Subject: Food fight in East Timor

Asia Times

Southeast Asia

Jul 10, 2009

Food fight in East Timor By Simon Roughneen

DILI - Allegations that East Timor Prime Minister Xanana Gusmao signed off on a food contract benefiting a company that listed his daughter Zenilda as a shareholder has caused new political ructions in the volatile young country. The opposition charges aim to tarnish the reputation of the new country's former resistance hero and threaten to spiral into new bouts of political instability.

The story first aired on June 26 by the Australian Broadcasting Corporation, claiming that the local Prima Foods company received a US$3.5 million government rice supply contact as part of the government's spending program to deal with East Timor's on-off food insecurity problems. In total, 16 contracts were awarded at a total value of $56 million.

The government has retaliated that the opposition Fretilin leaked the story to the media in part to destabilize the Gusmao-led coalition's attempts to develop a new anti-corruption watchdog. Dili's parliament was due to discuss the proposed body last Monday and Tuesday, just after the Prima Foods story broke, and in the end the law was passed 38 votes to none.

Christopher Samson is executive director of LABEH, a Timorese non-governmental organization that promotes clean governance. He told Asia Times Online, "I think this whole issue is party politics. These contracts are awarded by the Ministry of Commerce and Industry, and the [Prime Minister] merely signs off on a process that takes place elsewhere."

Perhaps, but the opposition clearly senses blood. Reacting last week to the initial news, Fretilin member of parliament and spokesperson Jose Teixera told Asia Times Online that "the [prime minister] has a lot to answer for and we [are] considering holding a parliamentary inquiry into this issue". There seems, however, no clarity about what exactly should come next, perhaps typical for a country that lacks legal resources and has over 4,000 legal cases backlogged.

Nobel peace laureate and President Jose Ramos-Horta has jumped to Gusmao's defense. At a Wednesday press conference at Dili's international airport, he told media, Asia Times Online included, that - "just because someone is in government, does not mean that their family must go into unemployment". Ramos-Horta added that similar questions were raised about former prime minister Mari Alkatiri of Fretilin during his term in office, and that "Western media are always trying to portray Asian countries as corrupt".

Fernanda Borges, a member of parliament and leader of the opposition National Unity Party told Asia Times Online - "the president must do his job, he cannot distance himself in this manner. According to the constitution the government is accountable to the president and the national parliament". He added, "As for the president's remarks about family members of office holders not having to remain unemployed, fair enough. However, that does not mean that they are funded by the state."

After spending most of the 1990s in a Jakarta prison, Gusmao initially planned to stay out of party politics upon his triumphant return home to East Timor. He wanted to preserve his historical role as a national resistance leader during Indonesian occupation, transcending the grubby attrition of party politics and legislative wrangling.

Yet he was the overwhelming winner of East Timor's first presidential election in 2002, maintaining on the hustings his "father of the nation" persona. After the spasm of political violence in April-May 2006, which displaced around 100,000 Timorese and almost destroyed the country's fractious police and army, Gusmao took a more activist role in party politics, making a number of incendiary speeches in which he effectively blamed Fretilin for the violence.

In the following months, speculation grew about whether the resistance hero would get his boots muddy in East Timor's thriving, if fractious, parliamentary democracy. Gusmao's apparent animus toward Fretilin, dating back to resistance-era fractures over leadership and tactics, impelled him to compete, and ultimately emerge as prime minister after the 2007 parliamentary polls.

Troubled transition

Gusmao remains popular, and based on 2007 election results, where his evocatively-named CNRT (National Congress for the Reconstruction of Timor - a recycling of the resistance-era brand) party won 24% of the vote, is the country's second largest after Fretilin. Prominent Timorese businessmen have recently demonstrated their support for the now embattled prime minister.

At a press conference, Prima Food shareholder Julio Alvaro claimed he bought Gusmao's daughter's shares before the contract was signed. "When the company was set up she was part of it. But after she got information from the government which said that according to the procedures, the daughter of the prime minister should not get any contracts, she submitted a letter of resignation to her colleagues in the same company in order for her to resign as the owner of the company," Alvaro said.

However, when asked for documentary evidence to support the claims, the press conference was called to a halt. Some Gusmao supporters have sought to deflect criticism by playing the nationalist card, with one speaker, Hercio Campos, quoted as saying, "We don't need any foreigners to come here to point out any wrongdoing. We are the ones who will resolve our internal matters." He claimed that Gusmao was among the top political leaders able "to stop corruption and nepotism in the near future".

East Timor will soon mark the 10th anniversary of its 1999 rejection by referendum of Indonesia's abusive occupation, which started with an invasion in 1975. Since then the new country has received an estimated $3 billion in international assistance, with various United Nations (UN) missions working alongside the government since full independence was attained in 2002.

After 2006 factional violence saw the collapse of the security forces and 100,000 people driven from their homes, an Australian-led international stabilization force was deployed. Currently the Timorese police force is resuming responsibilities from its UN counterpart, a project which the UN Mission in East Timor hopes will be completed by the end of 2009 or February 2010, when the UN Security Council rules on whether or not to extend the UN mission's mandate.

East Timor is still suffering from growing pains. In 2008 the country was ranked at 145 out 180 on corruption watchdog Transparency International's Global Perception Index. The World Bank's "Doing Business 2009" report ranked East Timor 170 out 181 as a commercial location. Still East Timor's non-oil economy grew by 12% in 2008, bucking the downward global trend.

According to the World Bank, much of that economic growth came from government spending, with cash from the national petroleum fund used to pay for various projects including the now contested rice importation contracts.

"Yes, there is corruption in [East Timor], but compared to the last government, this administration is much more transparent," said Samson. "Still, the law is the law, and if any wrong-doing has been perpetrated, then due process must follow, irrespective of who is involved."

Borges says he wants East Timor's proposed anti-corruption body to prioritize the Prima Foods case, seeing this as a litmus test of the prime minister's commitment to curbing graft. Significantly Gusmao campaigned on an anti-corruption ticket when leading his alliance towards a parliamentary majority victory over Fretilin at the 2007 polls.

With that election victory, Gusmao set in motion last year the legislative process to create a dedicated anti-corruption commission to curb endemic graft. "I do not believe Xanana to be personally-corrupt," said a prominent Timorese political analyst, who spoke on condition of anonymity. "He spent his life fighting the corrupt and violent Indonesian occupation ... We have to clarify the story, and then see how the details fit with the existing laws on these matters."

Simon Roughneen is a roving freelance journalist. He has reported from over 20 countries, and is currently based in Southeast Asia.


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