Thu, Feb 27, 2025 page8

• Unknotting Taipei’s defense budget

  • By Masahiro Matsumura
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  Last month, amid the intensified partisan strife against the minority Democratic Progressive Party (DPP) administration under President William Lai (賴清德), the Chinese Nationalist Party (KMT), the largest opposition party, and its smaller ally, the Taiwan People’s Party (TPP), made a substantial budget cut, including a 7.7 percent cut in defense spending, despite Taiwan’s growing existential security threats from China. This will naturally render the US, its sole security guarantor, and Japan, its major regional ally, less motivated to do more for Taiwan’s security.

  Certainly, political impasse is commonplace across divided governments, but the current state of Taiwanese politics is a deviant outlier in the sense that the nation as a whole is playing with fire when its own national security is in jeopardy. While Taiwan has already met the NATO standard of defense spending — 2 percent of the GDP — former US national security adviser Robert O’Brien, who served during US President Donald Trump’s first term, called for 5 percent, and last year, Trump himself upped the ante to 10 percent as a condition of US support. The rejected record-high defense budget bill reached 2.45 percent, a steady step toward 3 percent, although the figure itself is only symbolic in demonstrating Taipei’s earnest efforts to beef up self-defense.

  The Lai administration is now trying to regain some of the major slashed funds by enacting special budget measures. To muddle through an anticipated legislative confrontation, the administration will surely take advantage of the heavy weight of US expectations and, most probably, informal, but substantial strategic communication with Washington. Unsurprisingly, KMT sources also emphasize the importance of strong defense through close defense cooperation with the US, but without unnecessarily poking Beijing.

  Obviously, Taiwan has a nonpartisan necessity to hammer out the details regarding which defense budget items need to be in or out and which to be beefed up or slashed. The judgement has to be made according to the priority on weaponry acquisitions oriented to asymmetric warfare, that is, on short-term acquisition of numerous small, dispersed, mobile and inexpensive weapons over medium-term big-ticket programs of platforms and long-term defense research and development projects.

  The priority is pertinent given the imperative of preventing Chinese invasion forces from establishing a fait accompli before US forces come to the rescue by overcoming the tyranny of distance. For Taiwan, medium and long-term arms acquisition is simply an untenable luxury, since they are nonsense without surviving in the short-term.

  In this sense, it is necessary to reverse the budget cuts for drone programs, including a drone training facility in Chiayi and, if possible, substantially increase the amount to enhance production capacity and operational/tactical effectiveness. Similarly, a 30 percent cut of defense-related operational expenses needs to be reinstated, including funds for ammunition, fuel and spare parts for military equipment. Also, military recruitment programs have to be strengthened by bringing back the government publicity budgets that underwent a 60 percent cut.

  Yet, as a bargaining chip amid the intensified partisan strife, the Lai administration might have to endure a 30 percent budget cut for Taiwan’s coast guard, because a response to China’s “gray zone” harassments and provocations does not constitute an existential threat. An insufficient response would surely be detrimental to Lai’s approval rating and, ultimately, popular morale against China.

  Notably, a 50 percent budget freeze of Taiwan’s indigenous submarine program (one sub to be commissioned this year and seven more to be built) should be accepted, despite it being Lai’s signature policy in defense acquisition that has garnered support from the public and the defense industrial sector. It is well known that Beijing has vehemently opposed the program, which irritates the KMT.

  The program is a bad move in the context of short-term defense acquisition priority on asymmetric warfare. It is a medium-term program that would most probably fail to meet short-term existential threats posed by China. This mismatch is a growing concern among strong Taiwan supporters in Washington and Tokyo.

  In addition, not only the submarine program itself, but also its related acquisition programs would inevitably incur substantial opportunity costs against the aforementioned short-term acquisition priority. A typical example is five more large submarine tender/rescue ships (Dawu-class) to be built, with the first one already in commission in October last year.

  Furthermore, Taiwan, without diplomatic recognition from major submarine powers, is unable to join the International Submarine Escape and Rescue Liaison Office, an inter-governmental organization, as a member state. Nor has the country been able to participate in the Pacific Reach, a submarine rescue exercise framework under the Western Pacific Naval Symposium. It would be very hard for Taipei to make progress in this regard.

  Last but not least, the peacetime activities and wartime operations of Taiwanese submarines would hamper those of US and Japanese submarines due to Taiwan’s low operational experience and skills, at least for the foreseeable future. This problem would be complicated by inadequate information-sharing among the US, Japan and Taiwan on submarine operations and various classified technological capacity, such as underwater navigation capabilities and acoustic signature. Practically, these obstacles are hardly removable without formal diplomatic relationships and information-sharing.

  Thus, the Lai administration should aim to recover as many slashed defense funds as possible by legislating special budget measures. The focus should be placed on instating short-term acquisition budget items for asymmetric warfare in exchange for the submarine and related programs. This would be a most feasible compromise between the DPP and the KMT, and in alignment with Washington’s and Tokyo’s expectations.

  Masahiro Matsumura is professor of international politics and national security at St Andrew’s University in Osaka.
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