PO Box 15774 Washington, DC 20003-0774

22 April 2002

Secretary Colin L. Powell 
U.S. Department of State 
2201 'C' Street, N.W. 
Washington, D.C. 20520

Dear Secretary Powell:

We urgently appeal to you to support the most generous grant possible without restrictive macroeconomic conditions at the May 14 and 15 pledging conference in East Timor. We strongly encourage you to work with other donor governments and international financial institutions (IFIs) to make sure that East Timor's expected financing gap is covered in its entirety.

East Timor's call to fund its financing gap comes on the heels of President Bush's recently stated commitment to eradicating poverty worldwide and efforts by Treasury Secretary Paul O'Neill and others to make sure that grants form a large portion of international assistance to poor countries. Pledging to fund 25% of the gap would be consistent with recent positions taken by the Administration and would signal the sincerity of U.S. intentions to the world.

As you likely know, the East Timorese government is expecting a $154 to $184 million shortfall in its already lean recurrent and development budgets over the first three years of independence. While less than the Administration spends on one F-22 fighter plane, for a small country like East Timor this sum could stand in the way of a promising beginning as the world's newest nation. Due to reductions in peacekeeping and other UN operations in East Timor, the U.S. will be saving substantial sums, a portion of which could be pledged in May.

We strongly believe that the U.S. government has a moral obligation to ensure that East Timor's financing gap is fully funded. For some 50 years, the U.S. was the largest supporter of the Indonesian military, despite its egregious human rights record. That the President and Secretary of State of the United States in 1975 gave a green light to Indonesian dictator Suharto to invade East Timor is widely documented. And throughout the occupation, the U.S. supplied Indonesian security forces with well over one billion dollars of military assistance and equipment. Generous grants to East Timor without strings attached cannot bring back the hundreds of thousands of East Timorese killed, but they would help ensure a peaceful and prosperous future for East Timor.

It is wholly practical to sustain the positive investment made to date in East Timor by the U.S. and other countries. This is the world's first chance to take preemptive action to thwart the vicious cycle of poverty and debt that has a stranglehold on far too many developing countries. Simply put, it is far cheaper to prevent a problem than to fix it. East Timorese civil society and government leaders have made poverty eradication a top priority; they have repeatedly stated that the nation should not mortgage its future by incurring debt. East Timor has highly credible financial institutions with sound international practices. Substantial profits from offshore oil and natural gas will start flowing in five to ten years. It makes little sense from either an economic or a humanitarian perspective to force a nation only beginning to recover from such pervasive and recent destruction to use its revenues to service debt to wealthy institutions and countries rather than spend on education, healthcare, and other vital services. Moreover, a stable East Timor is important for a stable Indonesia.

Any contributions, whether from the U.S. or other donors, should not be tied to crippling strings of structural adjustment, whether in name or in practice. While the term is not used in reference to East Timor, there are strong indications that similar onerous macroeconomic conditions will be applied. The U.S. and other countries must implement lessons learned repeatedly from the painful experiences of so many poor nations that tying assistance to such conditions has only led to further impoverishment including decreased access to healthcare and education; devastated small- and medium-sized farms, businesses, and other local industries; lowered wages and increased unemployment; undermined food security; and environmental degradation. All of these effects burden women disproportionately. With enough foresight, East Timor can avoid the same fate.

The people of East Timor have paid a terrible price for their freedom and will soon proudly celebrate their independence. That independence must also apply to economic and financial arenas. The United States can make sure that East Timor's people did not suffer the unbearable only to end up in an endless cycle of poverty. Our government must contribute its fair share to East Timor's financing gap and coordinate with other governments and IFIs to guarantee that the full amount is covered with grants free of restrictive macroeconomic conditions.

Sincerely,

Christine Ahn, New Voices Fellow Food First

Bama Athreya, Deputy Director International Labor Rights Fund

Mubarak Awad, Chair of the Board Nonviolence International

Jeff Ballinger, Director Press for Change

Medea Benjamin, Co-Founder Global Exchange

Kurt Biddle, Washington Coordinator Indonesia Human Rights Network

Michele Bohana, Director Institute for Asian Democracy

Diana Bohn, Co-Coordinator, Nicaragua Center for Community Action

Rev. William Callahan, Co-Director Quixote Center/ Quest for Peace

Rev. John Chamberlin, National Coordinator East Timor Religious Outreach

Marie Clark, National Coordinator Jubilee USA

Peter J. Davies, UN Representative Saferworld

Erik Gustafson, Executive Director Education for Peace in Iraq Center

Katherine Hoyt, National Co-Coordinator Nicaragua Network

Aviva Imhof, Southeast Asia Program Director International Rivers Network

John Judge, Member of the Board Washington Peace Center

Mary Anne Mercer, Co-chair The Northwest International Health Action Coalition (NIHAC)

Njoki Njoroge Njehu, Director 50 Years Is Enough Network

John Oei, Founder Indonesian, Chinese, and American Network

Ann Oestreich, IHM, Congregation Justice Coordinator Sisters of the Holy Cross

Karen Orenstein, Washington Coordinator East Timor Action Network

Robert Pedersen, Trade and Labor Coordinator Indiana Alliance for Democracy

Colin Rajah, Executive Director JustAct - Youth Action for Global Justice

Jen Randolph Reise, Co-Director Women Against Military Madness

Stephanie S. Spencer, Program Associate for Southern Asia Common Global Ministries of the Christian Church (Disciples of Christ) and the United Church of Christ

Ivan Suvanjieff, President PeaceJam Foundation

Ben Terrall, Director East Timor Relief and Research Project

Mark Toney, Executive Director Center for Third World Organizing

Neil Watkins, Washington Office Coordinator Center for Economic Justice

Roland Watson Dictator Watch

Robert Weissman, Co-Director Essential Action

John Witeck, Coordinator Philippine Workers Support Committee

Kani Xulam, Director American Kurdish Information Network

Phyllis S. Yingling, President Women's International League for Peace and Freedom, United States Section

cc: The Honorable Paul H. O'Neill, Secretary of Treasury The Honorable Andrew S. Natsios, Administrator, U.S. Agency for International Development

Karen Orenstein, Washington Coordinator 
East Timor Action Network:10 Years for Self-Determination & Justice
PO Box 15774 
Washington, DC 20003-0774 
202-544-6911 (tel.), 202-544-6118 (fax) www.etan.org

see also For A Debt-Free East Timor

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