PRINCETON, New Jersey — Taiwan’s public prosecutor has indicted the wife of President Chen Shui-bian for embezzling public funds. Chen, as a sitting president, cannot be indicted even though the prosecutor says he has evidence to prove his guilt. But Chen’s legacy was already in tatters.

Chen can remain in office until his term ends in 2008, or he could resign now to let his vice president and pro-independence Democratic Progressive Party (DPP) rebuild to win the next election. Whatever his decision, Taiwan’s first DPP president will go down in history as a pathetic failure, because he used his office to divide the island’s citizens, as if his domestic political opponents were Taiwan’s mortal enemies.

The root of Chen’s moral demise is something the classical Greeks identified: hubris. Chen’s popularity among his party followers, whose fervency often bordered on fundamentalism, changed him from a person with deep democratic instincts into a textbook case of a man who regards power and its prerogatives as his by right.

Chen once had political courage. Jailed years ago for his anti-Kuomintang (KMT) activities, he stood up at great odds to the Chinese Communist Party, which sought in vain to subjugate him in cross-Strait relations and in global politics. The world has largely deserted Taiwan and its 23 million people — the only democracy among 1.2 billion Chinese.

Only 24 countries, mostly tiny island states, maintain diplomatic relations, while all but one of the world’s major powers and all important international institutions, including the United Nations, dance to the mainland’s tune.

Chen’s behavior did not help. Indeed, he even angered the United States, Taiwan’s only military protector, by his frequent confrontational tactics, such as pushing Taiwan toward independence, which runs counter to America’s long-standing “one-China” policy.

After winning the presidency, Chen could have risen above theatrics by focusing on two Taiwanese strengths: its economy and its unbroken humanist Chinese cultural tradition.

Instead, Chen balked at further integration into the global economy, refusing to open all of Taiwan’s economic sectors to foreign participation, which would have strengthened Taiwan’s competitiveness and efficiency. For years, forward-looking Taiwanese industrialists, including many high-tech entrepreneurs, urged Chen to de-bureaucratize and de-politicize Taiwan’s increasingly isolated economy. Failing to persuade him, they decamped to mainland China.

Unwisely, Chen went out of his way to shut out mainland Chinese capital and retain barriers to other foreign investors in order to protect the domestic businesses of his political allies.

Indeed, indicators of economic freedom and competitiveness compiled by the Heritage Foundation, the Cato Institute, the World Economic Forum and others show that Taiwan’s relative ranking has stagnated or even declined on Chen’s watch. This stands in sharp contrast to the communist mainland, which has reinvented itself to become one of world’s more open, competitive, and dynamic economies.

As a result, big international corporations and Wall Street banks now flock to China, bypassing Taiwan. They do so not because Taiwan is small — witness Hong Kong and Switzerland — but because it retains too many restrictions against foreign institutions.

Taiwan’s missed opportunity reflects its government’s sheer incompetence, arrogance and ignorance. Chen squandered six valuable years as his administration engaged in polemics with opposition parties while he pandered to the extreme wing of the DPP and mobilized his government to “de-Sinicize” Taiwan culture.

Indeed, Chen even argued that the Taiwanese were never Chinese. He ordered the Education Ministry to revise school textbooks to promote the idea that the Taiwanese people were fundamentally different, practically a different race from the Chinese. Clearly, Chen’s hatred of dictatorship, whether Communist or KMT, consumed him, limiting his ability to think clearly.

In fact, Taiwan’s moral superiority over mainland China lies not only in its democratic institutions, but also in its unbroken adherence to the ancient culture that the Chinese communists nearly succeeded in annihilating after coming to power in 1949. Ironically, it is China’s rulers who are now scrambling to resurrect Confucius as a moral anchor in a culture dominated by the pursuit of money.

Chen should have celebrated Taiwan’s “Chineseness” proudly and loudly, thereby distinguishing the island from the barbaric legacy of the Chinese Communist Party. Instead, Chen’s futile effort to “de-Sinicize” Taiwan created a wastefully divisive contentious society, pitting “mainlanders” and “locals” against each other.

Chen’s record suggests he will hang on to his failed presidency. He will use his legal training to fight on technicalities. But to the rest of the world, Chen has been revealed as a petty liar over a pitiful amount of money. He and his wife lied about their involvement. Their close aides have confessed that they forged documents and perjured themselves to protect their political boss. What a pathetic ending for a man who could have become one of the most important leaders in modern Chinese history.

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