SPEECH BY

MARI ALKATIRI, Head of Government

On the occasion of the

CEREMONY OF THE SWEARING IN OF MEMBERS OF THE TRANSITIONAL GOVERNMENT OF EAST TIMOR

Dili, 20 September 2001

Mr. Sérgio Vieira de Mello, Transitional Administrator, Brother Lu-Olo, Speaker of the Constituent Assembly, My Brother Xanana Gusmão, Distinguished Members of the Constituent Assembly, Most Reverend Bishop Carlos Ximenes Belo, Most Reverend Bishop Basílio do Nascimento, Dear Co-Members of the Transitional Government, Distinguished Members of the Out-going Cabinet Members, Members of the Diplomatic Corps, Representatives of the Media, Dear Fellow countrymen and women, Ladies and Gentlemen,

In the aftermath of this exemplary electoral process, the members of our democratically elected Constituent Assembly were sworn in a few days ago. Our People revealed remarkable maturity and manifested the same sense of responsibility shown during the epic struggle for national liberation, led by Kay Rala Xanana Gusmão in its most difficult moments.

In greeting our Brother Xanana I solemnly pay tribute to the men and women who fought for over 24 years in the ranks of our most glorious FALINTIL: It is with humbleness and profound respect that I greet the last Commander of our FALINTIL force and present Commander of the East Timor Defence Force, Brigadier General Taur Matan Ruak.

In this unique moment of our History, I wish to remember and pay equal tribute to two outstanding men: Nicolau Lobato, a pioneer in the political and armed leadership of our People and, Nino Konis Santana, who represented the new generation which continued that leadership.

Once again, I wish to renew immense gratitude to our People for the magnificent lesson they have taught us and the responsibility they have placed in our hands.

I wish to seize this opportunity to express our gratitude and recognise the role played by the Security Forces - PKF, CivPol, ETDF, the legacy of our heroic FALINTIL, and the East Timor Police - in carrying out the mission entrusted to them to guarantee law and order and ensuring peace and tranquillity throughout the electoral process.

After waging a liberation struggle which involved all our People, and after voting in a referendum which unequivocally expressed the will of the People, we are now engaged in this irreversible process of building our democratic and sovereign State.

We are a small country when viewed in terms of population and territorial dimension. However, the greatness of our People was internationally acknowledged by the unwavering determination during the struggle and the extraordinary example given by some of the most outstanding sons of East Timor. I am referring to the two Nobel Peace Prize laureates, D. Carlos Ximenes Belo and José Ramos-Horta, whom I acknowledge and pay my humble tribute.

Today, as it was throughout our struggle, the issue of National Unity is still of paramount importance for the future success of our country. East Timor needs the competent and committed contribution of each and every one of us during this crucial period of transition to independence.

Allow me to share some ideas with you on two of the most debated concepts during the past few weeks: national unity and government of inclusion. These concepts, in my view, are not contradictory or incompatible.

National unity and, consequently, stability will not be guaranteed by a formal agreement between the leadership of parties or by appointing party leaders to government posts. National unity can only be ensured if it is entrenched in every strata and sector of our society.

We are not neglecting national unity and I wish to take this opportunity to elaborate a little on this issue.

The government is an integral part of a democratic system that we are all building. This system includes other State powers - legislative and judiciary - and entails fundamental principles that will sustain a democratic system no matter who is in power.

I can not envisage democratic power without the periodic renewal of mandates by means of democratic elections, without a free media, without guaranteeing the fundamental rights of citizens, without an independent and efficient judiciary, without a strong, conscious and participatory civil society and without a responsible opposition.

The Constituent Assembly will draft a Constitution that will pave the way to the establishment of a democratic political system. It is my understanding that building a democratic State will ensure social cohesion and reinforce national unity.

We all share the duty to contribute in the building of such a State. Some will render their contribution by participating in the Government; others will contribute with their participation in the debate and drafting of the Constitution; others will contribute by raising relevant issues and thus assist in developing an indispensable responsible and democratic opposition; others, will contribute by re-establishing our economic fabric; others will assist and participate in the development of our human resources, namely in the training of our students; others will be concentrated in defending the Peace we have so painfully achieved ... but please be assured that, whichever the contribution given we must all share this sole objective that will sustain national unity: to serve the People - as the most noble value of our Nation.

In this transitional phase as the Government will undoubtedly face many problems, the success of the process for national cohesion must be based on a coalition of skills and technical competence to work towards clearly established targets and in full loyalty to the decisions taken by the Council of Ministers.

The mission and duty of a government is to govern in order to guarantee the functional and efficient management of the country. The task of Government is not to 'build' national unity. Rather, it is the task of all East Timorese. The duty of the government is to ensure that mechanisms are put in place to enable the implementation of programmes that foster social cohesion, national unity and respect for democratic principles.

We therefore, consider it a priority to bring together skills around clearly defined aims and targets which need to be met under this Transitional Government and urgently initiate the process to define the aims and strategies for the short, medium and long term.

With your permission, I would like to direct a few words to the members of this Government. As a team, the challenges and tasks ahead of us are complex and arduous. We are all conscious of this. You have been appointed as members of this team because you have clearly and transparently met the criteria of technical competence, and dedication in spite of your party affiliation. You were appointed because I believe you will place national interests above your own individual or party interests. Adding to these criteria is the principle that as a team we will remain loyal to the programmes of the Executive Government.

We are determined that this Government be an example in restoring the values and ethics of our society. What is being asked of you is total transparency, unconditional dedication and diligence to Serve the Nation.

We are conscious of the problems facing our country as a result of the occupation. I believe that only a national coalition of efforts can eradicate corruption, collusion and nepotism and uphold the values of social solidarity and justice. In order for this change to occur, we urge the Catholic Church in East Timor, to once again fully engage itself in the process of restoring values that once sustained this society. Without values society will perish. We will set up the institutional mechanisms to ensure consultation with all religious confessions. However, we appeal to the Catholic Church to play a leading role in the fields of education and health. The tradition, the institutional structures and experience of the Catholic Church in East Timor are precious assets in the restoration of the ethics needed to develop our new Nation.

The reconciliation process is decisive and has an immense influence in reinforcing national cohesion. I am referring to the two complementary reconciliation processes: the internal one that includes the return of all East Timorese, to pacify hearts of our population and the second is to normalise the relationship between East Timor and Indonesia.

In the past, national cohesion was built upon opposition to the occupant; today it must be built around the goal of reconciliation and social justice, namely in the establishment of a programme against poverty and unemployment and for the development of our Homeland. Such a programme will only be achieved with the involvement of our population as they are the direct beneficiaries.

This will be one of our greatest challenges in the coming years. Each East Timorese should ask how to best contribute and give to our country. Our People heroically fought to free our oppression. Now we need to find ways to re-channel this energy to free our land from poverty and dependency. We can only achieve this through hard work, discipline and an acute sense of responsibility.

We also understand that a process of this profound nature requires that East Timor affirms itself in the region and develops its relationship with neighbouring countries.

Our recent visit to Jakarta was without a doubt another step given towards the re-establishment of our relationship with the Republic of Indonesia based on mutual recognition and respect.

Likewise, our relationship with Australia is a strategic and priority issue. At this moment, we wish to seize this opportunity to reaffirm our commitment and determination to develop a balanced relationship of mutual respect with Australia. We should now consider transporting the level of understanding and the links that bind our two Peoples to the level of the State. We are certain that the relationship between our two countries will further develop and become even stronger.

Our leadership and diplomats have repeatedly affirmed our intention to integrate into the region. I refer to our desire to join ASEAN and the West Pacific Forum. The political, diplomatic, social and cultural benefits arising from the ASEAN membership are unquestionable. The exchange and interaction between the member States and its citizens will be powerful sources of learning and wealth. Notwithstanding, we must be pragmatic in the assessment of the costs of such a membership and find means to overcome this difficulty.

We consider our membership and inclusion in CPLP - Community of Portuguese Speaking Countries - of strategic importance. This desire is naturally derived from the history and culture shared with its seven member countries - Angola, Brazil, Cape Verde, Guiné-Bissau, Mozambique, Portugal and S. Tomé e Principe -, and the sharing of a common language and the sentiments expressed by the use of this language. There are also other reasons. We will not forget that these countries were the oasis of solidarity in the desert for the Resistance for many long years. To us it is a membership of strategic importance that extends the frontiers of East Timor far beyond its geographic borders.

I wish to underscore the importance of the establishment of a Planning Commission to assist in developing policies and in the preparation of a blueprint. This document will be prepared after adequate consultations with the stakeholders and would subsequently be submitted to the Council of Ministers for their consideration.

The budgetary making process would be further refined so that the future budgets of East Timor would be developed in the context of a macroeconomic framework that places greater emphasis on the priority areas of development in East Timor.

This Plan must be designed to alleviate poverty. In this regard we will be seeking the assistance of multilateral financial institutions, particularly the World Bank - I seize this opportunity to commend Jim Wolfensohn, President of the World Bank, for his recent statement on the need to eradicate poverty and thus reduce the choking world imbalances which all too often become sources of anger and hatred with tragic consequences. We will most certainly include our bilateral partners in the design and funding of this Plan.

Our Government will accord priority attention to improving the social fabric of our society, including the enhancement of the lives of veterans, widows, orphans and the disadvantaged in society.

Our primary investment focus shall be directed to the social sectors like education, human development, health services and to the economic sectors like agriculture, trade and commerce. A strong emphasis will be placed on the promotion of productive sectors of the East Timorese economy.

We will equally foster the creation of an enabling environment to attract micro and small to medium sized enterprises in the area of support for housing and other private sector initiatives.

Furthermore, it is of the utmost importance that special attention be given to the improvement of the infrastructure that will strategically influence and promote national and foreign investment which will ultimately lead to the development of our Nation. Substantive improvements in roads, transport networks, energy and a modern telecommunications network will need to be initiated.

We shall endeavour not to be over-reliant on the resources of the Timor Sea. It is fundamental that the income derived from these resources is utilised responsibly so as to avoid dependencies. The Timor Sea resources should not inhibit the development of other economic sectors, namely agriculture, fisheries and tourism. In our quest to promote economic development more rapidly, free enterprise and private sector led development shall form the essential tools of our macroeconomic strategy. In this regard, our government will, as a matter of urgency, initiate the creation of a conducive environment to encourage private enterprise.

It is the duty of this Government to identify other sources of income for the country. However, this can only be achieved if our economy is diversified and developed. I would like to draw attention to the need to explore other natural resources, namely our fishing potential. Our attention is drawn to this sector due to the political implications it has in the definition of our sovereignty and maritime borders. From the economic perspective the surveillance of our territorial waters is also necessary to meet this objective in the near future and when East Timor's Exclusive Economic Zone is defined.

The territorial integrity and the sovereignty of East Timor are of paramount importance and are central elements of any State. The new Government will initiate full negotiations of our maritime, land and air boundaries with neighbouring states.

I wish to re-affirm our full commitment to establish the naval component using the two patrol boats donated by Portugal to guarantee the surveillance of our borders and resources and equally important, assist in the struggle against drug trafficking.

I shall use this opportunity to convey our gratitude to Portugal for according full respect to our decision in the establishment of a naval component and in availing its human and material resources to this goal. Once again, Portugal and its State institutions demonstrated their full commitment to support the creation of our State.

Another priority of our Government will be to reinforce institution-building and capacity enhancement of our human resources. It is, therefore, imperative to create an environment free of corruption, collusion and nepotism. Punitive action will be taken against such conduct and a strong emphasis will be placed on transparency and accountability at all levels of the Administration.

Respect for human rights, protection of the rule of law to assure the independence of the judiciary and guarantee the democratic rights of all individuals through the entrenchment of transparent and accountable democratic institutions will comprise the governance pillars of our government.

Allow me to use this moment to express our gratitude to the IMF for their assistance in the development of our fiscal and monetary institutions. We will continue counting on the IMF as well as the World Bank and UNDP to jointly engage in the task to end corrupt practices in management and to ensure the Administration is well respected.

Another priority of our Government would be to reinforce institution building and capacity enhancement of our future Central Bank through the enactment of the enabling legislation of a Banking and Payments Authority (BPA). In this spirit, we shall further accelerate the implementation of the establishment of the single currency regime for East Timor by the Authority, with a view to ensuring price stability and a sound monetary system. We will, as a matter of course, build on progress already made by UNTAET and the IMF in the Payments and Banking Supervision activities of the BPA, by strengthening financial institutions and accelerating the implementation of the Micro Credit Bank project under the auspices of the Asian Development Bank. I would like to express our gratitude to the ADB for the work done so far and reaffirm our commitment and willingness to work with you in the implementation of this project.

This Transitional Government is inheriting a difficult financial position and it would require that the new Council of Ministers adopt prudent fiscal measures to deal with this situation. We wish to draw the attention of our People to this situation as much of our success will be limited by this constraint.

We would like to put on record that the CFET budget which finances the operations of ETTA has an overall envelope for the fiscal year 2001/2002 of $65 million agreed at the Donors Conference in Camberra in June 2001.

We are aware of the liquidity constraints of the administration for the current fiscal year. Out of the overall appropriation envelope of $65 million, a sum of $20 million was revealed, in Canberra, as the financing gap that needs to be sourced from the international donor community.

It is also my understanding that only a small portion (about $5 million) of the budgeted financing gap of $20 million has so far been pledged, meaning of course that a gap of around $15 million is still apparent in our budget funding for the current fiscal year.

In addition, the potential precarious nature of our domestic fiscal revenue sourcing, as a consequence of UNTAET downsizing, may indicate that the total budgeted fiscal revenue receipts of $19 million (exclusive of Timor Sea taxes projected at $6 million) may dwindle to a level that may create further gap in the funding of the budget.

The added costs of establishing a fully-fledged government operation of a sovereign state is another factor that the current unfunded budget has to tackle.

We must therefore pursue a policy of prudent fiscal management. We will at the same time urgently solicit full pledges and contributions from donors to enable the unhindered execution of the current budget, while endeavouring to produce a supplementary budget for donor funding to help functionalise the enabling structures of the new government. In this context, I will appeal for donor support in helping to achieve our objectives. I must alert our People to this potential financial constraint as it may in the future hinder the implementation and execution of Government programmes.

In conclusion, we thank the UN Security Council for its Resolutions 1272 and 1338, the UN Secretary General, Kofi Annan, our friend Sérgio Vieira de Mello, the SRSG, and the entire international community for the assistance and support given to the re-birth of our country.

Since we consider the UN mandate as still in force and the process of transition is yet to be completed, we would, on this auspicious day, call on the UN Security Council and the General Assembly to continue its support for East Timor. Today we presented some of the major guidelines and principles we are committed to so that the international community may be assured of the full engagement of the East Timorese in this process. The new government would like to initiate discussions on the size and form of the new mission and urges the General Assembly to consider the establishment of temporary use agreements for UNTAET assets.

We also sincerely extend our special thanks to all those countries and multilateral institutions that have contributed financially, materially or otherwise to the success of our democratic and political transition so far and appeal for their continued support.

Our plight in the reconstruction and development of our nation will continue to necessitate the full support of the international community. In the aftermath of the tragic events of September 11 in New York and Washington we fully appreciate the international community is undergoing difficult times acknowledge that it is facing new challenges. We wish to reiterate our deepest condolences to the North-American People, the families of the victims, the US Administration and State institutions. We wish to indicate our willingness to co-operate with the international community in its efforts against terrorism.

My last words are addressed to my dear fellow countrymen and women. Today, as we take up this responsibility, we wish to express our gratitude for your courage, determination and unwavering capacity to resist throughout the most difficult years of our history.

We have achieved the goal to free our Homeland and today we are a step closer to achieving political, economic and social freedom. We urge you to remain involved and to participate in the rebuilding of our country and ask for your continued commitment and involvement in the development of our Nation.

Before you and in the memory of our heroes fallen for the liberation of our Homeland, we humbly state that all our energy, skills and knowledge will be concentrated in the ultimate goal of this Government: to Serve you, the People of East Timor!

Thank you. ###

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