05.07.2001
Opposition lawmakers launch a new attempt to oust Premier

• A group of Kuomintang legislators on Friday decided to launch a new "May 4 Movement", threatening a no-confidence vote against Premier Chang Chun-hsuing should the Cabinet fail to secure GDP growth of 5% and an unemployment rate of less than 4% in 2001. Although we forecast GDP growth of only 3.7% and an average unemployment rate of over 4% this year, we do not expect opposition lawmakers to go ahead with the no-confidence vote.

• No-confidence motions require one-third support of the 219 lawmakers in the Legislative Yuan and a simple majority to pass. If the motion wins, the President must then nominate a new Premier or dissolve parliament and call for early elections. We are of the view that such an outcome is unlikely as the KMT will avoid losing its majority in the legislature ahead of year-end elections. We do not expect such a vote to take place, despite reports that the proposal has already received support from 103 lawmakers.

• Opposition lawmakers are likely to continue to pressure Taiwan's beleaguered DPP on the eve of its first anniversary (May 20) in office, despite attempts by the DPP to play down negative news. For example, the release of generally anticipated weak 1Q01 GDP figures has been suspiciously moved forward to May 25, when President Chen leaves for an overseas trip. Traditionally, quarterly GDP results are announced by the middle of the second month of each quarter. The political situation could further dampen sentiment in the stock market in the weeks ahead.

IrmakSurenkok@Primasia.com +886-[0]2-2547-8873