East Timor: FM pledges Dili will have balanced budget by 2007

Lisbon, June 3 (Lusa) - East Timor will achieve balanced state spending and expenditure in 2007 and after this date will cease to depend on foreign donor aid, Dili`s foreign minister, José Ramos Horta, said Thursday.

Speaking at a Lisbon conference on ASEAN relations with the European Union, Ramos Horta underscored the importance of donor aid to his country in 2003.

Dili is facing a budget deficit of USD 10 million in the 2004- 2005 tax year, but "is not seeking international financial aid" and instead resorting to "special" measures to generate tax revenue.

The world`s newest nation will continue to need donor aid until 2007 to underwrite its development, noted Ramos Horta.

The Dili government is currently preparing new legislation to attract foreign investment, said Ramos Horta, and Chinese involvement in developing Timor's offshore oil resources is a key goal of this initiative.

Similarly, Timor is seeking participation of Thailand`s fishing sector to develop its potentially rich fisheries resources, he said.

German investment in the food sector and Kuwaiti cooperation in infrastructure and professional training are other potential foreign investment projects the new laws will encourage, Ramos Horta added.

Timor's main economic and political bugbear is generally considered to be its ongoing dispute with Australia over the two nations` common maritime frontier and the consequent division of petroleum revenues.

Australia is pressing Timor to accept sea borders that Canberra agreed with Indonesia before Dili`s independence, a division of the two nations` shared offshore oil resources that is considered unjust by the Timorese government and in breach of international law.

Ramos Horta said his government would continue to seek "creative ways of finding a solution" to the contested Timor Sea oil receipt carve-up.

JMH/CJB Lusa

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