By Jens Kastner and Wang Jyh-Perng
TAIPEI – Taiwanese President Ma Ying-jeou has always insisted on the need for a strong military, and he persistently requests that the United States sell advanced weaponry to the island.
But under his tenure, the military has become weaker. Budgets are strained and resources have been allocated for inappropriate purposes. Recently, the neglect took on new dimensions. Taipei said it’s so desperately short of money that it can’t pay for key weapon systems the US had agreed to deliver. To Washington, this is by no means a bagatelle. It has been paying a high political price for its commitment to supply Taiwan with defensive weaponry.
To deter any attempt by its rival, the mainland, to take over the island by force, Taiwan has for decades relied on officials in Washington lobbying for the authorization of sales of advanced arms. With China developing from a Third World country into a global power, their task has gradually become more daunting. After the most recent package was announced in January, a furious Beijing not only suspended military exchanges and security talks but also threatened the US with economic sanctions and even with scenarios like the large-scale dumping of US government bonds.
Two Patriot 3 (PAC-3) missile launching systems and 60 UH-60M Black Hawk helicopters Taiwan now says it can’t pay for as promised were part of the January sales package that made Beijing-Washington relations their iciest in years. Another four batteries of PAC-3 were authorized in 2008. According to Taiwan’s Ministry of National Defense, the procurements of all items will be delayed for as long as three years. Although it remains unclear to what extent Taipei’s less-than-ideal payment ethic will affect actual delivery, the damage has been done, and Taipei-friendly lobbyists in Washington will have an even harder time than before pursuing their trade.
“Beijing was quick to punish Washington after the January release of arms, but now the Taiwanese behave in a way that makes them look like they don’t want them after all,” said Wendell Minnick, Asia bureau chief with Defense News in an interview with Asia Times Online. “It’s a psychological blow for those in Washington who have been pushing for the release of arms sales”.
The news of Taiwan not being able to settle the account with the US doesn’t come at a time of crisis but when the island is doing splendidly. In recent reports on the economy, no other term occurs more often than “record high”. Good corporate payment behavior and a very low probability of sovereign debt default made international credit-management groups raise Taiwan’s credit risk ratings. Cited as one reason, next to Taiwan’s strong economic rebound, are very high foreign-exchange reserves. At the end of September, the island’s foreign exchange reserves rose for the 23rd consecutive month to reach a US$380.51 billion, making Taiwan the fourth-largest holder of foreign exchange reserves after China, Japan and Russia.
Yet, although this seems plenty more than enough to get off on the right foot with Washington in terms of payments for the PAC-3 and Black Hawks, there’s Taiwan’s problem with national debt and tax revenue hiding behind the rosy data. While the private sector and investors are jubilant over record earnings, Taiwan’s fiscal condition has been deteriorating due to increasing public debt and declining tax revenue after the government adopted measures to mitigate the effects of the global financial crisis. To stimulate the economy, Taiwan cut its inheritance tax in January last year to a flat 10% from a range of 2% to 50%, and recently lowered corporate income tax to 17% from 25%. Its accumulated outstanding debts totaled about $134 billion at the end of 2009, and are expected climb to $162 billion this year.
Seen in the context of warming cross-strait ties, it’s not surprising that under Ma’s administration the military has been assigned a backseat when it comes to the distribution of the national budget. The government, nonetheless, has been going to great lengths trying to keep this fact from becoming too obvious. Since most Taiwanese are in favor of strengthening defenses, and prefer their leader to be a man who can stand up to Beijing, President Ma in numerous interviews has called onto Washington to supply Taiwan with advanced weapon systems.
Yet, somewhat more meaningful than the content of Ma’s comments is the dry data. The defense budget has not reached the 3% of gross domestic product that Ma promised prior to his election. And the claims made in Ma’s interviews don’t withstand scrutiny. Recently, he took credit for having bolstered US-Taiwan relations, wrongly citing this year’s authorized sales of US-made weapons as having been the largest in the last 10 years. However, it wasn’t 2010, with its $6.39 billion, but 2008, when Taiwan invested $6.46 billion in US-made weaponry, that takes the spending crown. Apart from having got the sums mixed up, Ma also chose not to mention that the items approved in January weren’t actually requested during his term, but in that of his predecessor Chen Shui-bian.
Apart from US weapons sales, there are other undertakings that have fallen victim to budget allocation issues, one being the replacement of compulsory military service with a voluntary system. Originally, the plan was to trim back the quota of conscripts to zero within the next four to six years, but due to the budget shortage it’s been decided to retain parallel recruitment for longer. A full-scale mercenary system would be much more punchy than an unmotivated force of draftees who undergo a year’s worth of basic military training, even if the total number of Taiwan’s soldiers would be cut from 240,000 today to around 210,000 in the future.
In the two years Ma has been holding office, a conflict over the internal distribution of the defense budget has also been emerging. The aimed for ratio of 40% for personnel, 30% for the maintenance of operational readiness and 30% for hardware investment can no longer be achieved. But instead of reacting to the repeated calls for structural reform of the military, the Ma administration has resorted to calling for Beijing’s goodwill in the withdrawal of mainland missiles targeting Taiwan.
Just as the calls for a missile withdrawal amount to a publicly stunt at the military’s expense, the Taiwanese armed forces have, at ever shorter intervals, been asked to engage in humanitarian relief missions.
Ever since President Ma almost lost his job due to the botched response to the calamity Typhoon Morakot caused in 2009, Taiwan’s politicians have understood that it goes down well with the public to demand military resources be mobilized for the rescue of fellow countrymen from floods and fires, or to pull them out of mud and rubble. A report by Taiwan’s military cautioned that although natural disasters and accidents are in its focus, and relief work is part of its duty, an enhancement of the forces’ capabilities are key to preparedness. The conclusion was that neither Taiwan’s military’s equipment nor its training were appropriate for humanitarian relief missions.
Nonetheless, the Ma administration was quick to call in the military after Typhoon Fanabi hit in late September, as well as when a group of Chinese tourists went missing in the landslides caused by Typhoon Megi a month later. This looked good on the TV screens, but was hardly useful, since it unnecessarily consumed the military’s already scant resources. Special helicopters like the US-made HH-60 series, which are meant for search-and-rescue missions, aren’t to be found in the Taiwanese arsenal. And the navy’s radar boats and Knox-class frigates involved in the recent search-and-rescue mission aren’t suitable for locating individuals buried by rocks and boulders in waters 10 meters off the coast.
The question Taiwan faces is whether it wants its armed forces to continue to deter an invasion or become a disaster relief organization. If the latter is the aim, the Ma administration has to invest in a few dozen helicopters equipped with hoists capable of lifting a 270-kilogram load from a hover height of 60 meters, and a personnel-locating system, as well as appropriate training.
If defense of Taiwan is the aim, the air force needs new F-16C/Ds to replace its aging fleet of F-16A/Bs, Indigenous Defense Fighters and Mirage 2000s. Yet, due to the Ma administration’s recent display of indifference in regards to US support by announcing a delay of payment for the PAC-3 and the Black Hawks, an authorization for F-16C/Ds has become wishful thinking.
As Wendell Minnick concludes bleakly: “No country pays for everything in one or two years. But delaying the payment sends the wrong message to Washington and further encourages opponents to shoot down future requests from Taipei, especially for F-16s.”
Jens Kastner is a Taipei-based writer. Wang Jyh-Perng is a reserve captain in the Taiwanese navy and an associate research fellow at the Association for Managing Defense and Strategies.