LH Bulletin andSurat Popular    |    Reports & Announcements    |    Mission Statement    |    How to Join the LH Listserv    |    Home

Issue focus: Banking and Payments Authority

Table of contents:

Part 1

• The Banking and Payments Authority (BPA)
• Glossary of banking terms
• Civil Society Forum statement on MDGs
• Dr. Andrew McNaughtan, 1954-2003
• Who and What is La'o Hamutuk?

Part 2

• Nigeria exchange on oil development
• Exchange participants return from Cuba
• Sixteen Days Against Violence
• Oil money requires good management
• Editorial: Justice after UNMISET
• Reflections on the Indonesian invasion, 7 December 1975

East Timor-Nigeria Exchange on Petroleum Development

Seven East Timorese activists from six local NGOs are visiting Nigeria during the second half of January to study the oil and gas industry. La’o Hamutuk has organized this group, which includes (L-R) Jesuina Soares (La’o Hamutuk), Carlos A. B. Florindo (ETADEP), Julino Ximenes da Silva (Perkumpulan HAK), João da Silva Sarmento (La’o Hamutuk) and Liliana E. A. C. Hei (Grupo Feto Enclave Oecusse) standing; Aurelio Freitas Ribeiro (KSI, and Justino da Silva (NGO Forum) in front.

Hosted by Oilwatch Africa and Environmental Rights Action, the East Timorese hope to learn from Nigeria’s experience about the negative and positive impacts of forty years of petroleum development. The group will meet with communities in the Niger Delta, government officials, and local NGOs to see how oil and gas operations have affected their environment, politics, living standards, and quality of life, and to see what good and bad lessons East Timor can learn from Nigeria’s experiences. After they return to East Timor, members of the delegation will develop and communicate their understanding to civil society and responsible officials here.

Exchange Participants Return from Cuba

In October 2003 nine participants from eight East Timorese NGOs — La’o Hamutuk, Fokupers, HAK Association, Haburas Foundation, Feco-Uatocarabau, Naroman-Bukoli, the Men’s Association against Violence and the Sa’he Institute for Liberation — participated in an exchange with the Martin Luther King Center in Cuba. The exchange was organized to learn more about Cuba’s alternative political and economic systems as well as their systems of education, health and agriculture.

Victorious after the revolution against the Batista dictatorship in 1959, Cuba under the leadership of Fidel Castro underwent a major social transformation to replace old oppressive systems. The government nationalized all land and property including that of the church, although private landowners who stayed in Cuba were allowed to keep 64 hectares each. In Cuba, the public sector dominates the private sector, and the government rules to serve the people. This report will focus what exchange participants learned about Cuba’s education, agricultural and health systems during their twenty day visit in the country.

Education

Cuba virtually eliminated illiteracy in one year, in a campaign involving 260,000 volunteers — farmers, workers, students and soldiers. At the beginning of 1961 illiteracy rates were 24%. Within a year the levels had dropped to 4%, and now only 0.2% of the population are illiterate.

In general, the state provides free education from nursery school through university level. School is compulsory for everyone until secondary or high school. If students don’t want to continue to university level, they must find alternative courses so they can gain the experience and skills needed to live independently.

The school curriculum is centralized, meaning the same basic curriculum and materials are used for students in the city and in the most remote areas of the country. If there are students studying in mountainous areas the government sends teachers and books as well as equipment such as computers, videos, and televisions, and ensures that there is electricity. At the same time, the curriculum is flexible in order to reflect students’ daily experiences. What students learn directly relates to their daily lives. For example, agricultural courses focus on the agricultural problems people confront every day, rather than topics unrelated to people’s real experiences. After graduation, all university graduates must live in grassroots communities for two years, after which they are free to look for work wherever they choose.

The Cuban education system focuses on helping people to develop themselves based on the principles of solidarity and humanity. It was difficult for us to find someone using their educational training only to serve themselves.

“Popular Universities” have been established for people who want to develop their intellectual capacity further, regardless of age or prior level of education. This kind of university helps a community organizer in a small village continue learning. Older men and women are also able to continue to learn what they choose.

Agriculture

Agrarian reform has been an important factor in Cuban agriculture. Most of the good land which formerly belonged to wealthy people was re-distributed by the government for common production. Most of the common production land is worked by cooperatives, through to distribution of the agricultural goods.

There are two kinds of cooperatives in Cuba: In an agricultural production cooperative, the government gives land to landless people to produce their own food and to develop the Cuban economy. In order to receive this land, people must agree with the government to produce food. The government continues to distribute food to people; the food comes from the people to the people. From the cooperative system food is also produced for hospitals and schools. In a credit service cooperative, people who already have land and equipment put these together for joint production.

The role of the government in developing agriculture is as follows:

Ø     The government buys agricultural produce and distributes it among the Cuban people and exports it to other countries. The government buys 80% of the production from the cooperatives. The rest is used by the farmers or sold, depending on need.

Ø     The government provides credit to the cooperatives depending on need.

Ø     The government provides technical assistance in agricultural methods, such as government personnel trained to assist farmers with production, accounting and other subjects.

Ø     The government controls the prices of all production, as Cuba doesn’t work under a free market model. The price of goods is set by the government, rather than by those selling merchandise. This practice allows the government to prevent extreme increases or decreases in prices.

The economic blockade imposed by the United States has forced many people to leave villages and move to cities, but this doesn’t mean people abandon agriculture. The government has developed urban agriculture systems. People form cooperatives and farm vacant land in cities to provide themselves with food. People use all areas of unused land, even the small plots in front of their houses.

Health Care

Health care is divided into three basic kinds: primary or preventive health care, secondary or specialist health care, and hospital care. Primary or preventive health care is a family doctor responsible for 100-150 people. The family doctor works with rural communities. With this system Cuba manages to provide health care to 98% of the population. Everyone has access to a doctor, and clinics are open 24 hours a day. In the morning the family doctor sees patients at the clinic, and in the afternoon she or he may visit people’s homes to attend newly sick or pregnant people. Once a week specialist doctors visit the family doctor clinics to learn what the current needs are. The objective of the family doctor is to prevent illness. Patients who the family doctors cannot treat are referred to specialist doctors. If needed, the patient is then sent to a hospital for diagnosis or treatment. Hospitals are well equipped and have enough expert doctors to help if the specialist doctors have been unable to make a diagnosis.

The Cuban health care system is so advanced that currently many students from other nations, including East Timor and the United States, are studying in Cuba.

Contact La’o Hamutuk if you would like more information about Cuba or the intercambio.

Sixteen Days Against Violence

For sixteen days (25 November to Human Rights Day, 10 December 2003), the National Movement Against Violence (MNKV) organized a campaign against violence in four districts: Oecusse, Aileu, Bobonaro and Lautem, on the theme of Love, Peace, Equality and Justice to End Violence in East Timor.

Around 20 members of MNKV’s working team (which has five people in every district) held trainings and education directed toward children, youth, and adults. The training was on Human Rights in general, including Children’s Rights, Gender and Domestic Violence.

The campaign is working to improve community awareness of gender-based violence, and to coordinate well among MNKV’s national and district level members, especially in these four districts.

Oil Money Requires Good Management

by Joseph E. Stiglitz*

It is sad but true that most natural resource-rich countries do not grow faster or perform in other ways better than those with fewer natural resources do. This observation would seem to contradict the basic laws of economics since more natural resources should provide more economic advantages and opportunities. Economists and other social scientists have worked hard to explain this anomaly and to figure out how these countries can maximize the benefits of their abundant natural resources.

Yet, the failures are legion and continuous. Oil-rich Nigeria has squandered a quarter trillion dollars of oil revenues and is deeply in debt. Two-thirds of the population of Venezuela still lives in poverty. Civil wars, fostered in varying degrees by struggles over control of oil, gas, and minerals, have devastated a host of resource-rich countries.

Part of this instability is explained with simple economics. Natural resource wealth can destabilize exchange rates. It can cause currency appreciation that weakens sectors of the economy not based on natural resources by making it difficult for manufacturers to export or to compete with imports. Meanwhile, the natural resource sector of the economy provides substantial revenues, but does not create employment throughout the economy. The resulting unemployment can give rise to political and social instability.

But the most fundamental problems that many resource-rich nations face are political. Control over natural resource wealth provides leaders with little incentive to share power, and gives leaders the means with which to buy legitimacy rather than earn it through elections. Leaders undertake costly investments to buy political support through job creation with contracts often awarded to well-connected insiders. Because rent seeking and state subsidies direct investment to unviable projects incapable of attracting private financing, many of these extravagant projects fail to lessen the country’s dependence on natural resource development. The desire by government leaders to control wealth generated by natural resources often discourages the development of democracy and prompts violent conflict and resistance by those who have not benefited from the resource wealth and who feel shut out of centralized, undemocratic political systems.

To avoid these outcomes, political leaders and citizens need to regard their country’s natural resources as the nation’s endowment. These resources do not belong exclusively to the current government or generation, but to all citizens and generations. The current government and generation are simply trustees. To use these resources for one’s own benefit, leaving future generations impoverished, is to steal their patrimony. Leaders inside and outside of government share a responsibility to promote this sense of stewardship in resource-rich countries.

Transparency of information about revenues received and fiscal accounting standards are key to increasing natural resource management and wealth. National accounting frameworks that do not appropriately take account of the depletion of resources are misleading; they prompt governments to think that the economy is becoming wealthier, when it may be becoming poorer. This false sense of wealth leads to bad decisions.

Even more important is information about what the government receives for oil or other natural resources, how this compares with what other countries are receiving, and how the government uses the funds it receives from the sale of natural resources. Governments should recognize that even in more developed countries major oil companies have tried to minimize their royalty payments by under-reporting the effective price of oil and over-reporting their costs. It was only through hard research that such evasion was detected, for instance, in the State of Alaska, and it was only through even harder prosecution that the oil companies finally agreed to pay the more than a billion dollars that they had avoided paying the state.

Companies have strong incentives to maximize profits and the opacity that surrounds oil contracts and payments can lead to abuse. A few oil companies, most notably BP, however, are setting the opposite example, by willingly publishing what they pay. Such disclosure allows citizens in resource-rich countries to become informed about how much the government receives for the nation’s natural resources. It is regrettable that this commitment to good corporate citizenship has not been matched by most other oil companies.

Institutional arrangements like stabilization funds are essential to managing wealth derived from natural resources and ensuring that the money is used to replace the natural resource endowment that is being depleted. Stabilization funds in several countries have helped ensure that public funds are available for the rainy day when they are needed. This is especially important because international arrangements like the IMF, set up at the end of World War II to help finance counter-cyclical fiscal policy, have failed to perform the function for which they were created. The result has been that most developing countries are forced to engage in pro-cyclical fiscal policy, at great cost to the economy and society. Countries today recognize that borrowing is highly risky, and that they must rely on their own resources, especially for stabilization purposes.

There is no issue of greater importance than ensuring the long-run prosperity and stability of resource-rich countries by developing ways to use these resources and the wealth they generate well.

*Joseph E. Stiglitz, a winner of the Nobel Prize in Economics, was chief economist for the World Bank until 2000. He now teaches at Columbia University in the USA. This essay is reprinted with permission from Caspian Oil Windfalls: Who Will Benefit? (Caspian Revenue Watch, 2003).

Editorial: Justice after UNMISET

In January, a Technical Assessment Mission from United Nations headquarters in New York visited East Timor to evaluate UN involvement in East Timor after UNMISET finishes this May. The East Timor National Alliance for an International Tribunal, which includes La’o Hamutuk, presented the following statement to the mission.

The East Timor National Alliance for an International Tribunal appreciates the continuing interest of the United Nations in supporting peace, security, stability and government administration in Timor-Leste. We are, however, disillusioned by the half-hearted support for justice shown thus far, and offer some suggestions for post-UNMISET involvement by the United Nations which can help end impunity for perpetrators of crimes against our people and against humanity, between 1975 and 1999.

We are a coalition of organizations representing local and international NGOs, churches, students and victims of these crimes. Although we have been disappointed by the lukewarm interest in justice shown by East Timor’s government in recent months, we share their view that the primary responsibility lies with the international community. East Timor is a new, small and impoverished nation with a flawed judicial system. It would be unreasonable and unrealistic to expect our government alone to pursue justice.

Yet justice must be pursued, holding accountable the masterminds and commanders of atrocities committed against our people during the Suharto regime’s brutal invasion and 24-year occupation of our country. The invasion was rightly declared illegal by the United Nations General Assembly and Security Council, and many of the crimes were of universal jurisdiction, violating both the Rome Statute and UNTAET Regulation 2000/15. These were crimes against the entire world (and after May 1999 in direct violation of an agreement Indonesia had signed with the UN Secretary-General), and the entire international community shares responsibility for seeing that those who committed them are brought to justice.

In January 2000, the International Commission of Inquiry on East Timor recommended to the Secretary-General that “The United Nations should establish an international human rights tribunal … to receive the complaints and to try and sentence those accused… of serious violations of fundamental human rights and international humanitarian law which took place in East Timor since January 1999 regardless of the nationality of the individual or where that person was when the violations were committed.”

Unfortunately, ever since then, the international community has been running away from justice. It took more than half of UNTAET’s time before the Serious Crimes Unit began to function effectively, and to date 76% of the people they have indicted, including all the Indonesians, are given sanctuary by Indonesia. The Special Panels have only adjudicated 30 cases (convicting 46 people), with eight trials currently in process.

When the SCU belatedly indicted high-level Indonesian commanders almost a year ago, both the UN and East Timor’s government distanced themselves from the process; arrest warrants have yet to be issued or circulated to Interpol for this and most other indictments.

For two years the international community stalled on effective action, using Jakarta’s fraudulent ad hoc human rights court as an excuse. A few days ago, the latest travesty occurred with Indonesia’s appellate court upholding the acquittal of General Timbul Silaen, enabling him inflict the same crimes against the people of West Papua as he did in East Timor in 1999.

This record of support for justice by the United Nations, including three UN missions in East Timor over five years, has been sharply disappointing. Nevertheless, the East Timor Alliance continues to believe that there are people and institutions within the UN system who agree with our call for accountability. We therefore suggest three options, in order of preference, for the UN to consider as you decide on the nature of the UN’s involvement after UNMISET.

1. An international criminal tribunal for East Timor, backed by the political will to compel Indonesia’s cooperation, remains the mechanism most likely to secure justice. From 1974 until today, Indonesia has been at various times responsible or complicit in human rights violations, and unwilling and/or unable to hold violators accountable. Without firm pressure from the governments of the world — most especially those with global or regional interests or close economic or security ties with Jakarta — this criminality will continue with impunity. Indonesia’s political and military leaders were fortunate to commit their crimes in East Timor before the establishment of the International Criminal Court, but there is no legal obstacle to holding them accountable for crimes of universal jurisdiction defined in the Rome Statute.

2. Until an international tribunal is established, extending and strengthening the current hybrid UNMISET/RDTL Serious Crimes Unit and Special Panels could secure more justice than has thus far been possible. We urge the UN, especially members of the Security Council, to strengthen the justice mandate for a post-UNMISET mission, and to back that mandate with resources and political commitment to compel on Indonesia to cooperate. This commitment has been lacking until now, but Indonesia’s continued defiance of international human rights law and civilized behavior, coupled with the ongoing calls for justice from victims of their crimes in East Timor and Indonesia, should re-awaken the governments of the world to this necessity. In this case, the Special Panels will also need to be expanded, as they do not have the capacity to try even a fraction of those who have been indicted.

3. If the UN and the governments of the world continue to be unwilling to support meaningful justice for crimes against humanity and East Timor, an unchanged continuation of the current Serious Crimes Unit and Special Panels is unwarranted. In reality, the UNMISET/UNTAET SCU and SP have accomplished three roles:

   a) Investigating and developing evidence about serious crimes committed here, which sometimes leads to an indictment and press releases, occasionally to arrest warrants, and rarely to prosecution in court.

   b) Bringing low-level East Timorese perpetrators of these crimes to trial and conviction.

   c) Providing an excuse for East Timor’s government and the international community to avoid meaningful action for justice.

We believe that, absent a stronger political commitment, the Special Panels should be terminated when they have completed all trials begun before the UNMISET mission ends in May 2004. Task (b), which is all they have been able to do, can be performed by East Timorese judges. Serious Crimes Unit files on East Timorese defendants should be turned over to the General Prosecutor to pursue these cases in the Dili District Court (which needs strengthening and support, as does East Timor’s entire justice system).

The Serious Crimes Unit should be extended for another year, to continue task (a). Although they may not be able to issue international indictments if there is no court to try them in, that same problem would exist if the Special Panels were extended, given the case backlog and the fact they will not be extended indefinitely, as it would take many years for all those already indicted to be brought to trial. The case files developed, and press releases about those who should be indicted, can help to provide momentum and evidence for establishment and prosecution in an international criminal court.

Task (c), whether intentional or not, is a cruel charade perpetrated by those for whom justice is a weapon of realpolitik, rather than a basic human right. It would be better to do nothing than to perpetuate the lie.

Thank you very much for your concern, and we hope you are successful in crafting a follow-on UN Mission which balances the needs of the East Timorese people and government with those of the United Nations. After 23 years of UN impotence in ending Indonesia’s illegal occupation, followed by five years of intense activity, the UN has an obligation to finish what it started.

The people of East Timor continue to be patient, but we can not forget.

Reflections on the Indonesian invasion, 7 December 1975

On 7th December 2003, the East Timor National Alliance for an International Tribunal and Women’s Network (Rede Feto) urged East Timor and the international community not to forget the Indonesian invasion of East Timor, 28 years ago.

The National Alliance and the Women’s Network held activities at different times on that anniversary. In the morning, the National Alliance held a discussion about Timorese experience during the military invasion on 7th December 1975, followed by reflection on the work of the Alliance.

In their statement We Must Not Forget Invasion Day, 7th December 1975, the Alliance related their demands: establishment of an international tribunal, stronger international pressure on Indonesia to cooperate with the Serious Crimes Unit and Special Panels of UNMISET, continuing international financial support for development of East Timor, international support for human rights in Aceh and West Papua. The Alliance also asked Timorese leaders to understand and support the victims’ demand for justice.

On the same afternoon, Rede Feto organized a long march around Dili, raising awareness against domestic violence, and for respect of children’s and women’s rights. Unfortunately, not many people realized that 7th December 28 years earlier was the beginning of systematic crimes by the Indonesian Government.

La'o Hamutuk, The East Timor Institute for Reconstruction Monitoring and Analysis
P.O. Box 340, Dili, East Timor (via Darwin, Australia)
Mobile: +(670)7234330; Land phone: +670-3325-013
Email: laohamutuk@easttimor.minihub.org; Web: http://www.etan.org/lh