Australian Financial review June 25, 2001

FEATURE

Nation builder to leave foundations for success

Geoffrey Barker

Sergio Vieira de Mello says emphatically, perhaps too emphatically, that he is convinced East Timor's coming constituent assembly elections will be free of violence despite the country's long history of political violence.

But the UN supremo is not prepared to rely on verbal commitments made to him by political party leaders in East Timor. He has ordered his top administrators to help the 16 parties draft an agreed pact of national unity ahead of the August 30 vote for the 88 constituent assembly seats.

"It will be the most reassuring message that they can send to the Timorese population. They commit themselves formally to certain basic rules of behaviour and certain fundamental principles ... The people will be reassured by the way in which this campaign will be organised and led," de Mello says.

So he hopes. But de Mello also acknowledges that the East Timorese have good reason for their anxiety about the looming election. "Their history is a history of violence whenever major political challenges were faced," he says.

The Brazilian UN official who is Special Representative of the Secretary-General, Kofi Annan, and Transitional Administrator, has his reputation riding on the coming elections and the subsequent constitution-writing period leading to independence for East Timor late this year or early next year.

Since late 1999 he has been in effect dictator of East Timor, albeit a conscientiously consultative dictator, with full executive and legislative authority over the emerging nation. He wants, needs, a smooth and peaceful final exit from the shattered country he entered with his army of peacekeepers and bureaucrats.

"It is the responsibility of the political forces of the country, not UNTAET [United Nations Transitional Administration in East Timor], to demonstrate to the people of East Timor, and I am convinced they will, that this time will be different. All the political parties that I have been dealing with ... have committed themselves time and again, to respecting fundamental principles and values of multiparty democracy, and the first one is to renounce violence once and for all in the pursuit of political objectives," de Mello told The Australian Financial Review.

He has faced criticism for leaving the elections too late and calling them too soon, for requiring the constitution to be drafted in only 90 days and for some administrative moves.

His response is that his mission has proceeded by trial and error on a major new UN task, and that he has consulted with the East Timorese political leaders rather than exercise the heavy powers granted to him under UN security council resolution 1272.

"We were not prepared to play this role ... I couldn't have done better," de Mello says.

He says he wants to be judged by four criteria:

The security situation. "A stable and secure environment is probably the best legacy we can leave behind for the Timorese people, not least since they have suffered enough."

A credible sustainable public administration that is "free from the vices of the past.''

"Truly democratic institutions. Not easy to build after 500 years of non-autonomous non self-governing status."

"A sustainable fiscal basis for the medium and longer term, including sufficient income, domestic and offshore, to avoid East Timor becoming dependent on foreign budget support."

So how confident is de Mello that the UN will leave behind a going concern?

"You don't build a new administration in two and a half years," he says. "I would be confident that what we leave behind is in some sectors - education, for example - close to full development.

"In other sectors - the finance ministry, the central bank - we will just have started. Those are areas which will require specialist, specialised support for quite some time to come, and we have a commitment from the IMF to help with skilled senior personnel.

"In between there are a variety of situations. It's uneven basically."

On the crucial issue of East Timor's medium- to long-term fiscal future, de Mello says the UN administration has been basing its assumptions on conservative projected income. "We are not planning the future of East Timor on wildly optimistic forecasts."

He says the Timorese leadership "very soon", with support from the UN, World Bank, Asian Development Bank and the United Nations Development Program will "start reflecting through a working group or taskforce on medium- to long-term economic and social development issues".

"First and foremost they will be attempting to learn from mistakes other developing countries have made in the use of oil-related resources. We are fortunate to have here a very responsible leadership. They want us to proceed with prudence and care."

Perhaps because he is Brazilian, de Mello seems fascinated with the potential of East Timor's coffee. He speaks of increasing East Timor's non-oil and gas revenues by doubling or even trebling its coffee production.

"I am aware coffee prices are low, but the coffee Timor exports is organic, high-quality coffee. It has a niche market in the US, Japan and Portugal, and it might be able to widen that. We are advised it is possible to double or triple coffee production," de Mello says.

He says he wishes he had resources to subsidise East Timorese production, but describes having to cut back East Timor's second budget to $65 million as cruel.

"I have had many sad experiences in my professional life but that was probably the worst. I don't have an answer to low coffee prices except to say that we will try to make sure prices paid to East Timorese growers are the best and fairest possible."

He says two sectors for which he refused further cuts were health and education. "We must attempt to invest as much of the budget of East Timor as possible in those areas over the coming years."

He says East Timor recruited 1,000 teachers in each of its first and second budgets, although the number of teachers was limited by the decision of the October 1999 World Bank Joint Assessment Mission that the number of public servants in East Timor be reduced from nearly 36,000 under the Indonesian regime to 12,000.

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