Subject: SMH: Gusmao lashes out over oil rights

Sydney Morning Herald

Gusmao lashes out over oil rights May 25, 2004

East Timor's independence hero is furious with Australia, he tells Peter Hartcher in Dili.

Xanana Gusmao, the President of East Timor, has accused the Australian Government of pursuing a policy on the rich seabed oil reserves between the countries that "offends our intelligence".

Mr Gusmao said he could not accept the Government stance in negotiations that opened last month, and he wants to break off the talks and begin afresh.

In an interview with the Herald he said the Government had failed to respect the legitimacy of East Timor's claim, and threatened to make his country "a permanent beggar - we will be like the Solomon Islands, like Libya, like Haiti".

Denied access to its most valuable economic asset, the multi-billion-dollar oil and gas deposits under the Timor Sea, East Timor, one of the world's poorest countries, would depend on foreign aid permanently.

"Now, because of the generosity of Alexander Downer and John Howard they will keep forever generously helping us?" he asked rhetorically, a reference to Australia's $39 million aid to East Timor in next year's budget. "No, please, not because Australia is big, strong and rich. Our dignity is something we have to preserve." Advertisement Advertisement

Throwing up his hands in exasperation, he said: "Alexander Downer, I like him very much, but on this issue - aaagh! I do not accept my friend Alexander Downer saying 'no, it's not yours'. We have a legitimate claim. How can we behave like beggars?"

East Timor argues that for every dollar of aid it receives from Australia, Canberra collects $10 in oil and gas revenues that are rightfully East Timor's.

Australia negotiated the seabed boundary between the countries when East Timor was still occupied by Indonesia. East Timor, which last week celebrated its second anniversary of independence, has repudiated that agreement as one conducted by an illegal occupation.

It has demanded that Australia draw a new boundary line. Canberra has agreed to negotiate, but Dili is angry at the pace of the negotiations, the forum in which they are held, and Australia's decision to continue issuing oil drilling licences in disputed areas. And in the interim, it claims, Australia collects $1 million a day in oil and gas revenues that rightfully belong to East Timor.

Mr Gusmao said his country now had democracy, but "without money, democracy can fail. When you go to bed hungry, how can you think, 'no, it's all right, I am democratic?' "

He said he already had difficulty containing expectations. "I say to people, 'calm down, calm down', but I don't know how long I can maintain stability. We are losing a million dollars a day but currently we have no schools, no roads, no jobs."

He said of the negotiations: "I say to my Government, I say to my Parliament, we have to have a pause. And to the Australian Government too - a pause to talk better, so that we can approach this problem with open minds. I believe there are other avenues to go down."

East Timor officials already are debating alternative approaches to the negotiations, due to reconvene in September.

Mr Gusmao is incensed that Australia refuses to submit the dispute to international mediation. The Federal Government withdrew its recognition from the International Court of Justice and the International Tribunal on the Convention of the Law of the Sea two months before East Timor achieved independence.

Australian officials said that Australia always insisted on conducting its border negotiations bilaterally and would not submit to international arbitration.

East Timor also is frustrated that Australia will not agree to meet monthly and will only hold talks every six months or so.Mr Gusmao said that at this rate by the time the talks ended "all the resources will be gone".

In the interim, Australia has agreed that East Timor take 90 per cent of the revenue from a shared production zone, while Canberra collects the remaining 10 per cent.

In the agreement with Indonesia, the split for the same zone was 50-50. Australia calls the interim deal "generous".

"I get a little upset," said Mr Gusmao. "Australia says, 'because we gave 50 per cent to Indonesia, we're generous' in allowing East Timor 90 per cent. But the resources were neither Indonesia's nor Australia's to dispose of."

Separately, East Timor's Prime Minister, Mari Alkatiri, also insists on swift recovery of the resources, telling the Herald: "In a battle between David and Goliath, the tactics of each side cannot be the same."

East Timor has a population of 800,000 and a gross domestic product of $520 million. Australia's is $800 billion.

Mr Alkatiri said Australian officials, whom he declined to name, had asked East Timor to stop speaking publicly against the Australian position.

But, he said, "if we don't do this, as David, we will die".


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