In recent years, Taiwan’s military procurement and indigenous defense development have encountered multiple challenges that significantly impact their implementation and effectiveness. These challenges span across various dimensions: such as local community resistance to military construction projects, escalating material and labor costs in an inflationary environment, intense media scrutiny of procurement processes, and the complex dynamics of military modernization objectives. This analysis examines how these interconnected challenges affect Taiwan’s defense capabilities, while also highlighting how democratic institutions both complicate and safeguard the procurement process.
The Intersection of Military Development and Local Interests: Balancing National Defense with Community Needs
Military construction is often a contentious issue for local communities, as it potentially disrupts local life and economic activity. Even when proposed military facilities have a minimal environmental impact, their establishment frequently triggers protests and petitions from residents. In Taiwan, several cases illustrate this dynamic. First, the Navy’s decision to construct a missile base within the existing military bases at Jiupeng (九鵬) in southwestern Taiwan faced delays due to conflicts with the Indigenous Peoples Basic Law. Similarly, the planned Second Naval Harbor Project at Zouying (左營第二港口擴建工程) has encountered ongoing protests despite multiple public hearings, as local fishermen have worried about their livelihoods. In Taitung (台東), a proposed Air Force emergency runway project drew criticism from legislative representatives in local courts because it required the acquisition of productive farmland.
Image: Fishermen protest the Navy’s Second Harbor Plan. (Image source: PTS)
However, these conflicts typically find resolution through increased military compensation packages or alternative solutions. For instance, with the Executive Yuan’s (行政院) support, the Jiupeng base in Pingtung (屏東) revised its “Neighboring Relations Work Guidelines for Military Training Fields Reimbursement Regulation” (國軍訓場睦鄰工作要點) and expanded its compensation coverage. Legislative representatives, who advocate for local interests and hold authority over military budgets, often successfully champion community concerns through this institutional framework.
While this system ensures local voices are heard, it also reflects a contemporary social reality: the Ministry of National Defense (國防部) must now allocate significantly higher budgets to implement military construction projects. This increased financial burden has become an inherent cost of military development in today’s social environment.
The Rising Costs of Delayed Defense Projects
Taiwan’s indigenous military construction faces a challenging paradox: despite increased budgets, the return on investment has diminished compared to previous years. This situation stems from growing technological demands and rising raw material costs.
The impact of inflation is evident in several key areas:
- Civilian basic wages increased roughly 17 percent from 2020 to 2024. However, adjustments in the minimum wage do not reflect the demand and salary increases for senior technical personnel. According to the 2024 Cake Software and Technology Industry Salary Report published by the talent community platform Cake in September, the average annual salary for job openings in Taiwan’s ICT industry has surpassed NTD $1.02 million (about USD $32,000), an increase of 54.6 percent. This forces companies to offer higher salaries in order to compete for talent.
- The growing demand for the development of new technologies in industry, the requirements for environmental protection, and infrastructure construction have driven the demand for metal minerals, with copper prices increasing by 50 percent compared to 2020. Steel prices, while 30 percent lower than during the pandemic period, remain 70 percent higher than 2016 levels. Additionally, Taiwan’s shipbuilding scale is not as large as that of China, Japan, and South Korea. According to Clarksons Shipping Intelligence Network, the global shipbuilding industry is dominated by China, Japan, and South Korea, with the three countries collectively holding over 90 percent of global new orders since 2008. Due to the lack of economies of scale, Taiwan’s shipbuilding costs remain relatively high: for instance, the Tuo Chiang (沱江) class corvette program has seen its construction budget surge from NTD $14.43 billion (USD $465.48 million) to NTD $16.14 billion (USD $520.6 million)—a substantial 13.63 percent increase, requiring an additional NTD $1.71 billion (USD $55.16 million).
The Control Yuan’s 2021 corrective report (監察院糾正報告) revealed a critical issue in Taiwan’s military budget management: escalating personnel costs and operational maintenance expenses are increasingly encroaching on planned military acquisitions. This budgetary squeeze creates a devastating ripple effect, where delayed projects inevitably face higher costs in subsequent years due to inflation and changing market conditions. Significant cases illustrate this financial predicament. For example, the Navy’s initiative to procure seven new harbor tugboats faces potential cost overruns: the originally approved budget was insufficient, causing the entire project to be postponed until 2029.
These examples not only demonstrate immediate financial impacts but also underscore a broader systemic challenge in military procurement planning and budget allocation. The compounding effect of these delays and cost increases threatens to create a vicious cycle of project postponements and escalating expenses.
Military Procurement Under Media Scrutiny
Even with Taiwan’s military personnel diligently performing their duties, financial disputes remain unavoidable. Taiwan’s USD $2.8 billion purchase of 6 Kang Ding (康定) class multi-role stealth frigates from France in 1991 is responsible for the Taiwanese navy’s current high-end surface combatants. These ships are derivative of the Lafayette class—which has been used as the base platform for several nations’ frigate designs—but they also have critical weaknesses due to technologies being not transferred to Taiwan. The Lafayette frigate scandal stands as a stark example: naval officer Yin Ching-feng (尹清楓), responsible for naval procurement, was found dead off Yilan’s (宜蘭) coast on December 9, 1993. This tragedy unveiled a series of procurement scandals, leading to arms dealers Wang Chuan-pu (汪傳浦) fleeing overseas on December 20. Similarly, the naval minesweeper procurement case ended in court due to shipyard contract violations.
These incidents had far-reaching consequences: the Armaments Bureau was disbanded, and involved personnel suffered severe career impacts. While Taiwan’s current military budget maintains high transparency with minimal classified allocations, past procurement scandals have turned military acquisitions into media spectacles, with projects like submarine procurement drawing constant media attention.
Pursuit of Modernized Military Objectives
Military weapon configurations ultimately depend on leadership decisions. For instance, the micro assault boat project, strongly advocated by former Chief of General Staff Admiral Lee Hsi-min (李喜明), was canceled after his departure. The “Maritime Thunder “(震海) project faced various external pressures during its development. As exemplified by the “Mini Aegis” project, which ultimately failed after ongoing internal debates over the project’s configuration, legislative representatives often push for cutting-edge technology without fully considering practical limitations in technical capabilities, logistics, and supply chain sustainability. Still, while the principle of “better late than never” and internal competition for perfection may increase friction, it also demonstrates a commitment to excellence.
Pressure From China
Under pressure from China, Taiwan faces significant obstacles in both indigenous weapons development and foreign military procurement. Unlike Israel, which possesses strong capabilities for independent weapons development, Taiwan lacks the same level of technological autonomy. As a result, Taiwan is heavily reliant on the United States for its military acquisitions. This dependence, combined with the complexities of navigating international arms sales amid geopolitical tensions, complicates Taiwan’s efforts to modernize its defense capabilities and maintain readiness. While Taiwan strives for greater self-sufficiency, external pressures and limitations in domestic defense industries make this a challenging goal.
Conclusion
In today’s environment of global inflation, Taiwan faces unique challenges in military procurement and defense autonomy. Despite obstacles such as local resistance and contractor competition under intense media scrutiny, Taiwan’s relatively transparent procurement process offers some advantages. The increased military budget allocated for community development has benefited local areas. While democracy ensures relative integrity in Taiwan’s system, it also comes with additional challenges—such as requiring the government to allocate extra military funding to achieve desired defense capabilities.
The main point: Taiwan’s military procurement and defense development faces four major challenges: local community resistance to military construction, rising costs due to inflation, intense media scrutiny of procurement processes, and complex military modernization objectives. While democratic institutions increase procurement costs and time, they also ensure transparency in the process.
