In 2005, Taiwan’s political landscape was marked with continued divisions in the island’s domestic polity. Issues at hand included the island’s political future, how to best manage Taiwan’s limited fiscal resources in a dynamic economic environment, and the continued political deadlock surrounding the legitimate requirements for an adequate self-defense capability within the context of Taiwan’s broader national interests.
This report first reviews Taiwan’s domestic political and economic environment in 2005, including the brief détente between the ruling Democratic Progressive Party (DPP) and the People’s First Party (PFP), the cross-Strait initiatives of the opposition parties, and the downturn in the DPP’s public image that in December resulted in the party’s worst electoral performance since it assumed power in 2000. Also examined are the economic challenges Taiwan is facing, including the growing national budget deficit that has been a source of debate for the past five years.
The report also reviews the key defense policy issues of 2005, including the continued impasse over the defense special budget request for diesel electric submarines, PATRIOT PAC-3 missile defense system, and P-3C maritime patrol aircraft. Finally, the report provides an outlook for 2006 and issues a number of recommendations for U.S. policymakers to consider over the coming year.
Executive Summary: Taiwan Defense & Security Report – Annual Review, 2005