US embassy cable - 04TAIPEI3780

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003780 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 11/29/2014 
TAGS: PGOV, PREL, TW 
SUBJECT: WANG ON FATE OF SPECIAL BUDGET POST LY ELECTION 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: LY President Wang Jin-pyng told the AIT 
Director November 24 that if the DPP controls the LY 
speakership after the December election, Taiwan's USD 18 
billion special budget for the procurement of advanced weapon 
systems will pass but only over vigorous objections by the 
Pan-Blue.  Wang emphasized, however, that if the Pan-Blue 
were to retain control of the LY speakership, he would be 
able to find a formula to bring the KMT around to support a 
budget, although at some reduced funding level.  This, he 
claimed, would avoid exacerbating the political divisions 
that currently exist within Taiwan.  End Summary. 
 
Special Budget Post December 11 
------------------------------- 
 
2. (C)  Legislative Yuan (LY) President Wang Jin-pyng told 
the AIT Director November 24 that if the Democratic 
Progressive Party (DPP) controlled the LY speakership, the 
USD 18 billion special budget for the procurement of advanced 
weapon systems would pass but only over vigorous objections 
by the Pan-Blue and its supporters.  Wang said that recent 
polls show that there are more people who oppose the special 
budget than there are people who support it.  He reiterated 
that if the Pan-Blue were deprived of the LY speaker 
position, the opposition would have no reason to support any 
DPP policy initiative.  Wang added that if the special budget 
were pushed through on a party line vote, it could lead to 
renewed street demonstrations like those after March 20. 
Wang said he worried that, in this case, anti-special budget 
protests might deteriorate into expressions of 
anti-Americanism. 
 
3. (C) Wang emphasized, however, that if the Pan-Blue were to 
retain control of the LY speakership, he would be able to 
find a formula to bring the KMT around to support a budget, 
at some reduced funding level, that would avoid exacerbating 
the political divisions that currently exist within Taiwan. 
Wang said that the optics of the LY being able to secure a 
reduction on the cost of the weapon systems is vital to 
winning support from the Taiwan public.  He remarked that 
people go to the traditional markets and haggle over one or 
two NT dollars, thus they expect the government to fight over 
items that cost billions. 
 
4. (C) Wang asked the Director if the USG still sought LY 
passage of the special budget.  The Director responded that 
if the budget did not pass, it would send a clear signal to 
policymakers in Washington that Taiwan is not serious about 
its own self-defense and lead to questions over why the U.S. 
should be prepared to fight for Taiwan when Taipei has shown 
no commitment to defend itself. 
 
DPP's Anti-Wang Strategy 
------------------------ 
 
5. (C) Wang told AIT Director that Chen Shui-bian and the DPP 
are now intensifying their attacks on Wang because the DPP 
believes that it will face a Wang-Ma ticket for the 2008 
presidential race.  According to Wang, the DPP's strategy is 
to marginalize Wang by taking the LY speakership away from 
him and mothballing him by placing him in the Control Yuan 
(Note: President Chen recently publicly offered the Control 
Yuan position to Wang.  End Note)  Wang said that should the 
DPP succeed in eliminating Wang as a political player, it is 
unlikely that Ma would have a future.  Wang asserted that 
Taiwan would not be able to accept the Hong Kong-born Ma as a 
leader unless Ma was paired up with Wang.  Wang added that 
Taiwan would not even accept Ma as KMT Chairman.  Wang said, 
"If Ma were KMT Chairman, the party would be branded as the 
Mainlander's party." 
 
Comment: Self-Interest or Serious Warning? 
------------------------------------------ 
 
6. (C) The clear subtext of Wang's comments on the special 
budget was that only he could ensure that the special defense 
acquisition budget would pass in a non-confrontational 
manner.  Thus the U.S. should see his reappointment as LY 
Speaker, even if the Pan-Blue loses on December 11, as in its 
best interests.  Nevertheless, Wang's warnings about the 
growing partisan divisions over the issue are legitimate. 
The People First Party's (PFP) decision in September to run 
against the defense budget and the DPP's response of labeling 
the Pan-Blue as sell-outs for their policy reversal have 
given the issue a partisan overlay that did not exist a year 
ago.  Wang was most likely exaggerating the prospects for 
street confrontations over the budget, since opinion on the 
subject, while divided, does not yet appear to be deep or 
emotional. 
PAAL