East Timor to cut red tape to attract investment: Gusmao

SYDNEY, December 13 (AFP) -- East Timor is planning to cut red tape and simplify legislation to help the poor and troubled nation attract foreign investment and create much- needed jobs, President Xanana Gusmao said.

"The challenge incumbent upon all of us is to work together to transform the economy and to lift our population out of subsistence agriculture and poverty," he said in a speech to the Australian Timor Business Council in Sydney.

Gusmao said he was disappointed to learn from a World Bank study that East Timor was one of the most difficult countries in which to register a company.

"Among 175 countries, Timor-Leste was ranked 174. Only Congo is worse than us," Gusamo said Tuesday.

"This served as a wake-up call for our government," he said, according to a copy of his speech received Wednesday.

Prime Minister Ramos-Horta was giving priority to simplifying all legislation and bureaucracy relating to domestic and foreign investment and simplifying the "cumbersome" tax system by cutting or abolishing many taxes and duties, the president said.

"With oil and gas revenues now coming on-stream, we have a unique opportunity to eliminate costly and inefficient tax practices," Gusmao said.

"The intention is to reduce and/or abolish most of the taxes."

In just over four months in office, the new government had fast-tracked 25 foreign investment projects worth almost 100 million dollars, he said.

Investors from Japan, South Korea, Australia, Portugal, Kuwait, Singapore, Indonesia and Thailand had projects aimed at developing the important tourism, infrastructure, energy and fishing and agriculture sectors.

Gusmao said improving security was also a priority, with international peacekeepers and UN police deployed following unrest in April and May.

At least 37 people were killed as East Timor descended into chaos after street protests by dismissed soldiers quickly degenerated into street violence involving gangs of youths.

"Our main responsibility now is to create jobs for the youth, and it is here that the private sector has a role to play," the president said.

While East Timor is one of the poorest countries in the world, it has rich oil and gas reserves in the offshore Bayu-Undan fields it jointly operates with Australia and from which it is starting to receive revenues.

------------------------------------------ Joyo Indonesia News Service