Rebuilding East Timor

The Canberra Times
December 28, 2007

Rebuilding East Timor

By Jill Jolliffe

Four months after the Parliamentary Majority Alliance (AMP)
Government of Prime Minister Xanana Gusmao took power, people are
asking whether it can really turn their fortunes around next year.
About 100,000 people displaced by violence last year remain in tent
settlements and the capital has endured months of enervating power
cuts since it came to office.

More worrying for many is the fear of an insurgency led by renegade
major Alfredo Reinado, who recently staged a military parade of
several hundred armed followers in the town of Gleno, despite a
United Nations demand that he be put on trial.

Gusmao's multi-party coalition was elected in July and sworn into
office on August 8. Voters saw it as an alternative to authoritarian
rule by Fretilin, which they blamed for last year's violence. Today
discontent is not confined to Fretilin supporters: AMP backers are
also doubting the new Government's ability to deliver.

The coalition hopes that its ambitious budget for next year will cure
many of the problems affecting average Timorese and buy it time to
deal with the political problems.

In the hot seat is Emilia Pires, the country's feisty new Finance
Minister, who presented the $US348.1million ($A400million) budget,
the largest since independence.

She is known as a tough dealer who has survived considerable
hardship. Her large family has a reputation for brilliance, and
brother Alfredo is State Secretary for Natural Resources. One of five
children, Pires was raised in the Timorese countryside. She was
precociously bright, perhaps making up for a congenital bone disorder.

When civil war broke out in 1975, the family was evacuated to
Australia. The memory is still vivid. ''I was 14, and we had to get
through a park where fighting was very strong,'' she recalled,
''There was a Norwegian freighter evacuating people, but it couldn't
dock in the harbour, so we had to board it on the high seas.''

A landing craft ferried their crowd of anguished refugees. ''We had
to climb a ladder onto it,'' she recalls, ''I am handicapped, and my
sister couldn't walk. I don't know how I got on, it was as in a
dream.'' The future minister spent the following years in Melbourne
as a refugee, making up for this poor start in life with dedicated
study and an iron will to succeed. She earned a mathematics degree
from Latrobe University and undertook postgraduate studies in
government law at Melbourne. At 22 she began work as a junior public
servant with the Victorian government, where she spent most of her
early working years.

In 1999 the UN advertised for qualified East Timorese to help rebuild
the country. She was hired to formulate the first Timorese National
Development Plan, assisted by UN experts, and also wrote an economic
program known as Vision 2020. Following this success she had two
years as a World Bank adviser to the Palestinian Authority, and found
time in 2004 to do a masters degree at the London School of Economics.

When Gusmao was planning a government in the lead-up to July
elections, she was the obvious choice to run the economy in the
Timorese political world she is the one figure with an intellect to
match that of ex-prime minister Mari Alkatiri. A key flaw of his
government was that it regularly failed to implement its budgets, and
international donors became concerned that unused funds were not not
filtering down to the people.

Next year's budget is designed to reconcile warring factions,
eliminate bureaucracy and offer economic relief to the poor. It
abolishes income tax for low- to medium-earning Timorese, provides
tax concessions for foreign investors, gives $US16 million in
pensions to veterans of the liberation war against Indonesia and sets
up a pension scheme for the elderly. There is priority funding to
streamline the public service, ending political appointments in
favour of a merit-based system, with training for those wishing to
pursue career opportunities.

Pires bridles at the suggestion that this is a simple fix to
artificially stimulate the economy through cash grants. ''It's not so
radical,'' she said, ''but an interim measure to move the economy. It
had stagnated and we had to do something to move it.'' She said she
had warned the private sector that the policy ''won't last forever'',
but is a result of the peak in oil revenues that can be used to build
other sectors of the economy.

Former Fretilin minister Arsenio Bano sees it differently. He
describes it is a ''honeymoon budget'' for the AMP, designed ''to
make a group of people happy''. ''Of course, Fretilin can't disagree
with that but we do question the capacity of the Government to
deliver. It has promised a lot of things,'' he said.

He said the money for war veterans was admirable, but asked whether
the Government planned to increase the sum next year. ''Old-age
pensions are a good idea, but are we sure they are sustainable?''
Pires is sticking to her guns. She said work had been delayed by
Fretilin's failure to hand over power in an orderly fashion. She
alleged that documents were destroyed or removed in all but one
ministry, including lists of refugee figures.

She said that although the Government had not succeeded in persuading
camp-dwellers to go home, an appointed task force had had a
breakthrough: 68 families from one of the biggest Dili camps had
agreed to move into new houses, and others are expected to follow.
Dili's power supply was restored to normal by mid-December, ending
Fretilin criticism that the AMP couldn't even keep the lights on, and
President Jose Ramos Horta and Prime Minister Gusmao continue
negotiations with Reinado for his surrender.

The security situation improved this year with the conviction of
various perpetrators of last year's violence, as demanded by the UN.
These include ex-minister Rogerio Lobato, sentenced to 7 1/2 years on
homicide and gun-dealing charges, senior police officer Abilio
Mesquita sentenced to four years for abuse of authority and
disturbing public order and four government soldiers receiving terms
of up to 12 years for the massacre of eight unarmed policemen and the
wounding of 25 others.

Life has largely returned to normal in Dili and tensions should be
further alleviated when the cash from the budget starts flowing, but
uncertainty continues. Taxi driver Filomeno Belo thinks long and hard
about the question of whether the AMP can deliver on its promises.
''I'm not optimistic. If we want prosperity and development the
security issues have to be solved,'' he finally replies. ''While
Alfredo is still marching around in the mountains there's a problem.''

Jill Jolliffe is a special correspondent for The Canberra Times.