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Taiwan's military budget questioned as China ramps up spending

ROC Central News Agency

2011/03/07 18:21:09

Taipei, March 7 (CNA) Lawmakers expressed concerns on Monday over Taiwan's decreasing military budget, saying that it paled in comparison with China's increasing military spending and was insufficient to meet the country's security needs.

The legislators were reacting to China's announcement last week that it would increase its defense budget by 12.7 percent in 2011 to $601.1 billion yuan (US$91.7 billion) , roughly 10 times Taiwan's estimated 2011 military budget of US$9.2 billion.

President Ma Ying-jeou pledged during his presidential election campaign in 2008 that Taiwan would complete the implementation of an all-volunteer military by 2014 and that the military budget would be equal to at least 3 percent of the gross domestic product (GDP).

But ruling Kuomintang (KMT) lawmaker Chang Hsien-yao said at a legislative hearing Monday that the Ministry of National Defense (MND) had failed to meet the 3 percent target, of concern because the ongoing transformation to an all-volunteer force is driving up personnel costs.

"That (the personnel costs) will crowd out spending on logistics and military procurement if there is no increase in our overall military budget, " Chang said.

Questions over the military budget's adequacy were brought into focus in a missile drill in mid-January when less than 70 percent of the missiles launched hit their targets.

Lawmakers at the time blamed the poor performance on a shortage of funding for logistics and maintenance. The problem will persist if things do not change, Chang said, because personnel costs will account for half of the country's military budget by 2014.

In response to Chang's concerns, Defense Minister Kao Hua-chu acknowledged that funding shortfalls had hurt maintenance, citing weapons systems purchased with a special budget (outside the military's regular budget) that did not receive enough subsequent funding for maintenance.

Chang said that if the ministry were not able to increase its budget, it would have to adjust funding in each budget category, most likely requiring a dramatic reduction in personnel costs. Doing that, however, would impede the president's all-volunteer military pledge.

Taiwan's defense budget has fallen over the past three years, from US$10.4 billion in 2008, to US$9.6 billion in 2009, and US$9.3 billion in 2010.

The NT$297.2 billion budget for 2011 (equal to US$9.2 billion when figured at the NT$32.3 per U.S. dollar exchange rate in place when the budget was drawn up last year) represents only 2.2 percent of Taiwan's estimated NT$13.73 trillion GDP.

Even when the MND adds spending that is not directly tied to military functions, such as social welfare and housing subsidies for veterans and their dependents, the "broad" defense budget of NT$374.8 billion is 2.73 percent of estimated GDP, still short of the target.

Though the budget for 2011 has already been approved, Shuai Hua-min, a KMT legislator and the co-convener of the Foreign and National Defense Affairs Committee, said bluntly on Monday that the MND's 2012 budget would be rejected if it were less than 3 percent of GDP.

Even after China's statement last week, the MND said Taiwan would not engage in an arms race with China or markedly increase defense spending, but would instead make the best use of the budget it had to defend the country. (By Chris Wang) Enditem/ls

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