called "China issue" - that is, the threat posed by China, and whether and how to reunite with the mainland - has always been part of Taiwan politics. But analysts say now that the ruling party says China should treat Taiwan on an equal state-to- state basis, the positions of the various political parties have moved closer together. So, they say voters are not likely to cast their ballots solely on the basis of a candidate's position on the question of unification or independence. // REST OPT // Among a field of several candidates, there are three major contenders. Vice President Lien Chan is running as the candidate of the ruling Nationalist Party, called Kuomintang. A veteran Kuomintang member, James Soong, split from the party to launch an independent bid for president. And the candidate of the main opposition party, the Democratic Progressive Party, is Chen Shui-bian. Bruce Dickson says the future of the Kuomintang is in doubt if either of the leading opponents -- Mr. Soong or Mr. Chen -- win the election. The Kuomintang has ruled Taiwan since 1949, when the nationalists fled the mainland as the communists came to power. (SIGNED) NEB/SMN/RAE 14-Dec-1999 11:12 AM EDT (14-Dec-1999 1612 UTC) NNNN Source: Voice of America .