20130613 US commission warns over Taiwan’s defense budget

US commission warns over Taiwan’s defense budget

By William Lowther / Staff reporter in WASHINGTON

Taiwan’s declining defense budget could encourage Beijing to use military force to achieve its political objectives, a new research paper from the US-China Economic and Security Review Commission said.

The nation’s “diminishing ability” to maintain a credible deterrent capability could provide “incentives and create opportunities” for China, it said.

Beijing might “take a greater risk in its approach to cross-strait relations, including pressuring Taipei to move towards political talks or using military force to achieve political objectives,” the report said.

The report, Taiwan’s Declining Defense Spending, was published on Tuesday by the US congressionally appointed commission, which is assigned to investigate the national security implications of US trade with China.

Prepared by senior policy analyst Craig Murray and researcher Kyle Churchman, the report said that as Taiwan “struggles” with its declining military preparedness, Taipei may seek to develop closer political ties with Washington.

It said that Taiwan’s primary security objectives are to defend against China’s efforts to force “reunification” and preserve cross-strait peace and stability.

“While Taiwan’s military over the last decade has made some improvements, it has focused largely on sustaining existing capabilities,” the report added.

China’s rapid military modernization during this time has “negated” many of the military advantages Taiwan previously held over China, the report said.

However, despite its growing military disadvantage relative to China, Taiwan’s defense budget continues to decline, the report said, falling from US$10.6 billion last year to US$10.5 billion this year.

According to the Congressional Research Service, Taiwan’s current defense spending represents 2.1 percent of GDP.

“This is considerably less than three percent of GDP — the level at which President Ma Ying-jeou (馬英九) pledged to maintain defense spending — and marks a substantial decrease from 3.8 percent of GDP in 1994,” the report said.

It added that official statements and documents suggest that Taiwan’s government judges the current level of defense spending to be sufficient and it is likely to remain stagnant through at least the end of Ma’s term in 2016 as he focuses on continuing to improve cross-strait relations and strengthening “soft power” approaches to deterrence.

The report said that Ma appears to have little incentive to increase the defense budget since improved cross-strait relations have reduced public perception of the China threat in Taiwan.

“Domestic and social welfare issues have become more salient as Taiwan’s economy attempts to recover from the global financial crisis and its workforce ages,” it said.

If spending continues to fall, Taiwan’s military may find it hard to maintain current operational capabilities, readiness levels and equipment inventories, it added.

“Taiwan also could find it increasingly difficult to make progress toward key modernization goals, such as preparing for a wider range of missions at greater distances from Taiwan and integrating innovative and asymmetric capabilities into its military,” the report said.