As Taiwan enters a politically sensitive period preceding highly contested legislative elections in December, Chen Shui-bian’s Democratic Progressive Party (DPP) administration is traveling along a bumpy path to guarantee Taiwan’s defense and national security. President Chen, having overseen a major transition in defense leadership during the first month of his second term, is consolidating control over the country’s national security and defense establishments and trying to implement a far-reaching force modernization and defense reform program. However, a number of obstacles continue to slow progress.

First, a strategic and rational approach to force modernization is complicated by a highly divided domestic polity in which the opposition is using defense issues as a bully pulpit to further its political agenda. Second, Taiwan continues to suffer from limited choices in its force modernization plan, an issue that is only further complicated by an inefficient defense industrial infrastructure. This quarter’s defense and national security analysis examines the domestic political and economic environment in the lead-up to the December 2004 legislative elections, defense budget and procurement developments, and provides an update on key procurement programs.

Executive Summary: Taiwan Defense & Security Report – Q3, 2004

As they begin their second term, Taiwan President Chen Shui-bian and the Democratic Progressive Party (DPP) face a number of challenges in ensuring Taiwan’s defense and national security. Over the next four years, President Chen will seek to consolidate control over the country’s national security and defense establishments, and to implement an ambitious force modernization and defense reform program.

Obstacles in his path include a highly divided domestic polity in which a large segment of the opposition is against significant additional investment into defense, a restrictive international environment that limits Taiwan’s choices for procurement, a weak defense industrial base, and an economy that is becoming increasingly reliant on the mainland for growth.

This quarter’s defense and national security analysis examines the domestic political and economic environments that will help shape the direction of Taiwan’s defense and national security policies. The report will also discuss defense policy issues – including defense and national security leadership transitions and other personnel shifts – as well as defense budget and procurement developments, it will then conclude with a discussion of U.S.-Taiwan defense relations.

Executive Summary: Taiwan Defense & Security Report – Q2, 2004

Taiwan is in a period of political transition, as President Chen Shui-bian’s electoral victory is being contested within Taiwan’s judicial system. A second Democratic Progressive Party (DPP) administration has significant implications for force modernization and budget issues, as well as for defense reform, strategy, and U.S.-Taiwan defense relations.

Under normal circumstances, Chen’s election to a second term would have given the President more confidence to press the DPP’s defense agenda, which was first articulated in the party’s defense white paper issued in November 1999. However, allegations of DPP improprieties by the KMT/People’s First Party (PFP) coalition – collectively known as “Pan-Blue” – the narrow margin of victory, and the failure of the two referenda could hinder progress on a range of fronts, at least for the initial few months into Chen’s second term.

Executive Summary: Taiwan Defense & Security Report – Q1, 2004

The US-Taiwan military relationship saw a major, positive evolution during 2003. Although the year started out at low ebb, apparently hampered by major differences in strategic outlook and planning, it ended with a comprehensive, shared strategic vision to guide Taiwan’s modernization program over the next decade. This annual issue of the Defense & Aerospace Report will address those developments in the US-Taiwan military relationship, where funding is a key component, as well as the successful implementation of the plan for procurement, tied to the annual budget and to the special arms budget, which will be critical to achieving the shared strategic objectives that have emerged in the US-Taiwan relationship

In addition, we will examine the upcoming Taiwan presidential elections in March, a closely contested race that will have wide-ranging consequences not only for Taiwan’s domestic economic and political situation, but that will also impact China’s cross-Strait policies and influence the full scope of US-PRC-Taiwan relations. Incumbent President and Democratic Progressive Party (DPP) candidate Chen Shui-bian, with running mate Vice President Annette Lu, and the allied Kuomintang/People’s First Party (KMT/PFP) candidates Lien Chan and James Soong are already pulling out all the stops as they vie for popular support. Chen is appealing heavily to a populist sense of identity and nationalism with calls for constitutional change and a public referendum. Lien was carving out a platform calling for a more moderate approach to cross-Strait relations, but the Pan-Blue (KMT/PFP) coalition did not make headway attacking the quality of DPP governance, and has in recent weeks launched its own “nationalist” appeal with competing proposals for referenda and constitutional changes.

Finally, we will review some of what is known of the 2004 national defense budget, and provide a status report on the special arms budget and on the progress of Taiwan’s major arms programs. If President Chen wins the election, the special arms budget will likely move through as expected during the summer months, whereas a Pan-Blue victory could potentially delay the process as a result of the change in administration. As for the overall procurement program – addressing all the systems and projects that the Bush Administration approved in April 2001 – it is moving fairly slowly. With a plan finally in place, however, that pace should accelerate over the course of 2004. Barring unforeseen disruptions, the Taiwan military is poised to move forward on addressing its defense modernization objectives.

Executive Summary: Taiwan Defense & Security Report – Annual Review, 2003