BLAME GAME IMMOBILIZES KMT ON DEFENSE BUDGET

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003283

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 08/08/2015
TAGS: PGOV TW
SUBJECT: BLAME GAME IMMOBILIZES KMT ON DEFENSE BUDGET

REF: 2004 TAIPEI 00839

Classified By: Classified By: AIT Director Douglas Paal, Reason(s):1.4
(B/D).


1. (C) Summary: KMT legislator and KMT Chairman-elect Ma
Ying-jeou advisor Su Chi told AIT that no compromise is
possible on the Defense Procurement Special Budget until
President Chen Shui-bian and his government make meaningful
concessions. Su acknowledged that Taiwan needs to improve
its defensive capabilities and expressed interest in
purchasing antisubmarine aircraft and upgraded anti-missile
defenses, but he argued that since President Chen and his
government had created the Special Budget deadlock, the KMT
is not in a position to take the initiative to move the
Defense Budget forward. The Deputy Director stressed that in
light of Taiwan's waning deterrent capability, it is unwise
of both the Pan-Blue and Pan-Green to put domestic political
concerns before Taiwan's security. Meanwhile Chairman-elect
Ma himself cryptically announced his "conditional support" of
the arms package pending a review by the KMT. And the Taiwan
Ministry of National Defense (MND) announced that the
government is considering reducing the Special Budget price
by moving one or more of the weapons systems into the regular
defense budget. End summary.


2. (C) On August 3, KMT legislator Su Chi, a supporter of and
foreign policy advisor to KMT Chairman-elect Ma Ying-jeou,
told the Deputy Director that many within the KMT, including
himself, recognize Taiwan's need to increase its self-defense
capability and are willing to go forward with an expanded
defense budget. He explained that he and other KMT
legislators support the purchase of certain weapon systems in
the Defense Procurement Special Budget, particularly the P-3C
antisubmarine reconnaissance aircraft and possibly the PAC-3
anti-missile systems, but they have strong reservations about
the purchase of submarines. Su argued that the Chen
government's refusal to consider breaking the Special Budget
package apart had brought discussions to a halt. (NOTE: As we
report Septel, Su also argued that the March 20, 2004 defeat
of a referendum on missile defense can be interpreted to
preclude purchase of PAC-III or other air defense systems.
END NOTE.)


3. (C) Su told the Deputy Director that the political divide
and animosity in Taiwan run deep. The DPP strategy of
attacking the KMT, then publicly blaming the KMT for its
unwillingness to cooperate, has generated enormous enmity
within the KMT, even among Su and other self-described
moderates. He also accused the DPP of attempting to
monopolize Taiwan's communication channels to Washington by
directing the Government Information Office (GIO) to omit KMT
representatives from the itinerary of journalists visiting
Taiwan, by excluding KMT leaders from pro-democracy forums,
and by using U.S. think-tanks and former USG officials to
criticize the KMT as obstructionist and "pro-China."


4. (C) Su stated that he fully understands Taiwan must
upgrade its defensive capabilities, but he explained that the
domestic political deadlock prevents the KMT taking the lead.
Any solution of the impasse, he insisted, must begin with
the President and his administration, including their
willingness to modify the Special Budget package and to make
the first conciliatory gestures, including consulting more
extensively with the KMT on defense issues. Without the
political cover of such a gesture, he explained, no one
within the KMT would be willing to risk being cast as a DPP
collaborator by supporting the defense budget. Even newly
elected KMT Chairman Ma Ying-jeou, he maintained, would be
unwilling to risk advocating for the Special Budget until
President Chen made concessions. Current Chairman Lien Chan,
he noted, had stated that "as long as the DPP government does
not cause any trouble," the KMT would be willing to approve
an arms procurement bill if the budget amount is
"appropriate" and can be spread between a special and normal
annual budget.


5. (C) The Deputy Director told Su that senior US officials
are perplexed by the insistence of Taiwan political leaders
on all sides to put Taiwan domestic political concerns above
Taiwan's need to modernize its defense capabilities,
particularly given US commitments under the TRA. He
cautioned that if Taiwan is unwilling or unable able to
commit increased resources to its own defense, it will
adversely impact the USG's ability to come to Taiwan's aid in
time of crisis should the USG chose to do so.


6. (U) Two days after Su Chi spoke with the Deputy Director,
President Chen publicly stated that one or more of the
proposed weapons systems might be shifted into the regular
defense budget, thus reducing the current NT $480 billion (US
$15 billion) size of the proposed Special Budget. The next
day, KMT Chairman-elect Ma Ying-jeou, commenting on a letter
from members of the U.S. House of Representatives Taiwan
Caucus, stated his "conditional support" of the arms package
pending an unspecified review by the KMT.
PAAL