Subject: East Timor headlines/17May2001

Bahasa Indonesia Headlines ­ Thursday 17 May 2001

1. Rupiahs must be changed for American dollars 
2. CPO to socialize dollarization in the districts 
3. Banks must be established to exchange rupiahs

1. Rupiahs Must Be Changed For American Dollars (Timor Post, front page headline)

The withdrawal of Indonesian rupiahs from Timor Lorosae was a good step because it would prevent confusion in currency usage in the country. But UNTAET and the government of Indonesia must immediately convert rupiahs circulating in the country to US dollars.

This was stated yesterday by Avelino Coelho, the National Council member from the Timor Socialiast Party (PST).

According to Avelino, the Transitional Administration must explain to the people the withdrawal of rupiahs from circulation. He also added that banks in the country must be able to convert the rupiahs into US dollars.

“If banks in Dili do the conversion, people will be making their way there to sell their rupiahs,” he said.

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2. CPO To Socilaize Dollarization In The Districts (Suara Timor Lorosae, Front Page third lead)

The Central Payments Office is getting ready to embark on a dollarization campaign in the districts. CPO officers have received training and other resources to help them in the field.

This was stated by the General Manager of CPO Fernando Deperalto at a press conference yesterday.

Fernando said the dollarization program would help stabilize the economy.

“If foreign currency is allowed to circulate in the country, it would further complicate matters,” he said.

CPO General Manager said he hoped the current bilateral negotiations between Indonesia and Timor Lorosae would help reach agreement on the use of the dollar as the official currency.

“Indonesia must agree to withdraw the rupiah from circulation [in Timor Lorosae] and UNTAET will immediately convert whatever rupiahs remaining in the country to US dollars,” said Fernando.

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3. Banks Must Be Established To Exchange Rupiahs (Suara Timor Lorosae, Page 4 lead)

The Indonesian rupiah had been used by all levels of society in Timor Lorosae for the past 24 years. If the currency is to be withdrawn, UNTAET must ensure that there is a proper banking system in the country to handle the conversion from rupiahs to US dollars, said National University of Timor Lorosae lecturer Salustiano St. Carvalho.

Salustiano said currently there are three currencies in circulation in the country ­ US dollars used by UNTAET; Australian dollars used in supermarkets; and Indonesian rupiahs used by ordinary Timorese.

“The number of people working in UNTAET and NGOs is only about 15 per cent of the total population. Therefore only 15 per cent of these people have US dollars to spend,” he said.

In order to withdraw smoothly rupiahs from circulation, Salustiano said, UNTAET had to pass a regulation stating a deadline when rupiahs could no longer be used in the country.

“The Transitional Administration has made the US dollar the official currency of Timor Lorosae. Unfortunately many people, especially those in the districts and villages, do not know about the dollar. Even in Mercado Market, many traders do not know about American coins,” he said.

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