The Economist [UK}

June 17, 2010

Timor-Leste and Australia: A Widening Gap

Hello, my name is José, I’m from Timor-Leste and I’m here to complain

REMARKABLY forgiving of Indonesia for its brutal 24-year occupation of their country, Timor-Leste’s leaders seem less tolerant of Australia. As the president, José Ramos-Horta, sets off for a state visit to Australia on 21st June, he will be packing a little list of grudges.

One is that Australia, one of the country’s biggest donors, squanders its aid on foreign consultants. Meanwhile, a popular American-Canadian NGO, the Peace Dividend Trust, that is creating much-needed local jobs, is seeing its funds from Australia’s AusAID dry up. Mr Ramos-Horta wrote to Australia’s ambassador that the group’s project had a “more tangible and important impact” than any other economic-assistance project.

Timor-Leste has also long been nurturing a grievance about the oil- and gas- rich fields in the Timor Sea straddling its maritime borders with Australia. Since independence in 2002, negotiations on sharing the resources have at times been acrimonious. Australia’s second-largest oil company, Woodside, recently proposed processing gas from Greater Sunrise, a field 150km (93 miles) off the Timorese coast, on a floating plant, rather than on Timorese soil. This incensed a government that is desperate for jobs for a young and fast-growing population of about 1m. More than 80% live from subsistence farming. In urban areas the youth-unemployment rate is 35%.

Woodside argues that an onshore plant would be both much more expensive and technically risky, entailing a pipeline through a seismically active” 3km-deep ocean trough. Woodside is a private company, but the dispute heightens the Timorese perception that Australia is trying to grab more than its share of Timor Sea wealth.

Xanana Gusmão, the prime minister, has threatened to reject Woodside’s plans, even if it means forgoing the billions of dollars the project could bring. Many poor countries, he said, “fall victim to the corporate resource giants”, before boasting that “Timor-Leste will be the country that goes down in history as the nation to put a stop to it.”

This prickliness over perceived national sovereignty extends to issues of defence—although twice since 1999 Australia has sent its soldiers into harm’s way in Timor-Leste. For six years from 2002, it tried to persuade Timor-Leste to join its Pacific Patrol Boat Programme, in which Australian ships patrol the seas of South Pacific countries on their behalf. José Belo, a leading Timorese commentator, wrote that the strings attached to the programme made it seem as if Timor-Leste would have to “cede sovereignty”. China, which has already seen its commercial influence dwarf other countries’, eagerly stepped into the void, selling Timor-Leste two gunboats.

Many Timorese remember Australia’s appalling record on East Timor under Indonesian rule, and Mr Ramos-Horta will want to be seen to stand up to his hosts, though he himself is not an inveterate grumbler. As Mr Belo puts it: “We don’t like being pushed around. Even if we think we might lose the fight, we will still fight it…it’s a matter of national pride.” Just ask Indonesia.

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