Subject: CONG: Hearing on E Timor: Instability and Future Prospects

June 28, 2006 Wednesday




REP. LEACH: The committee will come to order.

And first, let me announce that tomorrow at 2:00, we tentatively have another hearing with Assistant Secretary Hill on the subject of North Korea for those that are interested in that subject.

In any regard, the subcommittee meets today to discuss the timely topic, East Timor: Instability and Future Prospects. We appreciate Deputy Assistant Secretary Eric John making himself available to testify on a situation that is still very much in flux.

East Timor has had friends in the United States Congress for many years preceding its emergence as a sovereign state in 2002, most notably, my home state Senator Tom Harkin who has, for decades, been Congress's most persistent advocate for the Timorese people. Thus, many in Washington have watched, with concern and sadness, the events of recent weeks and the circumstances as circumstances on the ground spiraled into unexpected and violent lawlessness.

We hope, with the arrival of foreign peacekeepers and the resignation of former Prime Minister Alkatiri, that the situation has turned a corner and that the people of East Timor and their elected representatives can refocus their energies on constructing a stable and prosperous future. But with fresh violence and arson in the last 24 hours, we recognize how precarious the situation remains.

Before posing a few general questions to help frame our discussion today, I would like to note two important points.

First, we want to convey to East Timorese President Gusmao our wishes for every success in his efforts to form a government that will have enough popular support to end the political crisis, reinforce East Timor's democratic institutions, and promote the peace necessary for the economic development so desperately needed by this young nation.

Second, we want to express our thanks to those countries who have demonstrated such impressive regional leadership by responding to the East Timorese government's request for troops to restore order. Australia, New Zealand, Malaysia and Portugal have committed their servicemen to the difficult and dangerous work of keeping the peace and disarming street gangs. We wish them safety and success in their mission and note with admiration the regional security cooperation embodied by their efforts.

It is my hope today that we will be able to address a number of questions that I will go into later; but at this point, let me just turn to Mr. Faleomavaega.

REP. ENI F.H. FALEOMAVAGEA (D-AS): Let me begin by thanking you, Mr. Chairman, for holding this meeting. It is a time of great concern, both for myself and also for other members of the subcommittee.

In August 1999, the people of East Timor voted for their independence. East Timorese people have walked steadily towards building a free and independent people since that time. While the violence of that year was a setback, it was not a road block. East Timor has been an example to another illegally-occupied area -- West Papua -- which, in my hope, will soon also receive its long-promised vote for self-determination.

And these are facts, Mr. Chairman, in terms of how that province has been treated historically, both by the United Nations and also even by our own countries, as well as it was done by the former presidents of Indonesia. Of course, I won't get into that, Mr. Chairman, but I also want to express my appreciation to the greater senator of your state, Senator Harkin, who has been a tremendous voice and advocate of the people of East Timor to be given the right of self-determination.

It was my privilege to attend to the plebiscite that was conducted in East Timor in 1999 with now-president of Papua New Guinea, Mr. Michael Somare. I certainly want to commend former President Carter and the members of his staff who were all there to observe the plebiscite that took place at the time.

East Timor has engaged in two internationally-monitored elections. In addition, East Timor has attempted to manage the results of its long occupation with trials of human rights violations and atrocities that were committed by the Indonesian military.

Since March of this year, however, major setbacks have occurred. Accusations of supporting violent militias from a member of his cabinet have caused mass rioting in the recent resignation of the prime minister.

The question is, is East Timor on the verge of further instability. How have the Australian peacekeepers on the ground reacted? And what circumstances are needed to encourage future stability of this country?

Again, I want to personally offer my welcome to Mr. John, who is the deputy assistant secretary of the State Department, and look forward to asking him some questions concerning this issue.

And I want to thank you also, Mr. Chairman, for holding the hearing on North Korea tomorrow, hopefully, and sincerely hope that we will be able to accomplish that task. There are some very serious questions and very serious implications on the latest development happening out of the Korean peninsula.

With that, again, Mr. Chairman, I look forward to hearing (from ?) Mr. John's testimony and thank you.

REP. LEACH: Mr. Wilson.

REP. JOE WILSON (R-SC): Thank you, Mr. Chairman, and thank you for calling this hearing. And I have the privilege of serving on the Democracy Assistance Commission led by Chairman Dave Dreier, and we have been looking forward to working with East Timor as an emerging democracy. And it has become a real disappointment, for us, as we see that country having such turmoil.

But I know that I am personally grateful for the nation of Australia for their coming in to help restore order. And so, as we all know, democracies are difficult to put together.

But I know I am very hopeful and I appreciate your service and look forward to the information you provide today and appreciate the leadership of our chairman to get the committee together.

REP. LEACH: Thank you.

Let me introduce Assistant Secretary Eric G. John. Secretary John is a career member of the senior Foreign Service, a rank that I never attained. I was a hefty member of the junior Foreign Service.

The secretary has served principally in Korea but also Vietnam and Bangkok. He is a fellow Midwesterner, which we think is a high accolade; a graduate of Georgetown University as well as the National War College.

Welcome, Eric. Please proceed as you see fit. Your full statement will be placed in the record without objection. And proceed as you --

MR. JOHN: (Off mike.)

REP. LEACH: Excuse me. If you could withhold and pull it quite close and people in the back will hear you better.

MR. JOHN: (Off mike.)

REP. LEACH: I'm not sure. Poke it. There we go. Now you're right.

MR. JOHN: Yep, okay.

I'm pleased to have the opportunity to speak about the situation in East Timor today. The administration and specifically the East Asia Bureau at the State Department, are working diligently to address the immense challenges that confront East Timor today.

And the goals are clear. We want to work with the international community and the United Nations to help East Timor overcome its immediate challenges and assist the young nation in becoming a stable and prosperous democracy in South East Asia.

I won't go over the history. I think all of you know the history well of East Timor. It's the first nation of the 21st century, the youngest nation in the world, and it's one -- it's a democracy -- that all of us want to see succeed.

Unfortunately today, after years of U.N. assistance, we're almost back again to where we were with an Australian-led international security force on the ground in East Timor. The current instability there began with the outbreak of violence in April, which then descended into a breakdown of law and order and a political stalemate between President Xanana Gusmao and his supporters and Prime Minister Mari Alkatiri and his loyalists.

Earlier this year in March, the commander of East Timor's defense force dismissed 591 striking soldiers, or about 40 percent of that entire force. These dismissed soldiers were taking part in a strike that had commenced in February, based on alleged discrimination within the military ranks by soldiers from the eastern parts of the country against those from the west. After their dismissal, many of the ex- soldiers began to demonstrate in the capital of Dili. Unfortunately, on April 28th, violence broke out and the military pursued and killed an uncertain number of ex-soldiers in a western part of the city. I was there three days later and witnessed the aftermath of this destruction, with burned-out homes, burned-out cars, markets that had been destroyed and abandoned.

The outbreak of violence led to further societal fissures and violence between and among various factions of the police and military services. As East Timor's national police complete disintegrated in Dili, the city became witness to gang activities such as looting and arson attacks, committed by groups of easterners and westerners against one another. However, at no time were foreigners targeted.

The situation rapidly deteriorated. President Gusmao took control of the Timorese military and police forces, after consulting with the Council of State and the government of East Timor invited security forces from Australia, Portugal, Malaysia and New Zealand to re-establish order in the country. There are now approximately 2,700 foreign military and police forces in East Timor, mostly under Australian command, which have substantially restored order to the country.

The events of the past few months exacerbated tensions between President Xanana Gusmao and then-Prime Minister Alkatiri. The president asked the prime minister to resign, citing the prime minister's mishandling of the security crisis, as well as allegations that he had authorized the distribution of arms to militants of the ruling Fretilin party. We encouraged both leaders to peacefully resolve their differences in accordance with the Timorese constitution and the rule of law.

Several thousand anti-Alkatiri demonstrators, primarily from the western districts, came to Dili and demanded that the prime minister step down. Protestors from the eastern districts are expected to also travel to Dili to express support for former-prime minister Alkatiri and the Fretilin party. Prime Minister Alkatiri initially resisted calls for his resignation, but he did submit his letter of resignation, as you know, on Monday this week. The president has accepted it and is expected to name a transitional government within the next few days.

The U.S. is working with East Timor's numerous bilateral donors and friends to determine how best to assist it during this crisis. We are consulting with them on the mandate of a successor U.N. mission requested by the government of East Timor. The current mission, UNOTIL, has been temporarily extended until August 20th.

We believe a U.N. successor mission should include a robust electoral assistance program, a strong police component and civil and human rights advisers. Proper police training also will be important, since only a professional and impartial police force can get the support of the Timorese people. The U.N. has dispatched a needs assessment team to East Timor, which we understand will undertake an analysis and make recommendations to Secretary General Annan. After receiving a report from the secretary general, U.N. Security Council members will determine the mandate of a proposed successor U.N. mission.

The United States mission in East Timor, led by Ambassador Rees, has done a superb job since the crisis began in April, and this includes both our American as well as our East Timorese and locally- engaged staff. I would like to thank all of them and those who traveled to Dili on temporary duty for all of their hard work and dedication during this crisis.

Let me conclude by thanking Congress for its generosity in the amount of U.S. foreign assistance it has allocated to East Timor -- for East Timor since 1999. East Timor has been one of our largest recipients of U.S. aid on a per capita basis. Besides bilateral assistance, the U.S. also has contributed via its assessed share of U.N. missions there. The U.S. Agency for International Development has an office in East Timor and it is focused on three sectors: democracy and governance, economic growth and development, and health care. We will need to take a fresh look at these programs in light of the weaknesses exposed by the current instability in East Timor. Besides standing up a professional police force, creative ways to accelerate employment will be necessary.

We look forward to working both with other nations of the United Nations and with Congress to help East Timor overcome the biggest challenge it has faced since its independence.

Thank you.

REP. LEACH: Well, I appreciate your statement and I want to just focus on one aspect. You seem to be representing the State Department as extremely positive about a new U.N. mission. There have been hints at the U.N. that our ambassador, Mr. Bolton, has expressed skepticism about a new U.N. mission, so I take it from your testimony that the United States is going to be very supportive of a renewed U.N. mission and that we will be working with the secretary general in this regard. Is that correct?

MR. JOHN: Yes. We're going to -- we're working very closely with the core group members, which are Brazil, Australia, Malaysia, New Zealand, U.K. and Portugal, working on the details of what type of mission that we would want. And we're also working closely with the U.N. Security Council. So I think all of these members see a need for United Nations' work there. We're going to help shape that.

REP. LEACH: Well, let me just say, personally, that seems very reasonable, and I -- there is a -- I don't know a country in the world that has more interest about a smaller group of people than East Timor. And there's a lot of support for anything that can be done to stabilize this country.

There is a sense that the U.S. at the U.N. has been indicating a desire for more rapid drawdown of U.N. forces in the past few years, and some other countries -- I don't know if that is exactly the case or not. Have you done any assessment or reassessment of this circumstance?

MR. JOHN: Well, I think the core group and the UNSC, as we were going through in the last few years looking at the situation in East Timor -- the assessment at each of the stages was that the drawdown of the U.N. program in East Timor was appropriate and commensurate with the analysis at the time of how the East Timorese were stepping up the role to fill those vacuums. It's obvious in hindsight right now that that drawdown was inappropriate, that the East Timorese weren't ready to take care of their own security forces.

So I think the best face that could be put on this is that it's obvious that this needs to be looked at as a lesson learned, and how we move forward with U.N. in the future needs to build on these terrible lessons that we've learned in the last few months.

REP. LEACH: Well, I think that's a very thoughtful perspective. One final question -- as we look at the U.S. role of bilateral assistance, there is also the role of the multilateral institutions -- the World Bank, IMF, et cetera. Does your department within the department work with the IMF and World Bank on East Timor-type issues?

MR. JOHN: We do. To be honest, I haven't been, you know, looking --


MR. JOHN: -- at that at the moment. We're -- the main needs, if I could -- you know, what we're looking at right now -- we need to get a good grip on the security situation, as events overnight showed, and that's going to take at least a number of months. We also have to get a trip on the election process, which is -- the East Timorese were looking at next spring, but that could be moved up. That's really a decision to be made. And then we also need to look at getting the East Timorese security forces up to snuff -- get them up to what we need.

The World Bank, IMF programs, I think would need to -- you know, we would like to work with them and build on -- help build East Timor. If you look at one of the roots of the problems, I think it's that you 70 percent under-employment or unemployment in East Timor. And that's just not a recipe to move forward as a nation. We need to find a way to get those people better jobs or jobs.

REP. LEACH: Mr. Faleomavaega.

REP. FALEOMAVAEGA: Thank you, Mr. Chairman.

Secretary John, it is my understanding that East Timor was a Portuguese colony for some 300 years before it was controlled by the Indonesian military. My reason for asking the question is the people speak Portuguese, right?

MR. JOHN: The people primarily speak either Tetum or Indonesian -- Bahasa Indonesian. Portuguese is a smaller percentage. The leadership speaks Portuguese but, in fact, that's one of the roots of the division. It is that a lot of people in -- a lot of the East Timorese don't speak the official language of the country, which is Portuguese.

REP. FALEOMAVAEGA: Am I also to understand that most of the people there are also Catholics -- they're Christians, they're not Muslims?

MR. JOHN: Yes.

REP. FALEOMAVAEGA: And I'm curious. Alkatiri is not East Timorese. Am I correct? Is he a Muslim?

MR. JOHN: Well, do you mean ethnically East Timorese? He's --

REP. FALEOMAVAEGA: Well, religiously --

MR. JOHN: He is a Muslim and yeah, he's not ethnically --

REP. FALEOMAVAEGA: What's the -- what percentage of the population is Muslim?

MR. JOHN: I -- I'd have to get back to you. I think it's less than -- it's under 10 percent, maybe under 5 percent.

REP. FALEOMAVAEGA: Could that have some bearing or influence that these are from Indonesia? That they came and lived in East Timor -- some period of time -- I mean, I'm just trying to raise the issue here whether there's some problem here between those who are Muslims and those who are Christians, Catholics.

MR. JOHN: Of the religious -- religion, as far as I know, is not playing much of a role in this -- in the current crisis. I think where Prime Minister Alkatiri comes into the rift is that he was -- he lived on Mozambique for much of his adult career and trained in Mozambique. And so it's -- in part, it's a -- the overseas leadership of East Timor that was outside of the country for much of the past recent history, and then came back. There is a rift between this -- what some would view as an imported leadership and -- versus those who remained in East Timor throughout the crisis. So I think it's more of a rift like that rather than a religious rift.

REP. FALEOMAVAEGA: I just wanted to understand this a little better. I assume that he was elected from one of the districts to be a member of the parliament?

MR. JOHN: Yes, yes.

REP. FALEOMAVAEGA: And then, as a process, his party took the majority or a coalition and that's how he ended up becoming prime minister?

MR. JOHN: His Fretilin party basically is the parliament. It's -- one party dominated, so there is no coalition.

REP. FALEOMAVAEGA: What exactly were the reasons for his dismissal of the 600 workers?

MR. JOHN: This -- I'll refer back to my notes here. It was the -- the 591 military that he dismissed. The 591 were alleging that there was discrimination against them because they were easterners, I believe, and, well, there were westerners, and that they were being -- their career opportunities were being hindered by those who -- easterners who controlled the military.

REP. FALEOMAVAEGA: What seems to be the division between the easterners and the westerners? I mean --

MR. JOHN: I think the role that they took in the fight for independence, that the westerners, because of their proximity to the border with Indonesia, were viewed by easterners as less, I think, committed to the struggle for independence.

REP. FALEOMAVAEGA: And there is still a lot of resentment within the country about what happened before the independence. One of the things that I understand that -- there was a review of the results of the recent trials of those military Indonesian officers that were tried and found out that they almost got away with all those -- nothing in criminal courts that were taken -- you know, the atrocities that were committed against the East Timorese during the plebiscite period and even afterwards, and -- could this be also one of the reasons why there is this resentment between the West Timorese and the eastern Timorese? Is there a sense that the West Timorese are more associated with Indonesia than there are those from the eastern region of the country?

MR. JOHN: I believe that there is that -- you know, the Indonesian role in Papua in 1999 in committing atrocities there, there is some component that still echoes today.

And I think that is yet another reason that we need to push so hard for accountability for Indonesia's role in those atrocities in 1999.

REP. FALEOMAVAEGA: When East Timor requested assistance from these countries, shouldn't the process have initiated or should have started from the United Nations, rather than Australia unilaterally send troops there because of the request of the president, of Gusmao?

MR. JOHN: The -- I think we're fortunate that Australia was able to send troops in so quickly; that if we had waited for U.N. informacha (ph) or a request for troops to go in, we wouldn't have been able to get them in so quickly. We're still working -- you know, we're still working within the U.N. system. The East Timorese government, both the prime minister and the president, were comfortable with having international peacekeepers --

REP. FALEOMAVAEGA: Well, this seems to be the criticism of our foreign policy towards the Pacific region. And Australia is the deputy sheriff, and we just let Australia do its thing without real consultations. And I would think that the United Nations should be initially involved, rather than Australia doing what they did.

MR. JOHN: Well, we had between 5(00) and 600 Malaysians come in at the same time. They -- they are, let's see, more than 20 percent of the international peacekeeping force that we have there. New Zealanders came in at the same time. And the Portuguese sent several hundreds soon after that. So there was, I think -- you know, the core group of the United Nations was de facto acting in concert. There is great consultation among the core group members and I would -- although Australia took a very valuable leadership role, I would hate to describe them as kind of a co-sheriff of the region. I think it was something that was really a consensus among those Asian nations coming to help, as well as Portugal.

REP. FALEOMAVAEGA: Well, I'm sure that all of these countries had real serious economic interests in East Timor, and for reason why it promoted them to do what they did. But I want your response. Is it our policy in the Pacific region Australia is more or less our lead -- leader as a deputy sheriff -- in the region? Before we do anything, we have to ask Australia for their input?

MR. JOHN: No more than we would ask any other ally in the East Asia Pacific region, or any other country where we were going to help. I don't think that's a correct characterization of the Australian role.

REP. FALEOMAVAEGA: Well, that seems to be the perception that a lot of the island country leaders have of the region -- that Australia is now the big boy in the area, and we have to listen to whatever Australia suggests or does before we do anything. But I just want to pass that on to you.

Thank you, Mr. Chairman.

REP. LEACH: Mr. Wilson.

REP. WILSON: Thank you, Mr. Chairman.

And as I indicated, I am on the Democracy Assistance Commission and I detect that you feel like democracy still can proceed.

MR. JOHN: I think the large bulk of East Timorese are very committed to democracy and that's the one thing that, you know, as I talk with Ambassador Rees about the sort of the breadth of East Timor and the East Timorese commitment to democracy, it is broad and it is deep. So I think, over the long run, the seeds are there for a very vibrant democracy.

REP. WILSON: And even with a government that seems to be one party?

MR. JOHN: Yes, I think it can develop. I mean --

REP. WILSON: You don't --

MR. JOHN: I think it's -- obviously you don't want something that's going to be a one-party democracy ad infinitum.


MR. JOHN: But I think the desire is there to develop a vibrant democracy.

REP. WILSON: And another part of nation-building would be the security forces. Are the security forces being developed?

MR. JOHN: Well, they had been developed and, clearly, not well enough. One problem with the police force, for example, is that -- you know, when I was there in early May, I was talking with some of our U.S. police trainers who were out working, and we had, you know, I think there were more than a dozen nations who had been in training police forces in Timor. And there were all sorts of modalities that they were using. Each nation brings its own policing techniques to it. Well, you really need one nation in the lead, I think, on training police -- or maybe two -- and adhering to one coherent model. And I think something like that would really help East Timor for the long run.

The other question they are going to have to look at is, do you really need a military as well as a police force for a nation that small that does not face an external threat. That's something for the East Timorese to decide.

REP. WILSON: And with the development of the government, the development of security forces, the other leg would be the development of a civil society by way of the economy. What is the status on the development of -- say, the infrastructure of the country, and economy?

MR. JOHN: Well, the one big thing they have going for them on the development of the economy is oil. And there is a lot of offshore oil, and they have a petroleum fund with 350 (million dollars), $400 million in it right now. They have worked to set up the structure of that fund so that they, hopefully, can escape the curse that a lot of other oil-rich countries have had, where you have a lot of money but not a lot of jobs. And there are checks and balances to help with the distribution of those funds for infrastructure improvement. So at least there's a source to go after infrastructure to help create jobs.

But aside from oil, you've got sort of boutique coffee-growing arrangements -- again, not a high employment sector. They do need to develop a structure for growing jobs in the country.

REP. WILSON: And have they adopted laws for a free market economy? What's the status on that?

MR. JOHN: Well, this is where my information is sketchy. It's a relatively free market economy. I can -- we can get more information on that for you, though.

REP. WILSON: And have they encouraged foreign direct investment in the country?

MR. JOHN: Yeah, they do. And for example, the coffee arrangement is free-trade coffee that they sell to Starbucks in the U.S. So they do welcome American companies. They do welcome foreign investors, you know, coming in to develop jobs. It's just a huge challenge for them, with the education problems they face, the health problems, the infrastructure. There's a lot to develop.

REP. WILSON: I recently developed -- visited the former Portuguese colony of Cape Verde and I was startled to see the potential of that country. But there has been a significant relationship maintained with Portugal. Is there any tie of a significant nature back to Portugal?

MR. JOHN: There's a strong tie between East Timor and Portugal. I think Portugal, as based on its pastoral in and East Timor, does want to see East Timor succeed as a nation. The official language, as I noted, of East Timor is Portuguese -- about the only place in the neighborhood where that's true. And you know, there are a lot of nations that do want to see East Timor succeed. And fortunately they're democracies that want to see East Timor succeed.

REP. WILSON: Well, thank you very much for your efforts.

Thank you, Mr. Chairman.

REP. LEACH: Well, let me just say, based on prior comments, that it is perspective which is often difficult to apply to circumstances.

We've had my good friend, Mr. Faleomavaega mention the word "sheriff" and "deputy sheriff" and sometimes the word "policeman" has been used for the United States about policeman for the world. And all I can say is that, whatever terms are used, I think the United States ought to be very clearly appreciative of Australian efforts. They were very impressive and they've been very quick and very stabilizing in a surprisingly unstable situation.

I'm really impressed with the number of people that have fled Dili. One hundred and fifty thousand is about 15 percent of the population.

MR. JOHN: Yes.

REP. LEACH: And that implies internal divisions that are truly stark. And the whole assumption behind the creation of East Timor and the international support for it was that this was a cohesive group of people in contrast with other settings in the immediate area that were of a little different nature. And so the lack of cohesion is rather startling. Then, when we come to understand the political party that is overwhelmingly in the majority status, but the prime minister from that party appears to have put forth a position that is highly contentious and possibly of an anarchist nature, that seems odd as well.

Do you see this internal cohesion breaking down even further, or do you think there is a good prospect that you can -- the country can come back in a way that doesn't result in some sort of civil strife?

MR. JOHN: I think it's going to be a very rocky road ahead over the coming months. Those rifts are not going to be patched very easily. But I mean I'd kind of like to stand back and put a little bit of perspective on it. And it's, as a nation it's only three years old. And I think for everybody to just look at what's happened in the last two or three months and throw up their hands and think that there's been a massive failure here and it's not going to go anywhere is the wrong view.

I think what we do need to look at are the strengths that East Timor has. And I think if you look at the history of East Timor and how the East Timorese have pulled their nation from a colony through the period under Indonesia to now, you know, they are incredibly strong people that have gotten their independence. That bodes very well. The underlying economic factor, oil, bodes very well for them. The -- you know, the strong, deep-rooted belief they have in self- governance and democracy I think bodes very well.

I think that we're going to need sort of the training wheels on the bike, though, a little bit longer than we had thought. There is going to need to be continued -- the U.N. needs to be there with them side by side for a longer period than we thought. But I -- and these rifts might be there for decades, but they can become healthy rifts. I mean, I don't think that a society that has a completely monocular view of the world is necessarily healthy; that, perhaps, the East Timorese can take these difference experiences they bring to the table and turn it into a healthy dynamism. I think that's -- I'd rather take the optimistic view at where East Timor can go with this rich variety they have, rather than the impossibility they have to mend these rifts.

REP. LEACH: Mr. Faleomavaega.

REP. FALEOMAVAEGA: Thank you, Mr. Chairman.

I noted with interest that -- I think it was this past Sunday that -- the foreign minister, Mr. Horta, the Nobel Peace Prize recipient -- has he actually submitted his resignation as the foreign minister?

MR. JOHN: Yes, but he has offered his services and indicated his willingness to stay on in the interim government and beyond if he is asked to do so. So he has remained in the job and has been asked to do so. He is still functioning as the foreign and defense minister.

REP. FALEOMAVAEGA: One of the ironies of a democracy is the fact of here we have the Fretilin, the ruling party -- and I assume that it's members of the ruling party -- it was the will of the people that brought them there in the first place, including Mr. Alkatiri. I mean, this is what democracy is all about. Of course, he made a decision that may run contrary to whatever it was -- the privileges of his 600 employees -- which really precipitated the whole problem here. But do we do because here, now, even President Gusmao is threatening to resign if Alkatiri continues to remain as prime minister? Of course, now Alkatiri intends to resign -- or has he already submitted his resignation?

MR. JOHN: He did submit his resignation and it was accepted by the president. So he is currently the ex-prime minister of East Timor. It's -- yeah, there are a lot of vexing problems, I think, with East Timor. One is, how do you get the electoral system right, and how do you -- how do the East Timorese fix it so that it's a more open and transparent democracy. I think one criticism over the past months -- and it was exhibited in May during the Fretilin Party Congress is that when they were choosing their leader who would take them through the next election -- is that the system was too opaque and too stacked in favor of Prime Minister Alkatiri. That's something that I think the country is going to be looking at very closely -- how they adjust their system to make it more open and accountable.

REP. FALEOMAVAEGA: And is there any indication that President Gusmao plans on calling new elections? I suppose that would be the next clear option that's available -- they'll just have to call new elections for a new parliament.

MR. JOHN: Well, I think he'd -- yeah, he'd be forming an interim government in the next few days and then that interim government would take up that question. But when they would call those remains open. And I think that they would look to the United Nations, perhaps, for assistance in moving that forward.

REP. FALEOMAVAEGA: The chairman had given an indication earlier about our ambassador to the United Nations, Ambassador Bolton's strong view of the United Nations and having peacekeeping forces or whatever involvement the United Nations plans on doing with this. I guess it does come before the Security Council before there is a vote by the General Assembly -- the process at least.

MR. JOHN: Yes.

REP. FALEOMAVAEGA: Do you anticipate that we will be sending U.N. peacekeeping forces or team members that will be advising the national leaders of East Timor to do things peacefully rather than having the presence of military, like we currently have?

MR. JOHN: I -- of course the -- I don't want to prejudge the assessment team's conclusions -- the U.N. assessment team that's out there right now. But my guess is that, you know, the United Nations, and the core group of which we're a member, are going to be looking very seriously at helping the East Timorese with security, at least a policing mission, in East Timor. We're going to be looking at training the police in the longer run, and doing the policing in the shorter run, and also helping them with the electoral process.

REP. FALEOMAVAEGA: I note with interest that East Timor is the poorest of all the Asian countries. Has there been any settlement of the oil fields between Australia and East Timor. I suspect that that's going to be one of their primary sources of --

MR. JOHN: Yes.

REP. FALEOMAVAEGA: -- revenues for the national government needs.

MR. JOHN: Yes, they've -- they have settled the division of offshore oil and, you know, where the money goes. I mean, that's how the East Timorese got that initial tranche of 350 (million dollars) to $400 million. And of course, there will be more on top later.

REP. FALEOMAVAEGA: Being the poorest country in Asia, what's the per capita income of the workers -- of the people there in East Timor? Any --

MR. JOHN: I don't know. Let me see if -- 400 (dollars).

REP. FALEOMAVAEGA: Four hundred dollars per annum?

MR. JOHN: Yeah. So you can see where the $400 million oil fund for a population of 100,000 translates into a significant, hopefully -- an economic infrastructure for the country, if used properly.

REP. FALEOMAVAEGA: This gentleman, Lobato, that was arrested supposedly he had gotten some hit squads going after those who oppose Alkatiri's policies.

Any truth in that -- that there was any conspiracy between him and Prime Minister Alkatiri?

MR. JOHN: Well, yeah, those are the accusations, I think -- that he had -- I believe the accusations in the media, at least, are that he had distributed weapons. But that question I would really leave up to the justice system, either East Timorese or if it's referred to an international justice system.

REP. FALEOMAVAEGA: Please convey my personal regards to Ambassador Rees at the first chance available if he's coming to Washington or --

MR. JOHN: Well, we're in touch daily and, yeah, he's very good. I will.


Thank you, Mr. Chairman.

REP. LEACH: Mr. Wilson.

REP. WILSON: One final bit, and I appreciate your comment that though oil reserves could be a curse -- because it just never ceases to amaze me that -- what I wish for my state, that we had oil, it certainly would increase the per capita income, but it seems like in other countries it just leads to instability, to insurrection, to any number of levels of corruption. What have they organized to provide for the development of that industry and to provide for the benefits to the maximum number of people who live in the country?

MR. JOHN: Well, the good part about what they've organized is it's almost sort of a locked-box type of fund, where the money goes into the fund and cannot be unilaterally distributed by any part of the government. So if the administration, for example, were to want to allocate $30 million for a road infrastructure project in East Timor, that has to be approved by the other branches of the government. So you have a checks and balances system; similarly that you would assume that it's that much more difficult for the money to disappear into -- with corruption.

East Timor has seen the countless examples that other nations have gone through with the oil just not translating into jobs or infrastructure. But I think, because of the difficulties of that locked-box and the steps that you have to go through to distribute the money -- they haven't distributed the money yet -- so it's -- the -- I can't speak for the specific projects that they are going to do because they haven't arrived at those yet.

REP. WILSON: And is the industry state owned? Is it by royalty? Run by private companies or --

MR. JOHN: I believe it's state owned.

REP. WILSON: State owned. Okay. Thank you very much.

REP. LEACH: Thank you. This has been a short hearing, but I think a very helpful one and, just as Mr. Faleomavaega wants to extend his expressions to our American ambassador, I think all of us would like it very clear that, in Washington, we have a great deal of concern for the Timorese people and that is the reason for this hearing. And we have a great deal of hope for a very unifying few years in which the country can come together. And we look for an activist role of the United States and the international organizations.

Thank you, Mr. Secretary.

MR. JOHN: Thank you very much.

Prepared statements (PDFs which open in new browser)

The Honorable James A. Leach, The Honorable Eni F. H. Faleomavaega, Mr. Eric John

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