East Timorese go begging as foreign advisors rake it in

(Paul Toohey, The Australian - 25 April 2009)

Ines Almeida is a media flak for East Timor's Ministry of Finance. This year, she will earn a lot more than her Prime Minister, Xanana Gusmao, who has a base salary of $US1000 a month with a $US500 allowance.

Ms Almeida, a joint Australian-Timorese citizen who lives mostly in Timor, is treated as an outsider, paid in US dollars out of World Bank funds and grant money from individual nations. In her 2008-09 package, she earns a base of $US182,400 and picks up a further $US41,365 in travel expenses and living allowances, taking the package to $US219,765. When converted to Australian dollars, that comes to about $300,000. Kevin Rudd earns about $330,000.

The Weekend Australian has obtained a number of current individual consultancy contracts for foreign advisers in East Timor's Ministry of Finance. Ms Almeida's pay is at the lower end.

Former foreign minister Alexander Downer says the consultancy fees are "obscene", given that East Timor is the poorest country in Asia, where more than 50 per cent of the people earn about $US1 a day.

Rodney Lewis is a former Liberal candidate who works in and out of East Timor. This year, he will earn $341,623 for providing 271 days' work as senior legal adviser to the Ministry of Finance.

Mr Lewis gets a further $49,824 for reimbursible costs and contingencies, taking his 2008-09 contract package up to $391,447.

Ms Almeida and Mr Lewis are not the issue. It is the World Bank, in conjunction with East Timor's Finance Minister, Emilia Pires, which has approved the extraordinary consultancies. Ms Pires signs off on the contracts, which then go to the World Bank for final approval.

The World Bank's stated aim is to provide "financial and technical assistance to developing countries around the world".

Mr Downer says the UN never paid this sort of money when it was in East Timor, and still doesn't.

"It is obscene," he says. "These are aid programs; that's how the money gets there. I'm absolutely astonished. I know about these sorts of salaries and I know how much the UN pays.

"To earn $US250,000 in a year in the UN, you'd have to be very close to the top of the UN system. In a year, an under secretary-general of the UN would be paid a bit over $US300,000. I'm talking about the heads of the department of political affairs in the UN, or heads of peacekeeping missions, not media flaks or financial advisers."

Mr Downer says the UN caused a lot of resentment in the lead-up to East Timor's independence when its officials drove "comfortable cars" and lived on a luxury boat. Now the adviser pay situation had created an "enormous scandal".

"The amounts they're paying now are incredible," he says. "This sort of money is far more than East Timor's government ministers would earn and very few people in East Timor would be paid even $US20,000 a year. This is the sort of thing that becomes a bloody big problem for a country in this stage in its development. It's pretty sad."

Another Australian, Graham Daniel, is on a 12-month contract as a senior management adviser to the Finance Minister. For his 180 days' work through 2008-09, he is being paid $US236,160, plus $US60,361 in reimbursible expenses and contingencies, bringing his package to $US296,521.

Asked if he thinks the East Timorese would be shocked at how much he earned if they were aware of it, Mr Daniel says: "They shouldn't be made aware of it. I wouldn't be the most highly paid person in Timor. It's consistent with what I've been paid in other countries. My contract is certainly fairly high, but others are getting a lot more."

As a World Bank member country, the Australian Government makes a notional capital financial commitment to the bank, which may or may not be called in. In real terms, it transfers large amounts every year. In 2007-08, for example, it contributed $388.8 million to the World Bank's International Development Association.

Australia also makes one-off World Bank donations through AusAid. It gave $13 million to East Timor's five-year Public Finance and Management Capacity Building Program, out of which the consultants are being paid.

Mr Daniel says the money is not "granted to Timor" but to the project. "It can't be spent by Timor-Leste the way they want to spend it. It's tied under very stringent conditions. What I'm getting is no different to any other adviser in any other developing country and I've worked in many."

The East Timor Government says Mr Daniel has been humiliated in parliament by Opposition parties for allegedly mistreating a staff member. The incident is the subject of a ministerial inquiry.

"This is a vendetta against me because of highly corrupt people," he says. He declines to say who is behind it.

A US citizen, Francis Ssekandi, is another senior adviser to the Finance Minister. His 2008-09 package, including remuneration and travel expenses, is $US424,427 for 272 days' work.

"I earn $US700 a month," Ms Pires says.

"I personally think the money (advisers are paid) is too high ... Some of my advisers have been working in Afghanistan and Iraq and I had to compete to get them over here. It is way out of my control; we go by market standards.

"The contracts for the advisers we employ go through a rigorous public tender process. This process is very much following World Bank guidelines.

"From the time I've been minister (from 2006), we inherited (from the former Fretilin government) a dysfunctional Ministry of Finance. Thanks to these guys we have rebuilt the system. We have needed people with these skills -- and, hopefully, we won't need them for much longer.

"In post-conflict countries it is a complex job. Timorese people have not had the opportunity and education to do this. We need expertise. I am very much aware that technical assistance comes at a high price." Asked if she thinks the ordinary East Timorese people would understand the high pay packages, Ms Pires says: "I'm trying to explain to them. This is the world we live in. We all want to change the world, but I'm realistic."

Fretilin MP and party vice-president Arsenio Bano says they would not understand. "A lot of Timorese often cannot even get $1 a day," he says. "Fifty cents a day is a big thing. Even in a month some of them cannot get $5.

"The country is very poor and they (consultants) are paid too much. $US200,000 is more than the money that is invested in roads in the district of Oecussi this year. It's more than some of the school-feeding projects for 4000 students in one district of Ermera.

"It's amazing. I think there's a lack of responsibility here. The money is coming from development partners and from taxpayers ... They do not want to assist one person to earn $200,000; they want to assist one million people."

Nigel Roberts, the World Bank's country director for East Timor, New Guinea and the Pacific Islands, says he accepts that the issue is important.

"I agree the optics here may look incongruous but addressing the pressing needs of the country at this stage in its development requires help from outside, given the very small number of experienced and qualified Timorese staff available."

He says Timor is notionally rich because of oil, but there has been "a disconnect between the national income and personal incomes".

He says that while Timor's oil revenues have risen steeply, not all of that money is available for immediate expenditure because of laws which oblige the Government to put the bulk into a trust fund. Money is not being spent at the rates required and the foreign consultants are working to unblock that process.

"The Government had to be built from the ground up after independence, and this is taking time," Mr Roberts says.

He adds that last year's 12 per cent GDP growth rate relieved poverty and says that improvement has come as a result of the work of the consultants.

Mr Roberts says such fees are not unusual. "Timor-Leste needs to pay these rates if it is to attract first-rate talent, which I believe it is entitled to and needs in order to make the transition out of poverty," he says.

"Using cheaper expertise isn't going to help develop the country. In an ideal world, this type of expertise would be provided on a voluntary basis, but unfortunately no employment market anywhere in the world works on this principle, and people don't discount their services when they work in places like Dili or Moresby or Honiara."

President Jose Ramos Horta and Mr Gusmao were not available to comment yesterday but in March the President observed that "since independence about $3 billion has been spent on Timor but not in Timor".