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O 240616Z JAN 06
FM AIT TAIPEI
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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) 
 
¶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