Subject: IPS: World Bank, E Timorese Differ on Economic Policy

World Bank, East Timorese Differ on Economic Policy

By Bob Burton

CANBERRA, Nov 18 (IPS) - The World Bank mission to East Timor on Thursday released its assessment report on East Timor's reconstruction, one that had involved ''tough discussions'' over economic policy with independence leader Xanana Gusmao.

While Gusmao recently criticised the mission for pushing its own agenda and not properly consulting the East Timorese leadership, the World Bank was at pains to emphasise that it prepared the report after pairing each expert with an East Timorese expert.

In releasing the report, the World Bank country director for East Timor, Klaus Rohland, said the team estimated that a three- year reconstruction programme for East Timor will cost a total of 300 million U.S. dollars.

Rohland said medium-term priorities included restoring basic infrastructure for agricultural production, restoring education, health and banking services and re-establishing a civil service.

Rohland trod carefully when releasing the report, apparently keen on not being perceived as dictating to East Timor what directions it should take.

''The responsibility of the donors is to help the East Timorese without imposing our design on them. It is them they know best,'' he said.

Rohland said that during a four-hour meeting with Gusmao to discuss the report, he had been ''extremely pleased with our work and our cooperation''.

However, under questioning, Rohland conceded there was conflict over economic policy direction. ''We had tough discussions on some issues where they had ideas that we didn't think we should support'', he said.

''For instance in the area of subsidies (for industry development) where we drew on our international experience to explain how subsidies had worked in other countries and how they had failed in most of the countries. There will always be disagreements on the margin but we have that buy in on the main thrust of the report,'' he explained.

The mission's report will be presented to an international donors conference, chaired by the World Bank, on Dec 17 in Toyko.

Rohland said that the Tokyo conference with include the Asian Development Bank, the International Monetary Fund and UN agencies along with donor governments including Japan, former coloniser Portugal, and Australia.

East Timorese leaders and non-government organisations will attend with observer status, he said.

One of the seven-member East Timorese Transitional Council, Joao Carrascalao, acknowledges there will be ''very difficult days ahead'' for the territory on the way to independence.

''We will have a transitional period in establishing an independent East Timor that will be very, very difficult. It is a challenge we accept. We know that in the first years East Timor will be reliant on international assistance,'' he pointed out.

''The main medium-term challenge will be education. The majority of the people of East Timor are illiterate and we know that our future as a nation will rely on well educated people,'' Carrascalao added.

''We also know that having an empty stomach is not the best situation for people to learn. This is why our second priority is developing agricultural capacity,'' he said.

The East Timorese' first goal is achieving self-sufficiency in food and then hopefully exporting food to places like Darwin in northern Australia, he continued.

With an eye on the booming tourism industry in the nearby Indonesian province of Bali, Carrascalao says the development of a ''quality tourism industry'' will be critical to the economy.

''While tourism will give us some revenue, agriculture will provide for rural development which is more important than the development of natural resources,,'' he says.

The World Bank is not the only organisation that has come in for criticism from Gusmao.

Earlier this week he criticised international aid organisations for not consulting with the National Council for Timorese Resistance (CNRT), the political arm of East Timor's independence movement.

''We are not informed of their meetings, which are run in a clandestine way,'' Gusmao told reporters. ''It is now clear there must be cooperation with the CNRT,'' he said.

The executive director of the Australian Council for Overseas Aid, Janet Hunt, says she understands Gusmao's frustration with the international aid operation.

''The CNRT have not been given the support they need. They were not allocated decent office space in Dili by the UN, nor do they have the transport and communications equipment adequate to the tasks they face,'' she said.

''If the international community is serious about consulting with Timorese leaders as the reconstruction effort goes forward, they have to given them the means to operate,'' she said.

East Timor's Catholic leader, Bishop Carlos Belo, has echoed Gusmao's concerns. He warned there was a danger that without consultation with local leaders, the UN mission to rebuild East Timor could benefit foreign interests most and not the people in remote regions of East Timor.

Already, the Australian government is working hard to make sure Australian business wins a major slice of the reconstruction work in East Timor.

In October, Australian government agencies sponsored a major conference -- without a single East Timorese speaker -- to advise business on how to win reconstruction contracts in East Timor.

Already some 4,000 companies, including 2,600 from the US and 90 from Australia, have registered as possible contractors with the United Nations.

''Use East Timor to break into the bigger, lucrative multilateral procurement market. This is the single best opportunity to position your company in this market,'' Australia's trade commissioner to Washington, Alistair Nicholas, told the 400- strong audience.

While East Timorese struggle to get basic food and shelter organised before the imminent arrival of the monsoon season, Nicholas suggested that business could do well providing a wide range of services. Said the trade official: ''Don't forget the Coke and pizza market.'' (END/IPS/ap-dv-ip/bb/js/99)

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