HORTA DETERMINED TO IMPROVE TIMOR LESTE'S ECONOMY

10/13/2006 07:28:41 PM EDT Asia Pulse Businesswire

by Kate Carr

SYDNEY, Oct 13 Asia Pulse - Timor Leste's prime minister Jose Ramos Horta thanked business groups for giving his tiny nation a second chance, and outlined the "modest" investment opportunities his country offered to entrepreneurs, at a forum in Sydney on Wednesday night.

The forum, sponsored by the Australia East Timor Business Council (AETBC), the Research Institute for Asia and the Pacific, aimed primarily to spark investor interest in one of the world's poorest nations.

In his address, Horta struck a realistic tone acknowledging the impact of this year's unrest which led to the resignation prime minister Mari Bim Amude Alkatiri on June 26.

"As you know we are still trying to get out of the crisis that began on April 28 in East Timor," Horta said.

"We are surviving, moving away the crisis, there is much optimism today, although there is still fear and anxiety."

Part of this optimism stems from the income generated by the nation's oil and gas reserves.

"We already get significant revenue from oil and gas from the Timor sea," Horta said, noting that Italian major Eni, Malaysia's Petronas and India's Reliance were already operating in Timor Leste.

He also said the country is currently in negotiations with the Kuwait Fund over major infrastructure projects, including an extensive road building scheme and the construction of a oil refinery.

Australian firm Woodside (ASX:WPL) and ConocoPhillips of the United States currently partner Shell in the the Bayu-Undan gas and condensate field in the Timor Sea, and negotiations are continuing over the construction of a gas pipeline from the field, Horta said.

Currently investors favour Darwin, while Timor Leste is pushing for a local site, Horta revealed.

However, he was careful not to paint too rosy a picture, dwelling at length on Timor Leste's struggle to foster a more friendly environment for both investors and Non-Government Organisations.

"The most recent World Bank study... on business around the world, we came second before last in terms of the worst place for business to register," the PM said.

"These are things that I try to change," Horta said, noting that now goods take only 24 hours to two days to clear customs in comparison to up to 12 months previously.

Horta also underlined his determination to change his nation's tax regime, saying he favoured basing Timor Leste's system on that of Hong Kong.

"Most consumer items will be tax free," Horta said.

"I want to simplify the tax system, eliminate some of the taxes, reduce some."

"The idea is to try and spurt economic activities to get more money into the pockets of the poorest," Horta said.

"In seven years Timor leste has established its own parliament, government administration, law court system, a taxation nad foreign investment regime, and social welfare measures," Rodney Lewis from the AETBC said, noting that Timor Leste was not alone in finding "weaknesses and failures" in many of these institutions.

"There is no doubt the country with the right leadership can move from being one of the world's poorest to one of the leaders in our region," Mr. Lewis said, adding that the nation's Least Developed Country status offered numerous opportunities to firms willing to invest.

ASIA PULSE

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