Subject: Interview: World Bank sets budget to rebuild E.Timor

INTERVIEW-World Bank sets budget to rebuild E.Timor

By Paul Tait

DARWIN, Australia, Nov 16 (Reuters) - The World Bank said on Tuesday between $260 million and $300 million would be needed for medium-term reconstruction in ruined East Timor and that it would seek most of the funds from donors in Tokyo next month.

That figure is outside immediate humanitarian needs, which the United Nations has set at $199 million, and the cost of the U.N. two-to-three year administration of East Timor, said Klaus Rohland, head of a World Bank-led assessment mission.

``We came up with an overall capital budget of roughly $260 million to $300 million for a three-year period, which we will still need to fine tune,'' Rohland told Reuters in an interview.

The first disbursement from a trust fund being set up by the World Bank would likely be in about six months and the World Bank would itself contribute about $10 million, Rohland said.

Rohland said his multi-agency mission was finishing a 100-page draft report on its two-week visit to the shattered territory and that he would brief Sergio Vieira de Mello, the new head of U.N. operations in East Timor, later on Tuesday.

Brazilian diplomat Vieira de Mello was due to arrive later on Tuesday in the East Timor capital of Dili. He will head the U.N. transitional administration in East Timor (UNTAET), which is expected to be in place for between two and three years.

Formal briefings would be held with the United Nations in New York next week ahead of an international donors' meeting being organised for Tokyo on December 17.

The World Bank's mission included representatives from the International Monetary Fund, the Asian Development Bank, the European Union and donor countries like Australia, Japan and Portugal, as well as about 20 senior East Timorese officials.

DEVASTATION SHOCKS WORLD BANK

Members of the World Bank mission expressed shock at the extent of devastation in the former Portuguese colony hit by waves of violence by vengeful pro-Indonesia militias after East Timorese voted on August 30 to cut ties with Jakarta.

Much of Dili was razed and some mission members said between 70 percent and 80 percent of infrastructure across the territory had been destroyed.

``We very much want to get to the donor community the message that it is not an East Timor that is a typical post-conflict situation...it is an East Timor that has been ravaged by militia destruction and that needs immediate reconstruction,'' said Fernanda Borges, an East Timorese macroeconomic adviser.

Borges said the mission had identified a number of key areas that required immediate action in order to build a sustainable East Timorese economy.

These included removing blocks on roads and ports so commercial activity could begin, establishing transportation, setting up a payments system for the civil administration and the private sector, and setting up a taxation and customs structure for non-humanitarian goods and services.

``That needs to be quickly done to establish the little revenue that we can start developing,'' Borges told Reuters.

Crop planting was another immediate need ahead of the imminent wet season, with assistance needed for the establishment of small credit systems and the provision of tractors and tools.

Key economic institutions were also needed to ensure competent management. ``Those are the priorities. It's a long list, but they are interlinked and we can't have one happening without the other,'' Borges said.

23:12 11-15-99


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