US embassy cable - 05TAIPEI3283

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, Domestic Politics, Military Issues 
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