Far Eastern Economic Review Issue cover-dated May 20, 2004

EAST TIMOR

Not Yet Ready To Go It Alone

The United Nations was to have quit East Timor at midnight on May 19. Although the country has made progress since it gained independence in 1999, concerns about corruption and problems with its economy mean that it isn't yet self-sufficient

By John McBeth/DILI

WHEN THE CLOCK strikes midnight on May 19, genuine independence will remain elusive for East Timor. That was supposed to be the latest deadline for the United Nations to withdraw its contingent of about 2,100 military peacekeepers, civilian experts, police and police advisers and hand over all responsibility to the Timorese. However, concerned about the immaturity of the nation's security and civil institutions, the UN is likely to secure Security Council approval for a reduced nursemaid role for at least another year. That should allow the struggling nation enough time to reach what UN Secretary-General Kofi Annan calls "the threshold of self-sufficiency."

sidebar: EAST TIMOR'S LITANY OF WOES

- The United Nations is likely to delay its planned departure - The economy still bears the scars of a violent split with Indonesia - The civil service lacks enough skilled staff - The border with West Timor is a concern

Given the litany of problems and challenges still facing the country, which won its freedom from Indonesia in a tumultuous, violence-filled vote in 1999, the East Timorese understand that they aren't ready to completely go it alone. "What we want to do is build the state as an institution," Prime Minister Mari Alkatiri told the REVIEW in a late-April interview in the same office where an Indonesian governor once presided over the former Portuguese colony. "The judiciary is our weakest point and parliament is still too weak to initiate its own laws. But the constitution is clear: What we're looking for is rule of law in a democratic country."

If the UN mandate is extended as recommended by Annan in a recent report to the Security Council, East Timor will still assume responsibility for internal and external security from May 20. That will leave the UN to provide military support in exceptional circumstances. The world body will drastically pare down its peacekeeping force and nearly cut in half the number of its civilian advisers. But the likely departure of the UN next year is being greeted, perhaps naturally, with a high degree of trepidation among many Timorese.

Critics worry about Alkatiri's hard-headed leadership style and penchant for micro-management. In a broad sense, many Timorese are concerned about corruption, which raises a worrying spectre once the UN ends its life-support. It is no coincidence that Western experts effectively still run the Finance Ministry and keep a tight rein on the nation's spending. Says one UN official: "People are concerned about the proclivity towards corruption because of bad habits learned from Indonesia."

Joao Mariano Saldanha, executive director of the Timor Institute of Development Studies, shares those concerns--and worries about the chance for future unrest in a highly politicized society. "Our future remains a big question mark," he says. "Pessimism is growing. There is concern over the economy, there is concern over employment. Our democracy isn't in jeopardy, but it is experiencing tests, and when the UN leaves we are worried we will go along the path of authoritarianism."

All the same, East Timor has come a long way since Indonesian-backed militia gangs laid waste to the territory in September 1999 after Timorese voted to free themselves from Jakarta's 25-year rule. More than 700 of the 900 schools burnt in the ensuing violence have been rebuilt, health centres are now spread across the country, cars and motorcycles crowd Dili's sun-drenched streets, and four-fifths of a budgeted 13,100 civil service positions have been filled.

Much remains to be done. East Timor's 18-year national development plan, launched after nationwide consultations in 2002, prioritizes health, education, infrastructure and agriculture in that order. The nation has, for example, only 20 doctors, with another 50 currently studying aboard. Alkatiri reckons it needs 250 to be self-sufficient. The nation's 6,000 teachers are deemed sufficient, but too many live in the nation's two biggest cities.

In economic terms, East Timor has some valuable natural assets, but it also must rehabilitate and develop several key sectors of the economy almost from scratch. The first revenues are coming in from the newly producing Bayu-Undan gas field in the Timor Sea, though international donors still contribute about two-thirds of the country's $90 million budget. East Timor is now engaged in testy seabed-boundary negotiations with Australia that could give it a larger share of the big Greater Sunrise field--and a total revenue windfall of somewhere between $3 billion and $12 billion over the next 20-30 years.

Alkatiri has been tough in the negotiations, but he says that he knows the limitations of a one-product economy. "I don't want us to be a petroleum-dependent country," he says, ticking off fisheries, tourism and coffee as future foreign-exchange earners. For the moment, however, he will probably have to live with East Timor's status as the world's newest petroleum state, simply because natural gas provides the only financial lifeline that may eventually buy self-sufficiency.

Broadening the economy will take much work--and money. Tourism is hostage to a lack of infrastructure and also to prohibitively high air fares from Darwin and Bali, which deter the backpackers that often pioneer new adventure destinations. In all of East Timor, only Dili has a regular power supply, and even in the capital it is turned off in the small hours of the night. Roads across the island's mountainous spine are often nearly impassable.

On the steep hillsides west of Dili, unkempt coffee bushes and the trees that shade them are testimony to years of neglect that have denuded East Timor's once-lush plantations of prized arabica beans. Last year, the poor quality of the harvest meant that East Timor exported barely one-fourth of the 8,000 tonnes produced. "The cost of rehabilitation is going to be huge," says Alistair Laird, an enterprise-development officer for the USAID-funded Cooperativa Café Timor.

RICE-FARMING HAS SUFFERED

It has also been an uphill struggle for East Timor to attain self-sufficiency in growing rice. The irrigation systems around Viqueque and other rice-growing areas along the southern coast are still being rehabilitated, but only in a piecemeal manner.

Farmers lack the seeds, fertilizer and know-how to boost their yields from the current range of between 1.5 tonnes and 4 tonnes a hectare. And until that changes, East Timor will need to keep importing rice to meet the demands of its 800,000 people.

Beyond the economy, the country has enjoyed relative political stability in spite of lingering tensions between Alkatiri and President Xanana Gusmao. Their differences grew over the way that Alkatiri, leader of the ruling centre-left Falintel party, was widely seen to have used the party's 55 seats in the 88-seat parliament to ram through a new constitution that left Gusmao as an elected but mostly symbolic head of state.

The low point in the relationship came in November 2002 when Gusmao called for the resignation of Interior Minister Rogerio Lobato, Alkatiri's powerful ally. Gusmao eventually backed down, and diplomats say that the relationship between the two has steadied over the past year because they seem to realize that the country needs the strengths of each other: Gusmao's cult-like popularity and Alkatiri's capabilities as an administrator.

For all its many problems, East Timor has a tiny core of dedicated political leaders and civil servants that many small Third World nations can only dream of. The depth of expertise needed to run a country, however, remains a shortcoming. After May 19, the UN plans to reduce the number of its experts in the Dili administration from 100 to about 60, most of them working in financial, judicial and engineering positions for which there are still no qualified Timorese to take over.

Meanwhile, the UN peacekeeping force will be cut from 1,750 troops to a lighter, more flexible 300-man force that will respond only to big security threats and conduct reconnaissance. The UN also plans to retain a 125-man international police "response detachment" to plug what the UN refers to as "gaps in the security structure." That will be in addition to 160 police advisers, who will continue to help develop the 3,000-man Timorese police force.

The UN may feel that such a significant reduction in its peacekeeping force is justified by reduced fears of Indonesia-based militia activity from neighbouring West Timor. Western military sources say it is time for the UN to reduce its Level-Five alert status, which is in fact higher than in war-torn Baghdad. "I think the TNI [the Indonesian military] is trying to do the right thing," says one senior Western officer. "I don't think there is any real external threat to East Timor." The Timorese themselves only plan to maintain 200 Border Patrol policemen along the winding frontier.

UN officials say considerable progress has been made in demarcating the 170-kilometre border between East and West Timor, which was once seen as a source of potential conflict. But while about 90% of the technical work is done, it still has to go to the political level for approval. Says Alkatiri: "We need to improve our good relations with Indonesia and try and get the TNI to understand that the time for confrontation is over."

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