Identifier
Created
Classification
Origin
06TAIPEI229
2006-01-24 06:16:00
CONFIDENTIAL
American Institute Taiwan, Taipei
Cable title:  

KMT CHAIRMAN MA SEEKS TO TAKE THE INITIATIVE ON

Tags:  PGOV PREL MARS MASS MCAP TW 
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C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000229 

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/24/2016
TAGS: PGOV PREL MARS MASS MCAP TW
SUBJECT: KMT CHAIRMAN MA SEEKS TO TAKE THE INITIATIVE ON
ARMS PROCUREMENT AND DEFENSE POLICY

REF: TAIPEI 0189

TAIPEI 00000229 001.2 OF 002


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

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000229

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/24/2016
TAGS: PGOV PREL MARS MASS MCAP TW
SUBJECT: KMT CHAIRMAN MA SEEKS TO TAKE THE INITIATIVE ON
ARMS PROCUREMENT AND DEFENSE POLICY

REF: TAIPEI 0189

TAIPEI 00000229 001.2 OF 002


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


1. (C) Summary. After sixteen months of mechanically
obstructing the Defense Procurement Special Budget weapons
systems, the KMT under the leadership of Chairman Ma
Ying-jeou is moving to develop an alternative proposal on
defense policy and arms procurement. Ma has established a
task force to draft a KMT arms procurement plan for
presentation to the spring session of the Legislative Yuan
(LY). While there are many ideas floating about, early signs
suggest the end product could come out in support of
infrastructure strengthening, hardening weapons systems, and
ammunition procurement, with a possibility of support for one
of the three Defense Special Budget weapons systems, the P-3C
ASW aircraft. End Summary.

Ma Moves Gingerly on Defense
--------------


2. (C) KMT Chairman Ma Ying-jeou made a first cautious and
very secretive effort to move the party beyond the pan-Blue's
total obstructionism of defense procurement in late July,
just after his election as Chairman. People First Party
(PFP) legislator Lin Yu-fang told AIT that Ma invited him and
several pan-Blue defense specialists to establish a defense
committee to reassess the pan-Blue position on defense
procurement. When the maverick legislator Li Ao heard about
the initiative and publicly castigated Ma for "selling out"
the pan-Blue, however, the newly-elected and as-yet insecure
Chairman-elect quickly pulled back and let his defense
initiative die a quiet death.


3. (C) Following the KMT's overwhelming victory in the
December 3 local elections, which effectively secured Ma's
leadership of the party, however, Ma moved once again,
gingerly but with greater confidence, to deal with the
defense procurement issue. On December 22, he and People
First Party (PFP) Chairman James Soong agreed that Taiwan
needs to maintain appropriate defense capabilities with the

caveat that they oppose buying "unreasonably" expensive
weapons. (Comment: Given that the 31 PFP legislative votes
are essential to the KMT-led pan-Blue legislative majority,
cooperation with Soong will be essential for any LY action.
End Comment). Over the next two weeks, Ma moved forward on
defense procurement, telling VOA in an interview on December
26 that the KMT conditionally supports "reasonable arms
procurement" and is not opposed to raising the defense budget
to 3 percent of Taiwan's GDP. On January 7, Ma told the
media that the KMT is moving toward an internal consensus on
arms procurement, though it still has not agreed on specific
weapons systems, and that it hopes to present a
"comprehensive framework" proposal to the next LY session.
While reiterating his earlier statement that the KMT will not
support "unreasonably" expensive weapons systems, Ma balanced
this by claiming the pan-Blue had already saved Taiwan
taxpayers one half of the original NTD 610.8 billion (USD 19
billion) Defense Special Budget by reducing the cost to less
than NTD 300 billion. On January 18, Ma told the Director,
and subsequently confirmed to the press, that the KMT will
present a comprehensive arms procurement proposal to the LY
in late February or early March.

A KMT Defense Proposal
--------------


4. (C) KMT Vice Chairman P.K. Chiang (Pin-kun) told AIT that
Chairman Ma created a KMT defense procurement task force
under the joint chairmanship of himself and another Vice
Chairman, John Kuan (Kuan Chung) to devise a cohesive KMT
position on arms procurement. Chiang explained that this was
one of three task forces Ma created to find a way out of
legislative gridlock on arms procurement and two other
issues, the high speed rail and the Control Yuan (see
reftel). Chairman Ma, Chiang explained, directed the defense
task force to prepare a consensus proposal on arms
procurement for presentation to the LY at the start of the

TAIPEI 00000229 002.2 OF 002


spring session that opens on February 21.


5. (C) KMT legislator Su Chi, a member of the KMT defense
task force, told AIT that while the task force is moving
toward a consensus on defense policy and a counter proposal
on defense procurement, he does not believe the proposal will
be ready until March. Su said he expects the final document
will consist of a white paper-like statement of KMT defense
procurement preferences, including armaments, infrastructure
hardening, ammunition, and perhaps the P-3C ASW aircraft from
the Defense Special Budget.

Getting Beyond Politics
--------------


6. (C) Both Chiang and Su agreed that the budget cuts and
freezes at the end of the just-concluded LY session were
primarily a matter of "chemistry": government ministers,
they complained, were insufficiently deferential toward the
majority prompting the legislative blockage. When AIT
pressed, questioning whether the substantial budget cuts and
freezes had a policy rationale or objective, both men
responded in the negative, insisting the budget cuts and
freezes were largely a matter of "chemistry." Chiang
explained that the frozen budget funds would be restored when
government agencies applied to the LY with the proper
documents, but not including, chimed in Su, the "zeroed out"
Defense Special Budget funding. Su noted that the KMT is
constrained by its pan-Blue coalition partner, People First
Party (PFP),whose cooperation is essential to maintain the
pan-Blue legislative majority.

Government Not Holding Its Breath
--------------


7. (C) Ministry of National Defense Special Advisor Dr. York
Chen (Wen-cheng) told AIT that the govenment is not putting
much faith in Chairman Ma's statements on defense
procurement. Chen argued that according to MND's
information, Su Chi, whom he termed "Ma Ying-jeou's most
important defense advisor," views P-3C surveillance aircraft
as "offensive" in nature and opposes their purchase. MND,
moreover, Chen explained, is not holding its breath for KMT
movement on arms procurement because the hard line PFP, whose
31 legislators are critical to the pan-Blue coalition
legislative majority, will prevent any compromise on arms
procurement. (Comment: Although a number of PFP legislators
reportedly will defect to the KMT in the next few weeks, the
KMT will still require the support of the remaining PFP
legislators to ensure a pan-Blue coalition majority in the
LY. End Comment.)

Comment: Kicking Lucy's Football
--------------


8. (C) Comment. After 16 months of false leads and broken
pledges, there are signs of a qualitative shift in the KMT
political situation under Ma Ying-jeou's leadership that
could affect the Defense Special Budget "political football."
With his numerous public statements pledging the KMT will
present a "KMT version of the U.S. arms procurement package,"
Ma has put himself on the line much as he identified himself
with a KMT victory on the eve of the December 3 local
elections that the KMT subsequently won. KMT contacts tell
AIT that Ma, who is very sensitive to issues of political
image, wants to establish a strong image of KMT leadership on
security issues in counterpoint to KMT activities promoting
cross-Strait relations in the aftermath of former Chairman
Lien Chan's May 2005 visit to Mainland China. Resolving the
long-running defense procurement deadlock would reflect well
on the KMT and on Ma himself in the run up to city,
legislative and presidential elections over the next two
years. End Comment.
PAAL