Sun, Jul 04, 2004 - Page 8 News List

Editorial: Making deals for arms purchases

On Friday, the Ministry of National Defense (MND) briefed an invited group of media representatives on its arms purchase proposals. This was obviously a MND attempt to seek popular support for the purchases against the backdrop of a continued deadlock between the Legislative Yuan and the Executive Yuan over the special arms purchase budget.

The MND is obviously in a hurry to have the deal sealed. As conceded by the Defense Minister Lee Jye (李傑) during Friday's briefing, if the deal is not closed by the year's end, then in view of the upcoming US presidential election it will face an increased level of uncertainty. What he meant was that if US President George W. Bush -- who has been friendly to Taiwan -- is not re-elected, then the chances of the US government backtracking on the offer increase.

Threats posed by China are another reason for the big hurry. Not only have China's annual military budgets grown by multiples, but the real figures are believed to be much higher -- estimates have put them at two to three times higher -- than the officially announced budgets.

While the concerns that the Legislative Yuan, or really the pan-blue opposition, have about the arms purchases are not entirely groundless, they pale in comparison with the nation's security needs.

One concern cited has been the likelihood of corruption and kickback commissions. Of course this skepticism comes from the nation's experience in connection with the purchase of Lafayette submarines from France in the 1990s.

However, this does not mean that Taiwan should stop purchasing arms altogether just to avoid a repeat of that kind of corruption. Instead, open and transparent information on pricing and negotiations can help reduce the likelihood of corruption.

As for the pan-blue lawmakers' request that the submarines proposed for purchase be manufactured here, the MND suggests there are feasibility issues. According to Li, lacking design, quality control and testing capabilities, after the state-owned China Shipbuilding (中船) completes construction of the submarines, it will face the same situation as Aerospace Industrial Development Corp (漢翔) did. After this company finished building fighter jets for the government, its manufacturing lines were shut down because no further orders were forthcoming. Moreover, many foreign governments have been unwilling to issue export permits required for some highly sensitive and sophisticated parts and components. Unless this problem is solved, China Shipbuilding's ability to build the submarines in question remains problematic.

Finally, there is the difficult issue of price. The pan-blue camp had asked that the total price of the arms purchase -- NT$610 billion -- be reduced by NT$200 billion in the event that China Shipbuilding cannot assemble the submarines. On the other hand, the pan-green camp is saying that the deal would be acceptable so long as the price is cut by NT$100 billion.

While efforts to cut prices should be appreciated, two things must be kept in mind -- they must be done for the right reasons (not merely to vex the government) and they must conform to the realistic situation of the market.

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