Critics in Taiwan Question Scope, Cost of U.S. Aid

Just days after Taiwan’s political leaders celebrated one of the biggest offers of arms sales from the United States, lawmakers and defense specialists on the island are raising two questions: Is it all needed? Is it too expensive?

“As a navy man, I think it’s good, but as a legislator, I think we must consider it carefully and buy only what we really need,” said M.K. Li, the former deputy commander-in-chief of Taiwan’s navy, who is now a member of parliament for the opposition Nationalist Party.

Under a law requiring the United States to provide for Taiwan’s security, the Bush administration last month offered to sell Taiwan older warships, diesel submarines, sub-hunting aircraft and a new version of the Patriot air-defense missiles--but not the advanced radar system Taiwan sought.

Still, the U.S. offer angered China, which regards Taiwan as a renegade province.

Li was particularly skeptical about four Kidd-class destroyers included in the U.S. package, contending they add little to existing capabilities and offer no defense against missile attacks, considered by many specialists as China’s principal threat against Taiwan.

At a news briefing, opposition legislator Lee Ching-hua also questioned the value of the destroyers, 20-year-old ships initially built for the shah of Iran, whose regime was toppled in 1979 before they could be delivered.

“Why should Taiwan spend around $800 million [each] to purchase secondhand vessels from the United States?” he asked reporters.

Some international military specialists argue that Taiwan’s small navy risks being dangerously overstretched if it tries to absorb too many big-ticket items at the same time.

In addition to the destroyers, the Bush administration has offered Taiwan 12 P-3 submarine-hunting aircraft and eight modern diesel-powered submarines.

“There are a lot of questions raised here,” said Damon Bristow, an Asia military specialist at the Royal United Services Institute in London. “I’m unsure they’ve got the resources to do all this without weakening the rest of their defense capabilities.”

Initially, Taiwanese critics of the package have been low-key. Li said that, despite his reservations, he would wait for an evaluation from Taiwan’s Ministry of Defense before making a final decision on whether to support it. Lee declined requests to elaborate.

But analysts suggest that fallout from the island’s economic problems could easily embolden the critics. Sharper criticism would generate pressure on Taiwan’s novice and jittery government to trim its response to the offer from the Bush administration, which is estimated to have a price tag of at least $5 billion and possibly as much as twice that.

Taiwan’s parliament is scheduled to debate the package next month, but not how to pay for it until September.

Rejection of even part of the offer would constitute a major embarrassment for President Chen Shui-bian and complicate relations with the United States, Taiwan’s main protector.

“It’s a big problem for us,” admitted Andrew Yang, who heads the Chinese Council of Advanced Policy Studies, an independent think tank in Taipei. “We’ve got this statement of political support, but at the same time, we’re immediately faced with the choice of whether to accept it.”

The mood in Taipei stems from a dizzying 180-degree flip in the island’s fortunes--one that has seen it go from a booming economy with virtually no international political backing to a rediscovered American ally offered billions of dollars in arms just as the bottom has dropped out from under its bellwether high-tech industries.

“Suddenly, they get a political shot in the arm as jobs are disappearing,” said one foreign economic analyst who spoke on condition of anonymity. “They are used to just the opposite.”

But Taiwan’s finances remain strong. With little foreign debt and more than $100 billion in foreign exchange reserves, it has the money to buy the entire U.S. package.

“Payment is not an issue,” stated Parris Chiang, chairman of the parliament’s foreign affairs committee and a member of Chen’s Democratic Progressive Party. “If necessary, we’ll submit a supplementary budget request.”

But if questions linger about the suitability of the arms on offer, analysts say, Taiwan’s growing economic concerns could force Chen into some hard choices.

The troubles of the high-tech sector in the United States--by far Taiwan’s largest market--along with worries about a migration of high-quality production jobs to lower-wage centers in mainland China and doubts about Chen’s abilities stoke fears that darker times are ahead. Taiwan’s leading economic indicators for March hit a 15-year low.

“Unemployment is an incredible wild card and it’s driving political decision-making,” the foreign economic analyst said. “The government is frightened of public opinion, and jobs are a hot-button issue.”

Thousands of workers marched to the Presidential Palace on May Day shouting, “We want to work!”

Although the official jobless rate is barely 4%, the figure is high enough to be considered politically dangerous. Taiwan has known only good times and high growth for most of the last two decades.

With Chen’s government considered too weak to guarantee legislative backing on the issue, and parliamentary elections only six month away, Yang predicted that many legislators would take careful soundings from their constituents in the next several weeks.

“In this climate, if the public believes the offer will mean needless defense spending, it’s going to be very tough to get through,” he said. He added that if the government came under intense pressure, it might try to defer some items in the package.

“But it would have to be very careful,” Yang said. “This is more than military equipment, it’s a symbol of goodwill from the new American administration, and to turn any of it down would certainly bring a backlash.”