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Taiwan proposes USD8.6 billion for defence ‘special' fund

Janes Defence Budgets forecasts that Taiwan's total defence expenditure will grow strongly in real terms in 2022 but will also likely decline by a similar margin in 2027 when allocated and proposed ‘special' funding ends. (Janes Defence Budgets)

Taiwan's Executive Yuan has announced a plan to spend TWD240 billion (USD8.6 billion) over the next five years to bolster naval and air combat capabilities.

The funding is designated as a ‘special' expenditure, and will be in addition to annual defence budget allocations. The new expenditure will also be focused on procuring local equipment and systems instead of imports.

In August, the Executive Yuan announced that the special budget for 2022 will be TWD40.1 billion. This allocation is part of a proposed total defence expenditure of TWD471.7 billion for the year, a nominal 4% increase over the total allocation in 2021.

In a press release on 16 September, the Executive Yuan indicated that the new special budget is required to boost Taiwan's national security in response to rising military threats from China.

“[The funding] will safeguard national sovereignty and national security based on regional environmental changes and the need for combat readiness,” said the Executive Yuan.

It added that the “naval and air combat power enhancement plan” will support the procurement of “various state-built precision missiles and high-performance naval vessels and other weapons systems”.

The press release said the funding will be geared towards procuring military equipment that can be “quickly mass produced”. It said this focus will “help drive investment in the domestic defence industry and supply chain”.

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