Enhancing U.S.-Taiwan Relations Part 4: Taiwan's Defensive Responsibilities

"The time of reckoning is upon us...The U.S. ability to contribute to Taiwan's defense in a crisis is going to be measured against Taiwan's ability to resist, defend, and survive based on its capabilities...As the lone superpower, our interests are plentiful and our attention short.  We cannot help defend you if you cannot defend yourself."
                                                                                           
--Deputy Under Secretary of Defense Richard Lawless (2005) 

      Although the Taiwan Relations Act was embedded into American law in 1979, Congress has always expected Taipei to maintain committed to its own defense.  In recent years, however, there has been a growing skepticism among some observors that lawmakers in Taiwan have not fully lived up to their responsibilities of maintaining Taiwan's military capabilities.  Although Taiwan still has one of the most modern and capable militaries in the East Asian region, it has seen its once formidable qualitative advantage over the Republic of China's People's Liberation Army (hereafter PLA) diminished to the point to where many analysts have concluded that such an advantage for Taiwan has been lost forever. 

     The reasons for such beliefs are many.  Lower annual military budgets, political gridlock,  espionage activities by the PRC, and a host of other factors have all combined to formulate a toxic mix that has raised red flags of concern to many long time supporters of Taiwan in Washington.  This article will explore some of these issues, as well as offer suggestions that could be used to reinvigorate Taiwan's armed forces.

You Get What You Pay for

"There are officials in the US who are questioning Taiwan's own defense commitment.  And an important indicator of that is the defense budget--a method to clearly show the US Taiwan's determination"
--Joseph Wu, Taiwan's former representative to the United States

To many in Washington, the downward trend of Taiwan's annual GDP spent on defense has been among the most worrisome aspects of the country's military state of affairs. While China has quadrapuled its defense budget since 2000 (13.4% for 2012, only including official statistics from the PRC, most experts believe that the actual number is significantly higher), Taiwan's defense spending has grown only 1.8% per-cent over the past decade.  Other countries in the region that are wary of an increasingly robust Chinese military have boosted their military spending to counter:

South Korea (4.8%)
India           (3.6%)
Japan          (3.5%)

While escalated tensions between Japan and China over the Senkaku islands  have been a recent development, Taiwan is undoubtedly the country in the region that has to face the highest probability  of armed conflict with China in the future, even though cross-Strait relations have improved during the Ma Administration.

Defense Budget of Taiwan prior to Ma Administration

Upon taking office in 2008, President Ma stated a goal to set the defense budget at a minimum of 3.0% of GDP.  Despite this promise, defense budgets in relation to GDP were cut in 2009, 2010, and 2011.  In 2012 (a Presidential election year in Taiwan), the budget was "increased" to 2.2% of GDP.

Taiwan's Defense Budget Under President Ma (GDP %) 

2008: 2.5% 
2009: 2.7%
2010: 2.2.%
2011: 2.1%
2012: 2.2%
2013: 2.2% (Est.) 

Taiwan's defense budget and military platform purchases have also become victim to political infighting within Taiwan's Legislative Yuan.  In an updated 2012 report on Major Arms Sales to Taiwan since 1990, the Congressional research service reported a number of instances where the defense budget, purchases, and special budget requests for arms sales fell victim to domestic politics inside Taiwan: Examples that took place during the DPP Presidential Administration Chen Shui-bian (2000-2008)

2005: Members of the Pan-blue aligned People's First Party (PFP) in the LY stated that major platform items to be purchased should come out of annual defense budgets, not special budgets. 
(*note-Taiwan's LY has the ability to pass "special budgets" in order to fund weapon platforms that would in most cases take an entire annual defense budget (if not exceed it) to acquire.  Examples include F-16 fighter jets, and submarine platforms) 

Since any major platform purchase would exceed an annual budget, such a proposal was likely proposed to block any such sale. 

KMT member Lien Chan criticized the special budget process, although it was used during KMT Presidential administrations in the 1990s.  

2006-07: The KMT-PFP camp blocked a special budget request 41 times in the procedures committee, in which the bill was to "permit the supplemental budget to pass through the procedural committee and be taken to the floor of legislature"

KMT LY member Lin Yu-fang questioned the legality of supplemental budget request

Such uncertainty over Taipei's political will  to actually purchase expensive arms platforms has been cited as one of the reasons that Taiwan's F-16 request, among others, has not been finalized, as both the Bush and Obama administrations saw a risk in raising tensions with China over such an approval that could have proved to be unnecessary in the case of Taiwan not providing the funds for such a purchase.  During the Chen administration, many within the blue camp stated that one of the reasons it did not approval special budgets for arms purchases was that it could potentially "embolden" the administration to make potentially provocative moves towards Taiwanese independence, thus raising the potential for a military conflict with China.  Yet during the four years of the Ma Administration, there has been no GDP-increase in defense spending.

While the Ma Administration has stated that its current economic state does not currently allow it the luxury to increase its defense spending, a report in 2012 by Jens Kastner and Wang Jyh-Perng show a different story:

" 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."


The government in Taiwan should not make the mistake of continuing to "politicize" its national defense.  While maintaining defense spending levels below NATO countries that do not face immediate threats, Taipei is showing a lack of seriousness of its ability to maintain a viable defensive deterrent against a rapidly modernizing PLA that has been built around the concept of retaking Taiwan by force if necessary.  Although it cannot expect to match China "dollar for dollar" in military spending, Taiwan could show the region, and the world, that it values its democracy, and is willing to pay the price to maintain it.  A repeated number  that this author has heard from officials in Washington is "three percent" (the minimum amount many feel that  Taiwan's GDP that should be allocated to defense spending).  Such an increase could show long time supporters of Taiwan in Washington that it is a cause still worth fighting for on Capitol Hill.