The sun rises on Timor's fortunes

May 21, 2005

A fledgling nation takes control of its own destiny, reports Lindsay Murdoch in Dili.

Jose Ramos-Horta sips Cuban rum and listens to classical music in the thatched-roof house he has built on a hill overlooking Dili harbour. Relaxed after a long day of appointments, the Nobel laureate and Foreign Minister of the world's newest nation drops his diplomatic guard to discuss a telephone call from Alexander Downer that he will never forget.

Negotiations between Australia and East Timor on how to divide billions of dollars in expected revenue from Greater Sunrise, a giant natural gas field in the Timor Sea, had stalled and his Australian counterpart was delivering a blunt message.

Australia had a trillion-dollar budget and the Howard Government could afford to walk away from reaching an agreement with the tiny half-island nation, Downer told Ramos-Horta.

Australia had dramatically upped the ante in a high-stakes game of bluff over Greater Sunrise that on conservative estimates has gas reserves worth at least $US10 billion ($A13.2 billion). Ramos-Horta, who lives among East Timor's poor, knew that unlike its affluent neighbour, East Timor could not afford to lose revenue from Greater Sunrise.

Three years after gaining independence, East Timor's fledgling Government is still struggling to improve the lives of its 900,000 people, two-thirds of whom are reliant on subsistence farming in the country's mountains and valleys. There are times when many of them do not have enough to eat.

Every day desperate, malnourished villagers walk in silence past Ramos-Horta's house on their way down from the mountains, hoping to find a way to survive in Dili, which has been home to thousands of big-spending United Nations employees for six years.

Yesterday, as the Timorese celebrated independence day, and the last of the UN peacekeepers packed to leave the country, Ramos-Horta said that reducing the poverty level was his Government's priority as it entered what diplomats say will be an uncertain post-UN era.

"Particularly because of extra revenue now and over the next few years from oil and gas, we will see a reduction in the poverty level," he said. "I am absolutely confident we can achieve our goals."

Most Timorese don't know it yet, but the governments in Dili and Australia have struck a basic deal on Greater Sunrise that will reap East Timor $US5 billion - a deal that will underpin the country's economic future.

There are still important technical issues to be worked out and maybe another laborious officials' meeting to be called, but both countries have agreed to split royalties from the field equally and to put aside for decades any final drawing of disputed maritime boundaries.

Despite Downer's threat that Australia was willing to walk away from Greater Sunrise, the deal represents a huge win for East Timor, which Australia at first insisted would get only an 18 per cent share of the royalties.

The Age can reveal that the deal struck in the latest round of talks, which ended in Australia on May 13, will include a maritime agreement under which Australia will be responsible for patrolling East Timor's southern waters. For East Timor to do this itself would cost tens of millions of dollars a year.

Under the broad agreement, new jobs will also be created for scores of Timorese, either in East Timor or Australia. Ramos-Horta still calls Downer "my good friend".

But Australia's tough stand has caused some bitterness in Dili where Prime Minister Mari Alkatiri has established a functioning democracy amid the ruins of 1999 when Indonesian-backed militia destroyed most buildings and infrastructure.

Aside from Greater Sunrise, Australia is reaping more than $A1 million a day from oil fields in another disputed area of the Timor Sea that is twice as close to East Timor as it is to Australia.

Some of Dili's elite refer to Canberra's "swindling" of East Timor's reserves that was precipitated in 1972 with the signing of a Seabed Boundary Agreement with Indonesia that set Australia's border three-quarters of the way to East Timor.

Three years later Indonesia invaded the territory that Portugal had ruled with benign neglect for 400 years and then abruptly abandoned to an unknown fate.

Pat Burgess, a human rights campaigner who has lived in East Timor since 1999, said Canberra's stand had made him and other Australians working in East Timor ashamed of their country.

"People are literally starving to death in the mountains here because there is no money in Parliament's coffers to employ people so they can earn enough money to feed their children," he said.

"The lack of food leads to the susceptibility of a range of diseases. People are dying here that need not die."

Meanwhile the country's population is exploding with one of the world's highest birth rates - more than 3 per cent a year - which economists say will hurt efforts to improve the economy.

East Timor's health statistics are on a par with Rwanda. Twelve out of every 100 children die before the age of five; almost half the population lives on less than 55 cents a day; nearly half the population is unemployed and more than half is illiterate. Life expectancy is 57 years compared with 79 in Australia.

Dan Murphy, an American doctor who runs a clinic in Dili where he and nurses treat up to 300 patients a day, said that despite a large UN presence in the country since 1999, living standards for most Timorese have only slightly improved.

"In the villages the people are living the same way they have for centuries," he said.

"This is a beautiful, peaceful country. The people have suffered in the past and are not suffering as much now.

"They have hope. They have heard something about the Timor Gap but don't know what it means. But they are still dying when they should not be."

The UN can claim East Timor as a success story after it officially withdrew its peacekeeping mandate yesterday. That success has been largely due to the more than 15,000 Australian soldiers who have served in the country since 1999, Australia's largest overseas troop deployment since the Vietnam War.

The last 100 of the Australian peacekeepers will be gone from East Timor's border area by mid-June, leaving only 26 Australian soldiers as advisers and trainers in East Timor's 1500-strong defence force.

Xanana Gusmao, the former freedom fighter who became East Timor's first democratically elected president, this week paid tribute to the peacekeeping forces, known as the PKF.

"Your role, dear officers and soldiers of the PKF, throughout these challenging years has been in essence to make peace, keep peace and strengthen peace," he told the last UN military parade on Thursday. "And in Timor Leste (East Timor) you have succeeded admirably."

But beyond the pomp and ceremony of independence day, and the UN pull-out, lie daunting challenges for Alkatiri's Government as it grows out of the shadows of the UN.

Some ministers refuse to listen to criticism. The US State Department has documented unchecked police abuses and the deliberate hampering of political opposition. A lack of trained judges has created logjams in the courts.

East Timor's emerging institutions have struggled to spend even the paltry $US80 million in foreign aid money that made up this year's budget despite the chronic needs of the people.

The Catholic Church, the most powerful institution in the country where 95 per cent of the population are Catholic, has shown an alarming willingness to involve itself in the affairs of state, backing a three-week protest in Dili over its push for religion to be compulsory in school curriculums.

The Bishop of Baucau, Basilio do Nascimento, the most influential religious figure in the country, has made it clear the church remains unhappy with Alkatiri's uncompromising leadership.

"To remove the Prime Minister from his job we must go through the democratic process," Monsignor Basilio was quoted telling protesters on the Dili waterfront the day the protest ended.

The Government is walking a tightrope over the need for Timorese to see justice for the killings, rapes and other atrocities committed in 1999 during the guerilla war with Indonesia.

Wanting to establish good relations with Jakarta, the Government has agreed to set up a Truth and Friendship Commission with Indonesia and it hopes Indonesian officers will admit their responsibility and apologise to the Timorese.

Ramos-Horta said that if they do not grab the opportunity, controversy about the events of 1999 will continue to haunt Indonesia for years.

"This is an opportunity for Indonesia to more or less put the past behind it," he said. "We have to be respectful of the victims, those who are scarred by the violence of the past. There will be no trials for the officers allegedly responsible."

Ramos-Horta does not play down the problems confronting East Timor. But he declares that his country is open for business.

"East Timor is safer than Darwin and some suburbs of Sydney where my mother has been burgled three times already," he said.

"And all these regular travel warnings from Alexander Downer, my good friend, are nonsense. East Timor is safer than his state of South Australia. There are fewer muggers."

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