DPP LEGISLATORS DISCUSS ELECTION PROSPECTS AND

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001416

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/20/2031
TAGS: PGOV PREL TW
SUBJECT: DPP LEGISLATORS DISCUSS ELECTION PROSPECTS AND
ARMS PROCUREMENT WITH DIRECTOR


Classified By: AIT Director Stephen M. Young, Reasons: 1.4 (b/d)


1. (C) Summary: A group of DPP legislators told the Director
that the new election format for the Legislative Yuan (LY)
will disadvantage the DPP in 2007 and future LY elections.
However, the upcoming completion of three major
transportation projects and a strong performance by Premier
Su on the economy and fighting crime could boost DPP chances
in the 2007 LY and 2008 presidential elections. The group of
DPP legislators was divided over the possibility of progress
in the LY on arms procurement in the coming weeks. End
Summary.

Defense Issues
--------------


2. (C) During an introductory lunch on April 19, Democratic
Progressive Party (DPP) legislators Lee Wen-chung, Shen
Fa-hui, Lin Cho-shui, and William Lai (Ching-te) discussed
the arms procurement issue and DPP election prospects with
the Director. Lee Wen-chung, the leading defense expert in
the DPP LY caucus, told the Director that, based on
discussions with Kuomintang (KMT) members of the LY Defense
Committee, he was optimistic there could soon be movement on
the arms procurement issue. Lee noted that KMT polling shows
public support for arms procurement is increasing, and he
also believed that KMT Chairman Ma Ying-jeou wants to improve
the image of the KMT that was sullied by its recent unpopular
rejection of the government's nominee for prosecutor general.
DPP defense preferences, he said, include procuring P-3C ASW
aircraft and funding preliminary design work for submarines,
while bowing to political necessity in postponing PAC-III
procurement.


3. (C) In contrast to Lee, William Lai doubted there will be
movement on arms procurement in the near term. Lai pointed
out that the KMT had not fulfilled earlier promises of
movement on the issue. He also argued that Ma will be
reluctant to press for movement because he wants to appease
the Deep Blue, who are leading opponents of arms procurement.
KMT resistance to arms procurement has not hurt the party at
the polls and will only become a factor in the 2008
presidential election. Therefore, Lai predicted, Ma will not
move on the issue until 2007, when he will need to do so for
his presidential campaign.

Election Prospects and Political Trends
--------------


4. (C) Lee, Lin, and Shen were pessimistic about DPP
prospects in upcoming major elections over the next two
years: Taipei and Kaohsiung mayors in 2006, the LY in 2007,
and the presidency in early 2008. The best the DPP can hope
for is to achieve a split in the mayoral contests by winning
Kaohsiung, win just over one-third of the seats in the 2007
LY elections, and lose the 2008 presidential election by a
narrow margin, Lee suggested.


5. (C) The legislators did not know whether former premier
Frank Hsieh might consider running for Taipei mayor, but
noted that the DPP is unlikely to win in Taipei no matter who
the candidate is. Those most interested in persuading Hsieh
to run are the DPP candidates for the Taipei City Council
because they think Hsieh can increase DPP votes, boosting
their own chances.


6. (C) Lin was especially pessimistic about DPP chances in
the 2007 LY elections, when seats will be reduced from 225 to
113, and the new election districts will have single rather
than multiple representatives. The DPP will start out in the
2007 LY election with a ten-seat deficit, Lin said, because
the KMT and its allies will have a lock on the smallest
districts -- Matsu, Kinmen, Penghu, and Taitung -- and most
likely all six seats reserved for aborigines. This deficit
plus the poor performance by the DPP government will hurt the
DPP at the polls, Lin argued, and he predicted that the DPP
will continue to be the minority party in the LY for decades
to come.


TAIPEI 00001416 002 OF 002



7. (C) Lai argued that DPP prospects are not as bleak as
portrayed by his colleagues. Three major transportation
projects are due to be completed prior to the 2007 LY
elections: the Taipei-Ilan Expressway, the North-South High
Speed Railway, and the Kaohsiung Metro. Voters will
appreciate the convenience of these projects and will tend to
forget the scandals involving the latter two projects. If
the economy continues to do well, that will also help the
DPP. The problem now, according to Lai, is that economic
growth is benefiting the top 20-30 percent of the population
but not the remainder, who feel worse off than in the past.
DPP prospects will also be boosted if Premier Su Tseng-chang,
the party's leading presidential candidate, is able to prove
himself on issues such as fighting crime. Finally, the DPP
has a stronger position than the KMT on the issue of national
identity (unification versus independence),which will be a
major issue in the 2008 presidential election.


8. (C) All four legislators agreed that Taiwan is heading
toward a two-party political system because it will be more
difficult for small parties to win seats in the new LY
districts, which will have single rather than the current
multiple representatives. Of the two minor parties, the
People First Party (PFP) will have greater difficulty
surviving because a large portion of its base supporters have
already shifted their loyalties toward the KMT under Ma
Ying-jeou. The Taiwan Solidarity Union, which has a small
but stable base, hopes to survive by winning party
representative seats in the new LY. (Note: Under the new
system, voters will have two votes, one for a district
candidate and one for a political party. Thirty-four seats
in the new LY will be allotted according to the votes
received by each political party. End Note.)

Comment
--------------


9. (C) The 2007 LY elections may be a political time bomb
for the DPP in general and will certainly be one for numerous
DPP legislators, especially in northern Taiwan, who will lose
their seats. Barring a change in the political landscape,
the pan-Green stands to come out of the 2007 LY elections
with a significantly reduced percentage of seats. For the
reasons pointed out by Lai and because the KMT and Ma may
make mistakes, the DPP does not need to be overly pessimistic
at this early stage about the 2008 presidential election.
Premier Su, who can strike a chord with the ethnic Taiwanese
that Mainlander Ma cannot, has the potential to be a strong
contender in 2008 if he can maintain his distance from
President Chen. Despite Lai's analysis of the defense issue,
we think Ma would prefer to deal with arms procurement now
rather than later to put the issue behind him before the
presidential campaign heats up.

YOUNG