Subject: Boomberg.Com: East Timor Considers Giving Financial Aid to Dismissed Soldiers

By Ed Johnson

Sept. 27 (Bloomberg) -- East Timor's Prime Minister Jose Ramos-Horta said his government is considering financial aid for 600 soldiers dismissed earlier this year, an event that triggered civil unrest and the deployment of international peacekeepers.

The troops have ``avoided being drawn into political demonstrations,'' since the unrest, said Ramos-Horta, following talks yesterday with Gastao Salsinha, the leader of a group of soldiers who deserted the army in March claiming discrimination.

``The ministry of finance is looking into how financial assistance might be provided,'' Ramos-Horta said, according to a statement e-mailed from his office.

Fighting erupted between factions of the security forces in the former Portuguese colony, after then Prime Minister Mari Alkatiri dismissed a third of the country's armed forces in March for desertion. The violence escalated into clashes between armed gangs, killing 37 people and forcing 155,000 people, or 15 percent of the population, from their homes.

At the request of Alkatiri's government, 2,500 peacekeepers from Australia, New Zealand, Portugal and Malaysia were deployed to the Southeast Asian nation in May.

Ramos-Horta, a Nobel Peace Prize winner and former foreign minister, became prime minister after Alkatiri resigned in June. He met Salsinha and 100 former soldiers in the town of Gleno, about 50 kilometers (31 miles) south of the capital, Dili, according to the statement from the prime minister's office.

The town ``appears calm and tension seems to have been reduced,'' the prime minister added.

Rebel Soldiers

Rebel soldiers, including Major Alfredo Reinado, blamed Alkatiri for the unrest, saying he created divisions between ethnic groups within the army. Reinado, whose militiamen refused to lay down their arms after being dismissed, remains on the run after escaping from a Dili jail on Aug. 31.

The country of about 1 million people, also known as Timor- Leste, became independent in May 2002. East Timor voted for independence in 1999 following a 24-year occupation by Indonesia.

The United Nations has been operating in East Timor, which lies about 500 kilometers (310 miles) north of Australia, since 1999, helping organize elections and the creation of government institutions. The UN Security Council last month unanimously approved a new peacekeeping mission of as many as 1,608 police for East Timor as the country prepares for elections next year.

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