There has been a lot of mudslinging over Taiwan's special arms budget, and the most contentious issue has been the proposed budget outlay for eight yet-to-be manufactured diesel submarines.
Never has a foreign military sales program been so complicated. Some opponents of the budget have said that the approximately NT$400 billion (US$12 billion) required to procure the eight submarines amounts to extortion by the US. These people believe that Washington is running a protection racket on a global scale.
Even some supporters of the arms budget have bought in to this kind of thinking, arguing in effect that the money must be spent to secure US military support in the event of a war between China and Taiwan.
But the submarine deal has become so mired in political infighting that the basic issues have been all but forgotten: Does Taiwan need the subs? Could the budget for submarines be used for better purposes that would provide more utility for the defense forces? And has Taiwan's defense establishment exhausted all other options, including those that could result in a less expensive product?
"Based on the separate assessments
of Taiwanese and US military experts, Taiwan does need submarines to help contribute to maritime defense. In particular, submarines can contribute to anti-blockade defense," said Richard Bush, a Taiwan expert at the Brookings Institution and a former chairman and director of the American Institute in Taiwan.
One senior US defense source agreed, but was pessimistic about the chances of the sub deal being completed.
"Personally, I would like to see the sub deal go through, but officially, the subs have become so controversial that many people [in Taiwan and the US] would like to drop the matter altogether," the source, who is close to the negotiations, told the Taipei Times.
"Observers in Taiwan have misread the views of US policymakers," the source said. "There is no longer much senior-level support for Taiwan in its acquisition of diesel electric submarines. If this program died, there would be few tears shed in Washington."
cost effectiveness
Some US policymakers question the cost effectiveness of diesel-electric submarines, and cite the long time line before
a submarine can gain an initial operational capability. Plus, the funds for submarines could be used for higher priority programs associated with C4ISR, upper tier missile defense and anti-submarine warfare (ASW) surveillance.
In addition, US approval of submarines was based on the assumption that they would be part of a broader approach to countering Chinese submarines, including a viable surveillance and command and control network. Other than the procurement of refurbished P-3C Orion maritime patrol aircraft, little has been done in Taiwan to enhance ASW surveillance capabilities.
The source said that the submarines would be useful to Taiwan in a deterrent capacity.
"Look, they may not be the solution to all of Taiwan's problems, but effectively they give China one more reason not to try anything stupid," the source said. "It takes a lot of time and assets to hunt a sub."
At the heart of the controversy of whether or not to pursue the acquisition of the submarines are three issues. First, the price tag is viewed by most politicians in Taiwan as excessive, if not outright extortion. Second, several lawmakers have said that the state-run China Shipbuilding Corp must -- to some degree -- be involved in the project. Finally, no one has committed to building the subs, and the US, which promised to procure the items, no longer manufactures this kind of vessel.
However, according to the source, none of these problems is insurmountable, and, in fact, some of them are easily bypassed.
For instance, to say that the submarines will cost US$12 billion to acquire
is a gross misrepresentation of the
situation, the source said.
"That figure was projected as the worst-case scenario. The US Navy presented Taiwan with an ICE [independent cost estimate] that outlined a price range: the lower end was a submarine that that would be based on an existing design, and the higher end is based on the assumption that a design would have to
be developed from scratch," he said.
This would entail setting up new production lines, setting up ship-building facilities and the like -- a costly affair.
Until Taiwan commits money to this project, no one is going to be interested, the source said. It just wouldn't be worth the trouble for, say, the German government to approve an export license for a German company to build the submarines, investing a large amount of political capital to keep the deal alive, and then have their efforts come to nought because the cash is tied up in the Legislative Yuan.
"Taiwan has to show [possible contractors] that it is willing to put the money on the table," he said. "Then the price can be negotiated."
In fact, the source said, Taiwan can readily buy suitable subs for as little as half the price, and possibly even less. The answer, the source said, could be found in one of two solutions: getting the US to acquire used subs that could be refurbished, or Taiwan procuring the submarines or a submarine design via direct commercial sales channels.
If Taiwan decided to pursue a more economical route, a number of options would be available. One would be to purchase used diesel subs from countries such as India, Russia or Italy.
"It's important to realize that when we talk about `used' submarines, we're talking about vessels with up to 20 years of service left in them," the source said.
commercial purchase
The other option, a direct commercial purchase, would in effect cut out the US government altogether -- but, importantly, it would leave US companies and technology involved.
"As an official, I shouldn't really say this, but there is no reason that Taiwan has to buy the subs through foreign military sales channels using the US government as an intermediary," he said. "Taiwan could procure the submarines or a submarine design for domestic production on its own.
"The problem is the Taiwan Navy," he continued. "Basically, they want the US `seal of approval' on any sub deal. The Taiwan Navy is still plagued by the `Lafayette syndrome,' in which they want to avoid direct dealings with contractors for fear of being accused of impropriety."
"Other countries trust their people, and deal with contractors on a daily basis," a US military source said. "Direct and open competition that does not involve the US government would inherently result in a more favorable price."
However, even if a "third party" was to sell the subs or a design in a "straight commercial purchase," there is no reason that US defense contractors and technology could not be involved in the process of refurbishing and upgrading the vessels. The most likely scenario for a direct commercial procurement would be for China Shipbuilding to make the subs based on a foreign design.
"With foreign assistance, there is no reason why China Shipbuilding could not build submarines," the military source said. "They are no less capable than their counterparts in Japan or South Korea. The US government's opposition to China Shipbuilding playing a role is based on the assumption that the procurement would be done through US government channels."
Recently, the US-based Washington Times asserted that the US was favorably disposed toward Taiwan procuring submarines from Russia. A Taiwan-based defense expert noted that this was a realistic option.
In the mid-1990s, Taiwan actually made preliminary inquiries for a submarine procurement deal with Russia. The deal was later shelved due to lack of funding, among other reasons, the source said.
prices
Finally, a US defense source sought to soothe the fears of some Taiwanese that the US was trying to foist archaic technology on Taiwan at highly inflated prices.
"To be honest, there are a lot of people opposed to this deal in the US. For example, one US-based defense analyst accused the US Navy of deliberately trying to kill the sub deal by quoting and highlighting an exorbitant price," he said. "In addition, US warfighters have real concerns about Taiwan fielding submarines, fearing blue-on-blue [friendly fire] incidents if they have to go to war in the Taiwan Strait."
And should a cross-strait conflict occur, fratricide would be a very real concern.
"It isn't as though you can walk up and see which flag is painted on the side of a sub," one British observer noted wryly.
Still, the senior US defense source stressed the utility of the items as a deterrent measure.
"Anything Taiwan can do to complicate the People's Liberation Army's strategy is good," he said. "And although Taiwan's military doesn't want to see it this way, Beijing wouldn't be too happy about the possibility of a sub sitting off the coast lobbing missiles into Shanghai."
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