Home > South-East Asia >> East Timor

East Timor News Digest 6 – June 1-30, 2013

Labour & migrant workers

Environment & natural disasters Sexual & domestic violence Sex workers & prostitution Social security & unemployment Agriculture & food security Ethnic & communal conflicts Development & infrastructure Police & law enforcement Border & security issues Foreign affairs & trade Mining & energy Economy & investment Analysis & opinion

Labour & migrant workers

Timor Leste law bans child labour

East Timor Law and Justice Bulletin - June 20, 2013

The State Secretary for Professional Training and Employment (SEFOPE), Elidio Ximenes said the country's law banned children from working and said they had rights to get access to education and proper health.

According to Televizaun Timor Leste on 13 June 2013, Ximenes made the comments in relation to the commemoration of the International Day against Child Labor.

He confirmed that in 2004 the Government of Timor-Leste allocated some of the state budget for combating child labor in the country.

"As we have seen that some of the children are selling eggs on the road and helping parents to collect sands. This is actually banned by the law of the country," he said.

Environment & natural disasters

Bolstering disaster risk reduction in Timor-Leste

IRIN - June 25, 2013

Dili – Timor-Leste needs to do more at the national and district levels to boost disaster preparedness, especially in rural areas, say experts.

Each year, communities face an increasing number of natural hazards with 185 floods recorded since 2010, compared to 32 between 2001 to 2009, according to the National Disaster Management Directorate (NDMD).

Over 70 percent of the country's 1.1 million people live in rural areas. In June, more than 1,850 people in the half-island nation were affected by floods in five of the countries13 districts, the NDMD reported.

"The country is not well prepared to cope and respond to any kind of large-scale natural disaster," Geraldine Zwack, country director for CARE International, told IRIN in the capital Dili.

"If disaster preparedness starts at the community level then the impact on the district is less. It reduces the burden on the government during an emergency response and increases the communities' ability to bounce back and recover more quickly."

Aid agencies say an increased focus on disaster preparedness at the national government level is needed, particularly in addressing infrastructure, food security and the livelihoods of poor rural communities who are vulnerable to disasters.

"The country is regularly affected by disasters and the majority of these are small local ones, such as floods and landslides," said Pedruco Capelao, education in emergencies manager at Save the Children.

"There is a need to improve disaster response mechanisms at national and sub-national level, and ensure emergency supplies are stockpiled to allow communities to respond to any disaster."

According to Maplecroft's annual Natural Hazard Risk Atlas (2013), which evaluates the exposure and resilience of 197 countries to 12 natural hazards, Timor-Leste is at extreme risk when natural disasters strike, due to its lack of coping mechanisms, and is ranked six and 34 for infrastructure fragility and community vulnerability, respectively. The overall socioeconomic resilience ranking for Timor-Leste is 32.

The Assessment Capacities Project, implemented by Help Age International, Merlin and the Norwegian Refugee Council, is working to improve the assessment of needs in complex emergencies. In September 2012 a Project report said "urban areas are unprepared for possible disasters" and had particular concern about a "lack of earthquake resistant structures in Dili or district capitals".

While Timor-Leste is prone to severe and recurrent drought, flooding and landslides, other risks include tropical cyclones, earthquakes and tsunamis, the report noted.

"It is a disaster for the people here, who mostly rely on agriculture for survival, when a flood, landslide or drought hits. When the farmers' crops are completely washed away, they are left with nothing. The government must work to prepare these communities to respond to these challenges and build infrastructure and resilience to assist people to cope with such disaster," said Oxfam country director Kunhali Muttaje.

"Most of the government focus is on emergency response and only a small proportion of the budget is directed towards disaster risk reduction (DRR) activities," emergencies and DRR project officer at Save the Children Jack French told IRIN, noting that "there is a need for the government to create a policy or legal framework and develop a strategic plan for DRR which would allow the ministries and the NDMD to focus more on disaster preparedness at the district level."

Climate change impact

With long-term average temperatures and sea levels rising over the past few decades, climate scientists are warning that things could get worse.

"Many regions and industries are not well adapted to the current range of climate variability, with impacts on agriculture and infrastructure from droughts and floods," said Michael Grose, a research scientist for the Pacific-Australia Climate Change Science and Adaptation Planning Program (PACCSAP), within the Commonwealth Scientific and Industrial Research Organisation, a scientific research agency based in Australia.

In terms of climate change, "it is likely that sea level rise has influenced the impact of coastal inundation events in vulnerable coastal regions. Heavy rainfalls that may have some influence from human-driven climate change affect the incidence of river floods," Grose said.

Since 1993, the rise in sea levels globally has increased more rapidly, at 3.2 (+/-0.4) mm/year, compared to 1.7 (+/- 0.2) mm/year in previous years (recorded since 1880), according to the report Climate Change in the Pacific: Scientific Assessment and New Research (Australian Bureau of Meteorology and CSIRO, 2011).

However, in Timor-Leste the rate is higher than the global average – over 7 mm/year between 1993 and 2009.

"In Timor-Leste, there is a need to develop systems, procedures and infrastructure to help vulnerable communities adapt. People are not ready to cope with the current climate conditions, and a warming climate will only make these impacts harder to deal with as the frequency or intensity of disasters increases," said Grose.

The government says it has the capacity to respond to small, localized disasters and a contingency plan in place, initially prepared in 2006.

"Programmes focus on local level capacity building, including improving infrastructure, relocation of vulnerable groups in risk areas, hazard and risk assessment and mapping, and use of local and indigenous knowledge to strengthen the communities' coping mechanisms," NDMD director Francisco do Rosario told IRIN.

According to NDMD, legislation is needed to promote coordination between government sectors and the implementation of DRR programmes.

"Disaster preparedness is vital for the country's ongoing stability and continued economic development," said UN Development Programme (UNDP) country director Mikiko Tanaka.

"As the government has acknowledged, increasing climate variability as well as the increasing intensity of extreme events will require greater institutional efforts as well as financial investment to improve resilience, especially at the community level."

Sexual & domestic violence

Sexual abuse victims struggle to get birth certificates

The Dili Weekly - June 4, 2013

Children born as a result of sexual abuse by the Indonesian military during the occupation currently have difficulty obtaining official birth certificates and according to the Executive Director of HAK, this is discrimination

The Executive Director of HAK Rogerio Vicente Viegas said when the Indonesian military invaded Timor-Leste, a lot of Timorese women were forced to become their wives and finally their children are currently finding it difficult to access RDTL birth certificates.

"We cannot discriminate against our sisters that in the past had children from the military, because this is a consequence of war and our law does not facilitate access for victims to official documents," said the Executive Director recently in Farol, Dili.

He added they cannot access official documents like electoral cards, RDTL certificates, passports and identity cards because they do not have a baptism certificate and or their parents wedding certificate.

He also recommended the Council of Ministers should develop a policy to respond to these concerns or create a decree law about civil registrations that recognise situations like these.

"This happened not because the victims wanted it but because they were forced," said the Director of HAK. He added HAK would continue to advocate for the government, especially the Ministry of Justice, to look into the issue so they can have rights like other citizens, as this issue is a big concern for victims.

In relation to this issue, the Director of National Civil Registration Dili District, Vitor da Costa Neto said although the documents (baptism certificate, electoral card, parents electoral card or parents wedding certificate) were part of the criteria to get official documents, there were exceptions.

"All people have different conditions, that's why for children born from militaries that invaded Timor-Leste and also those who's fathers do not take responsibility, we will have a declaration that applicants can fill out about the identify of the mother or father to get a RDTL certificate," said Director Neto.

Director Neto said they would require people to attach the wedding certificate, but for those with unmarried parents or with single mothers, there was a declaration for fathers that applicants could fill out to represent their parents' identity to pass on to the registration list.

However he said if a person has their fathers name on their baptism certificate, there's an obligation to put the father's name on the RDTL certificate even if the father doesn't take responsibility.

Sex workers & prostitution

GMPTL: Timor not ready to localize prostitution

The Dili Weekly - June 21, 2013

According to the President of the Parliamentary Women's Group of Timor- Leste, MP Josefa Alvares Soares, now is not the time to localize prostitution to one place because society and the church are strongly against this behaviour.

The Parliamentary Women's Group of Timor-Leste (GMPTL) President said they needed to think about it carefully because apart from it being against the teachings of the Catholic religion, it is also not suitable with Timorese culture.

"It's not time to localize them to a special place with doctors to control them," said GMPTL President Josefa Alvares Soares in National Parliament.

According to her, all people, both men and women, must use their conscience to avoid prostitution because the church doesn't allow it and it's not suitable with Timorese culture.

Meanwhile the Executive Director for the Women's Network (Rede Feto) Yasinta Luzinha said in order to localize prostitution to one place there needed to be deeper discussion and consultation, so everyone can share their opinions about the issue.

As an organization that deals with women's issues, Rede Feto is concerned about the health and security of prostitutes, because they take part in this activity without any controls.

"As a women's organization we defend and promote the rights or women, women who are the victims of violence and women who take part in prostitution, we defend them when their rights are violated," said Director Luzinha.

She said the draft Human Trafficking Law also talks about prostitution but it is against their human rights to criminalize prostitution because elsewhere in the world the activity is considered a profession.

She said people have rights "but it depends also on the nations point of view." Rede Feto called on the police to carry out good investigations to look for those who organize this activity.

Social security & unemployment

MPs raise concerns about unemployment

The Dili Weekly - June 4, 2013

Members of Parliament are concerned because the number of people unemployed within the country continues to increase every year.

MP Maria Angelica Rangel said currently a lot of people, especially those who study at universities in Dili and overseas, can't find work when they finish

"In some ministries they only use people from overseas as their secretaries, this is a question for us, as it means Timorese are unable to," said MP Rangel in National Parliament recently.

Meanwhile, Secretary Of State For The Vocational Training Policy and Unemployment, (SEFOPE), Ilidio Ximens da Costa said unemployment doesn't only exist in Timor-Leste, but in almost all countries.

He said the current government has a policy to give training to young people to reduce the unemployment rate, which is increasing every year.

"The cooperation of the private sector is also very important, rather than just waiting for government projects, they can also create programs and projects in order to ease unemployment," said the Secretary of State.

The government also has an employment program that can help young people and the community in general find a job.

"Rural employment programs like the $3 a day program can create temporary work for our parents in remote areas, with the objective of involving the community in their own development, which is very important," said the Secretary of State.

He added the data about unemployment is not fixed, therefore this year they will create a good database system. "We need to fix this system so that we can hold a clear census," he said.

Agriculture & food security

Timor-Leste farmers need seed support

IRIN - June 10, 2013

Dili – An increase in new, higher-yield seed varieties is helping some rural communities produce more food in Timor-Leste, but greater support is still needed, aid agencies say.

"The current need to import seeds to meet the demand causes many issues for farmers and costs more than producing seed locally. Seed imported from Indonesia is often of poor quality, there are logistical issues in reaching the remote communities, and often the seed arrives late, which impacts on the time of planting that is critical," John Dalton, team leader of Seeds of Life, a programme within the Timor-Leste Ministry of Agriculture and Fisheries, told IRIN.

Seeds of Life works to identify high-yield varieties of the country's five staple crops – maize, rice, cassava, sweet potato and peanuts – that are best suited to the country's climate. It also works to establish a national seed network, with seeds procured locally in Timor-Leste, to keep local farmers supplied.

Higher yield seeds introduced

Food security remains a challenge in Timor-Leste, where 80 percent of the country's 1.1 million people – and 90 percent of the rural poor – depend on subsistence agriculture for their livelihood, according to the World Food Programme (WFP).

"Based on more than 10 years' research, the programme aims to not only identify the varieties that will produce the highest yield, but also to help farmers establish systems and networks for the production and storage of seed from those crops in the future," Dalton explained.

Currently, the newly introduced seed varieties reach 27,493 farmers. By March 2014, they aim to reach more than 50,000 farmers, almost half of all farmers in Timor-Leste.

WFP says about one-third of the population regularly experiences food shortages, notably towards the end of the two lean seasons between harvests, October to November and February to March.

Each year Timor Leste needs 211 metric tons of rice seed. Two years ago, local rice seed production met 24 percent of the total demand. Today, it meets 61 percent of the total, meaning farmers are importing less seed. Local maize seed has also increased from 6 to 39 percent of the 500 metric tons needed annually.

Support for farmers

But new seed varieties are only one part of the response needed to improve long-term food security in Timor-Leste, which only gained independence 11 years ago, experts say.

"Having good seeds to plant with a reliable seed storage system owned by the community is essential. But more support is required for communities to grow healthy, nutritious food and improve food security long-term," Kunhali Muttaje, country director for Oxfam in the capital Dili, said.

"Farmers require assistance to access arable land in which to grow crops, and to cope with the impacts of climate change. Additional challenges include land ownership and documentation, access to market and credit facilities, and support for training."

Moreover, without addressing social, economic and gender issues, sustainable food security will not be achieved, agencies say.

"It's important to assist communities to diversify the ways of earning a living to improve food security, such as increasing fish production and diversifying food sources. The capacity to store food needs to improve to prevent food being destroyed by insects. Gender inequalities that impact on access to food must also be addressed to improve nutrition," Mirko Gamez Arias, a programme manager at CARE, said.

Traditional vs modern methods Permatil, a local permaculture agency, is concerned new seed varieties will not address food security issues over the long term, noting traditional agricultural techniques and knowledge are also need to support sustainable farming.

"These new seed varieties take time to adapt with the local environment, and, culturally, farmers need to learn new ways of farming to adapt to the use of these new seeds. Mostly new seed varieties succeed in demonstration farms, but fail in the farmers' fields," explained Ego Lemos, head of Permatil and an environmentalist.

Lemos says to improve food security, "there is a need to diversify food crops and eating patterns", and that policies should not "undermine traditional knowledge of the people in relation to sustainable farming, but instead respect and give more power to farmers to maintain their land, seeds, water and local wisdoms."

He added, "Traditionally, Timorese used to eat different varieties of food crops that were grown in different seasons and based on this climate, including different grains, tubers, beans, vegetables, and protein from animals. But today Timorese eat less variety in food crops and, moreover, rice has become the main food staple. This has resulted in 90 percent of food consumption in Timor-Leste being imported," added Lemos.

However, according to Buddhi Kunwar, a seed production advisor at Seeds of Life, "When farmers change from using the traditional maize seeds to the higher yield variety, their production increases by up to 50 percent. Gradually, the number of months that communities are food insecure is reducing because it only takes half the time for farmers to produce the same amount of food." (ch/ds/rz)

[This report does not necessarily reflect the views of the United Nations]

Ethnic & communal conflicts

Timor-Leste promotes traditional conflict resolution

IRIN - June 7, 2013

Dili – 'Tara bandu', a traditional form of conflict resolution, can play a bigger role in mitigating conflict in Timor-Leste at the community level, local leaders and experts say.

Under tara bandu – oath ceremonies – traditional laws and rituals help regulate relations between people and rival groups.

Timor-Leste, home to 1.1 million people, was a former Portuguese colony before it was occupied by Indonesia; it achieved independence only 11 years ago.

"When conflict is monitored at [the] community level and causes [are] addressed at these early stages, it can prevent an escalation of small issues into more widespread violence, such as the 2006 riots," Sarah Dewhurst, an advisor from the local NGO Belun told IRIN. Belun is working with Columbia University's Center for International Conflict Resolution on conflict prevention in the country.

In 2006, the nation experienced widespread riots and conflict due to dissent within the army, which resulted in military intervention. More than 100,000 people were displaced following violence between gangs, rival martial arts groups, the police and the army, many of whom sought protection in makeshift camps. Localized disputes and conflicts over land and resources continue to this day.

Recent monitoring through Belun's Early Response (EWER) programme – established to prevent an escalation of violence at the national and community levels – reveals local and international organizations are increasingly supporting tara bandu to address sources of conflict within the community.

With the UN Peacekeeping Mission in Timor-Leste (UNMIT) gone – it departed in December 2012,experts are saying early monitoring of conflict drivers at the community level can play a significant role in securing peace and stability, allowing for EWER system research and advocacy for government- led policy reform or locally-driven conflict prevention activities, Dewhurst said.

The early response system is comprised of a network of more than 100 participants in 43 sub-districts. It was gradually rolled out between 2009 and 2012, and aims to scale up to reach all 65 sub-districts in the country.

"Early warning system monitoring has come under some criticism in the past," Dewhurst said, adding that earlier attempts had failed to involve communities and stakeholders at the national level. EWER does involve communities and national stakeholders, which has been key to its success.

Tara bandu ceremonies

Communities are keen to promote tara bandu, as well as to establish community dialogues and seminars.

Residents see tara bandu as a public form of community consultation, which is particularly important in addressing civil conflict cases; crime cases are not addressed under the practice.

At a tara bandu ceremony, villagers will typically come together for dance, prayer, speeches and the sacrifice of an animal, followed by a communal pledge to stop using violence or to stop occupying others' land, while at the same time agreeing to a penalty to be paid for the dispute. The penalty might include money, animals or materials. Passed on by elders, tara bandu is common in Timor-Leste, but varies between communities and has never been incorporated into the formal legal system.

The ceremonies are already paying dividends, with marked improvement in the resolution of conflicts caused by land disputes, natural resource management, family arguments and alcohol-fuelled violence.

According to EWER, there has been a decrease in the number of violent incidences reported by the early warning system in 2013, with 43, 45 and 38 incidents reported in February, March and April, respectively. This compares to 72 incidents per month on average in 2012.

On 24 May, Timor-Leste President Taur Matan Ruak discussed in parliament the possibility of incorporating these cultural resolution practices into the formal legal system.

"Tara bandu allows resolution to take place with the family in the 'suco' [an area within a sub-district]. Sometimes families do not want to involve the police if it's not a huge problem; tara bandu provides this option," said Jose Smith, the sub-district administrator in Vera Cruz, within the capital, Dili.

Fernando Da Costa, a programme coordinator at Belun, said communities prefer a traditional justice approach as it can be faster in resolving their problems.

Still, some cases must be referred to the courts, including incidents of domestic violence, which was officially criminalized in 2010.

Combined approach

Jose Belo, head of crisis prevention and recovery unit at the UN Development Programme (UNDP) in Timor-Leste, believes traditional practices play an "important role in communities" but they are not a solution for all.

"Tara bandu is one tool that can be used by communities, but it's not a stand-alone means to respond to conflict. We work with the Ministry of Social Solidarity to build dialogue and mediation processes within the community and train community leaders; it's important to combine both modern and traditional mechanisms when working towards conflict resolution," Belo said. (ch/ds/rz)

Development & infrastructure

TLPDM: Aid effectiveness needs to improve in Timor-Leste

The Dili Weekly - June 25, 2013

More rigorous oversight of development projects is needed to improve aid effectiveness in Timor-Leste, according to the consensus reached following the annual Timor-Leste Development Partners Meeting in Dili.

The annual two-day conference was held to coordinate the direction of development assistance in Timor-Leste, which contributed $213.9 million to the country last year.

At the TLDPM, development partners and the Timorese government agreed to set up new systems to monitor development projects in order to make aid more effective. Some of the new mechanisms include annual action plans for each sector and quarterly meetings on progress for stakeholders in each sector.

The meeting also discussed the challenges facing development in Timor- Leste, with concerns raised about the poor quality of education, the weak justice system and lack of human resources within government institutions.

Prime Minister Xanana Gusmao said there was now a strong commitment from development partners to achieving goals in the government's 2010 Strategic Development Plan. "The challenges to development can be overcome if we work together responsibly and with strong commitment," he said.

European Commission Director Gerhard Sabathil called on the Timorese government to give ministries enough resources to contribute to quarterly meetings.

"There needs to be a greater understanding that coordination is a resource intensive undertaking, it cannot be effective unless adequate human resources are actually committed," he said. Dr Sabathil also called on each ministry to create their own capacity building plans so donors can support them better.

Head of AusAID Vincent Ashcroft said Timor had made a lot of progress, especially in the area of economic growth, but said it could take a long time for these benefits to reach people.

"Growth itself will take a long time to make a difference to the lives of poor people and growth as a measure doesn't tell us much about inequality or people's lives."

European Union pays for repair and maintenance of roads in East Timor

Macauhub - June 25, 2013

The European Union plans to donate 20.5 million euros to Timor-Leste (East Timor) to repair and maintain roads in three districts of the country, under the terms of an agreement signed Monday in Dili.

"With this district road project and the existing rural road project, the European Union is contributing to improving 218 kilometres of roads in the country," said Dick Meganck, the director of the EU directorate-general for development and cooperation for Asia, Central Asia, the Middle East/Gulf and the Pacific.

The programme for district road repair and maintenance complements the EU's rural development programme launched in 2011 and expected to cost 11 million euros.

Cited by Portuguese news agency Lusa, Dick Meganck also said that construction of roads would drive job creation, would have a positive impact on living conditions and was essential for development of the agricultural sector, particularly the coffee industry. As a result of this it will also increase East Timor's exports.

The East Timor Deputy Foreign Affairs and Cooperation Minister, Constbncio da Conceicao Pinto, said that the EU's financial support since the country's independence, on 20 May, 2002, totalled over 200 million euros. (macauhub)

Police & law enforcement

Police officer imprisoned for 16 years for killing student

East Timor Law and Justice Bulletin - June 28, 2013

The Dili District Court (TDD) has sentenced police officer Mariano da Silva to 16 years jail after finding him guilty of shooting dead Armindo Pereira soares in Hera on June 16, 2012.

The judge, Antonio Helder, read out the sentence, saying the Dili District Court had made its decision based on evidence and eyewitness testimony. Therefore, the Court condemned Mariano Da silva to 16 years of imprisonment.

The Court has made its decision but according to the existing law there is a period within which an appeal may be lodged (15 days).

Armindo Pereira was a student at the University of Dili who was shot and killed by the police officer in Hera after violence broke out following a political statement made by Prime Minister Xanana Gusmao's CNRT party members during its national conference to form the new government last year following elections.

Investigation underway into PNTL guns

The Dili Weekly - June 25, 2013

Fundasaun Mahein has raised questions about the process of purchasing guns for the PNTL from Indonesia last year.

The organization Fundasaun Mahein has recommended that Parliamentary Commission B demand the government create an investigative commission to research the PNTL's purchase of guns last year.

The Acting Director of Fundasaun Mahein Joao Almeida Fernandes raised this issue because the Council of Minister hasn't approved the process of introducing these guns but they already have the guns.

"The General Commander of the PNTL announced publically that the PM2-V1 guns are already in Timor-Leste," said FM Acting Director Fernandes recently in Balide, Dili. He said 75 of the PM2-V1 guns with the serial number 0001-00075 were purchased in Indonesia, with the PNTL to be the first in the world to use them.

"The National Parliament needs to demand the government quickly create an investigative commission to look into the guns, which were introduced without a transparent process at the beginning of 2013," said the FM Acting Director.

PNTL Deputy Commander Alfonso de Jesus refused to comment on the purchase of the guns.

President of Commission B (National Security, Defence and Foreign Affair) MP Maria Lurdes Bessa said the commission received a report from FM about the issue and they were currently concentrating on the issue.

"We do ask them to make an investigation team and that is underway, and we cannot publicize everything but the process is ongoing," said the Commission B President.

The commission also has called the PNTL General Commander to go to the plenary to explain the accusations about the guns. "We ask for an investigation because we have doubts about the process of buying those guns," said MP Bessa.

Secretary of State for Security Francisco da Costa Guterres said an investigation was underway into the issue.

Police and military must respect rule of law, says Lere

East Timor Law and Justice Bulletin - June 20, 2013

The Timor-Leste Defence Force Chief, Major General Lere Anan Timur, has called on the defence and security institutions in the country to obey by the country's rule of law following a spate of cases involving police personnel taking the rule into their own hands.

Lere singled out the case of the alleged killing by two policemen of university student, Armindo Pereira, in Hera last year, saying that he strongly advised the Police Superintendent Chief, Pedro Belo, to respect the decision of the court.

Pedro continues to deny his police had any involvement in the killing despite a 12-25 year sentence being handed down from the court.

"Each of us have our own in situation and our work. Truly the police should not go against politics. Also, the military must not be involved in politics."

"If the politicians criticises me I have to stay silent and listen; looking for a way to find a solution," he told Independente.

Parliament orders review of excessive force by police after attack on MP

East Timor Law and Justice Bulletin - June 7, 2013

The National Parliament of East Timor has voted in favour of ordering a review of excessive use of force within the national police force after a violent attack on a youth and member of Parliament last Friday.

Fretilin MP Joaquim dos Santos announced the move yesterday after receiving numerous conflicting responses from the National Police of Timor-Leste (PNTL) over the case of four policemen attacking a youth from Oecusse and MP Manuel de Castro.

"I think we need a resolution to help the investigation process run properly because we have a number of concerns about PNTL including lack of professionalism, poor transparency in its promotion system and uniform,"

"My preoccupation is the secretary state for security who has assumed his function for two terms but in that time there has been no change in the police institution," he said.

Deputy PM confuses military and police role as violence continues in Dili

East Timor Law Journal Bulletin - June 2, 2013

According to an English translation of a report by newspaper Independente, the Deputy Prime Minister of East Timor, Fernando Lasama Araujo, has appealed to both the police and military forces to arrest citizens who are the "masterminds" of crime in the country.

Independente apparently reported on 31 May that Lasama warned young people who wanted to engage in conflict in suburbs, especially in the capital of Dili, that both the police and the military will arrest those who are behind the problem.

"I am calling on F-FDTL and PNTL to capture people who want to create problems in the country," Lasama said.

He added areas in which there is continuing violent conflict are the capital's suburbs of Comoro, Aimutin, Beto Barat, and Beto Tasi. He terefore called on the military (F-FDTL) and police (PNTL) to maintain security in these areas as it would impact the security situation in the capital of Dili.

On the same day, an English translation of a report by newspaper Suara Timor Loro Sae, Lasama was particularly referencing acts of violence which continued to happen in Comoro.

"To the young people who continue creating problems in the country, especially in the area of Comoro, the police should capture and knock them down as they always get involved in problems," he said.

A personal account of a drive through Dili at night recounts what happened when two people were driving from their home to another house for a birthday party last Thursday 30 May, the day before the comments by Lasmama were reported.

According to this account, as they both drove towards Dili, and just as they passed the old Comoro bridge, they saw a huge number of kids throwing stones and carrying machetes chasing one another. The person stopped the vehicle they were in and gave signals to other vehicles behind to slow down and make a U- turn to avoid being stoned.

After returning home, kids were heard running up the street in which the person lived, dogs were "barking like crazy" and there were gunshots; the latter being probably from the police who had attended at the scene of the conflict.

Apart from the distressing incidents of violence involving young people on the streets of Dili at night and the problems this causes for security and safety, the calls from the country's leaders for the military to intervene are entirely inappropriate as they confuse the roles of the military and the police and this has grave implications for the constitutional rule of law in East Timor.

Border & security issues

Timor Leste, Indonesia to cooperate on border security

Jakarta Post - June 20, 2013

Jakarta – Belu Deputy Regent Lodovikus Taolin said that Indonesia and Timor Leste would work to uphold law enforcement along the border of the two countries in Belu regency.

"Representatives from Timor Leste National Police (PNTL) have come to talk about law enforcement at the border between the two countries," regent Lodovikus said as quoted by by Antara news agency on Thursday.

He added that how to deal with illegal immigrants and smuggling would be worked out during discussions.

He also said that other issues, like the relationship between Indonesia and Timor Leste, would be part of the talks.

Lodovikus acknowledged that tension between the two countries at the border always occurred but he considered the overall situation as 'conducive' because those problems were solvable.

Meanwhile, Timor Leste President Leste Taur Matan Ruak is scheduled to meet with President Susilo Bambang Yudhoyono on June 21 to talk about trade between the two countries.

The volume of trade between Indonesia and Timor Leste has increased over the last few years. (hrl)

Foreign affairs & trade

New Zealand, Timor-Leste sign bilateral defense agreement

Xinhua News - June 26, 2013

Wellington – The governments of New Zealand and Timor-Leste on Wednesday signed a defense agreement to enable smoother cooperation between their armed forces.

Visiting Timor-Leste Minister of Foreign Affairs and Cooperation Dr. Jose Luis Guterres and New Zealand Defense Minister Dr. Jonathan Coleman signed a Status of Forces Agreement setting out the legal basis for New Zealand Defense Force (NZDF) activities in Timor-Leste and vice-versa. Previously, an individual agreement was required for each activity.

"This agreement signifies how our bilateral relationship has matured, and it builds on the close working relationship between the New Zealand Defense Force and the Falintil Forcas de Defesa Timor-Leste (F-FDTL)," Coleman said in a statement.

More than 4,000 NZDF and New Zealand Police personnel had served in Timor- Leste, contributing to a number of missions since 1999 when they were deployed after a period of civil unrest.

"Security in Timor-Leste has evolved considerably in the last decade, and their police and military provide a stable and secure environment. New Zealand has played a key role assisting Timor-Leste since 1999, and we remain committed to Timor-Leste's stability and future prosperity," Coleman said.

"The Status of Forces Agreement captures the warmth and maturity of the bilateral relationship between our two militaries. The F-FDTL is a valued partner and we are committed to maintaining our strong relationship."

Five NZDF personnel were still deployed as technical advisers to the F- FDTL, assisting with language training, personnel and logistics management advice, and small arms training.

The New Zealand Police and the Policia Nacionale de Timor-Leste were also engaged in a four-year bilateral Timor-Leste community policing program, part of a Strategic Framework for Development with TimorLeste focusing on private sector investment, education and training, security, and justice.

Indonesia, Timor Leste agree to enhance relations

Jakarta Post - June 22, 2013

Ina Parlina, Jakarta – Indonesia and neighboring Timor Leste have agreed to enhance what they deemed "good relations", as well as shoring up support for Timor Leste's bid for membership of ASEAN, both leaders said on Friday.

Timor Leste President Jose Maria Vasconcelos, popularly known as Taur Matan Ruak, paid his first official visit to Indonesia after he took office last year and met with President Susilo Bambang Yudhoyono on Friday at Merdeka Palace.

Yudhoyono told a joint press conference after the meeting that he and Ruak shared the same "commitment to continue to improve the partnership in the future".

The meeting also highlighted the border disputes that had been unresolved for years and agreed on one out of three unresolved segments.

Foreign Minister Marty Natalegawa revealed that the one segment was Dilumil/Memo. "We have two more segments [Bijael Sunan Oben and Noel Besi/Citrana] left with unsettled demarcations on the Indonesia-Timor Leste border and will find a resolution as soon as possible," he said.

In March, Yudhoyono promised Timor Leste Prime Minister Xanana Gusmao, who paid a visit to Indonesia, some resolution of the three segments. The two countries have managed to demarcate around 97 percent of the total land border, which spans 268.8 kilometers.

Indonesia annexed Timor Leste (at that time East Timor) in 1975, but lost control of it after a referendum in 1999. Timor Leste formally declared independence in May 2002.

Both countries are also seeking to apply a "soft" border approach. "Of course, border demarcation between the two countries will allow the enactment of a 'soft' border regime in border areas," Marty said.

During the Friday meeting, Indonesia and Timor Leste also agreed to launch three border crossing points: Haekesak/Turiskain-Tunubibi, Builalo-Memo and Haumeniana-Passabe. Both countries also signed a memorandum of understanding (MoU) on visa exemption for diplomatic and service passport holders.

Yudhoyono also reiterated his full support for Timor Leste's bid to join ASEAN, saying that "geopolitically and geoeconomically, Timor Leste fits the membership". ASEAN is currently studying Timor Leste's application, which was submitted in 2011.

According to Yudhoyono, Jakarta and Dili also agreed to increase cooperation in the sectors of trade, investment, fishery, agriculture, education, forestry and transportation.

Trade between Indonesia and Timor Leste has increased over the last few years. Last year, the trade value reached US$258.8 million, against $221.52 in 2011.

Ruak expressed his appreciation for "Indonesia's support for Timor Leste's effort to integrate into global communities and for being helpful in developing Timor Leste's economy".

Timor Leste president to meet SBY to talk about bilateral trade

Jakarta Post - June 21, 2013

Jakarta – Timor Leste President Taur Matan Ruak is scheduled to meet Indonesian President Susilo Bambang Yudhoyono at the State Palace in Jakarta on Friday afternoon.

"The President and First Lady Ani Yudhoyono will welcome the President of Timor Leste and First Lady Isabel Dacosta at 3:30 p.m. at the State Palace," presidential spokesman for foreign affairs Teuku Faizasyah said as quoted by Antara news agency.

He said that it would be the first state visit for Taur Matan Ruak since he was inaugurated as the Timor Leste President on April 6, 2012. The two leaders will talk about diplomatic ties, especially bilateral trade between Indonesia and Timor Leste, which has increased over the last few years.

The volume of trade between the two countries increased by 27.68 percent between 2008 and 2012, while trading value from 2011 to 2012 rose from US$221.5 million to $258.8 million.

A number of Indonesia's state-owned companies are eyeing opportunities to invest in Timor Leste. They include fuel company Pertamina, regional carrier Merpati Nusantara Airlines, Bank Mandiri, construction company PT Wijaya Karya (WIKA) and construction firm PT Pembangunan Perumahan (PTPP).

Previously, representatives from Timor Leste National Police (PNTL) had a meeting with Belu regency authorities in East Nusa Tenggara to talk about law enforcement along the border of Indonesia and Timor Leste in Belu. (hrl)

Timor Leste's economic team visits Batam

Jakarta Post - June 18, 2013

Batam – Timor Leste's former prime minister Mari Alkatiri, who is now the country's economic attache, visited the Batam Free Trade Zone Management Agency (BPK FTZ) on Monday to study the concept of the special economic zone.

Mari was greeted by BPK FTZ head Mustofa Wijaya and former Riau Islands governor and economic consultant Ismeth Abdullah.

Mari said Timor Leste intended to establish a similar zone, adding that he also had come to see the social and economic impact of the zone for the region and the country.

Meanwhile, Mustofa said that the Timor Leste delegation would also visit a number of industrial areas in Batam and take a look at some failed projects on the island.

"They want to know about the project failures so they can also learn from these cases," said Mustofa.

Prabowo exchange experience with former Timor Leste PM

Antara News - June 10, 2013

Jakarta – The Great Indonesia Movement Party (Gerindra) Advisory Council Chairman, Prabowo Subianto, exchanged experience with visiting former Timor Lest Prime Minister Marie Alkatiri at Gerindra office here on Monday.

"It is an honor that the former Timor Leste prime minister visits us and we exchange our experiences. Hopefully in the future we will make a reciprocal visit," Prabowo said.

He noted that Gerindra would support every effort to strengthen friendship and cooperation with Timor Leste. Probowo opined that the visit to Gerindra office by Marie Alkatiri was good to strengthen the bond of friendship between Indonesia and Timor Leste.

Meanwhile, Gerindar deputy chairman Fadli Zon said Marie Alkatiri visited Gerindra office for a friendship gathering with Prabowo who had served in Timor Leste for a long time.

He said that Gerindra was an open party to make political communication with both domestic and overseas parties, such as ambassadors and political leaders from foreign countries.

"We are open to welcome any ambassadors and political leaders from any countries to build our network and friendship," Fadli said, adding that Timor Leste used to be part of Indonesia as the 27th province before it seceded through a UN sponsored independence referendum in 1999.

Further, he added that a follow up meeting between Prabowo and Alkatiri would probably be held again to build a cooperation in the field of politics and economy.

During the meeting, Prabowo was accompanied by Gerindra Chairman Suhardi and his deputy Fadli Zon, and party secretary general Ahmad Muzani.

The former Timor Leste prime minister arrived at Soekarno-Hatta airport in Jakarta on Monday morning to meet other figures besides Prabowo. (Uu.O001/A014)

Australia's East Timor relations inquiry slammed as 'rubber stamp'

ABC Radio Australia - June 7, 2013

An Australian parliamentary inquiry into the bilateral relationship with East Timor has come under attack for only hearing from so-called "insiders and bureaucrats".

DLP Senator John Madigan says the public hearings are limited and elitist. Academic Clinton Fernandez fears the inquiry will just "rubber stamp" whatever Australia's Foreign Affairs department has in mind.

He says leading Dili NGO, Lao Hamutuk, has provided a written submission on how Australia and East Timor divide oil and gas resources, but has not been invited to address the hearings.

Presenter: Joanna McCarthy

Speaker: Nick Champion, Australian Labor Party MP and chair of the parliamentary inquiry into Australia's relationship with East Timor

Champion: Well it's been a decade since East Timor was created as a nation, although it obviously existed long before that, but it seemed like the right time after a decade and after some military and diplomatic and economic assistance had been given over that decade to have a review of Australia and Timor Leste's relationship.

McCarthy: What do you say to the criticism from those such as Senator John Madigan, who says you're only hearing from almost exclusively a very narrow club of insiders and bureaucrats?

Champion: Well I don't think that's true, I think inevitably these sorts of inquiries do get diplomats and they do get government departments, but we've heard most importantly from the ambassador from Timor Leste and we'll take many different submissions from many different groups. So we'll have everybody in the mix, government departments, ambassadors, NGOs and from any citizen of either nation who wants to make a submission.

McCarthy: The criticism is that the committee may end up just becoming just a rubber stamp for the DFAT party line if you like. Do you think you are hearing from enough witnesses who are departing from that traditional DFAT view of the bilateral relationship?

Champion: Well I don't think that's a valid criticism, I think that's a nonsense, parliamentary inquiries by their very nature hear from a range of different views, and there's no stopping people exercising their right to free speech. Of course the government will have a view and departments have a view, diplomats have a view, and they're normally considered and decent views about bilateral relationships. So I wouldn't expect that that view would be kind of necessarily a bad thing. And I think the criticism sounds to me to be a bit silly.

McCarthy: But then you do have people like James Dunn putting in written submissions, he's the former consul to Portuguese Timor from 1961, he's one of the world's most respected historians of the recent history of the country. Why wasn't he called to testify before the committee?

Champion: Well we've only had two days of hearings and you've got to remember this is just the start of the inquiry, so you normally by the nature of inquiries hear from government departments first and from embassies first. But that's not to say that we won't have other hearings and that other people won't be able to make, come and give us evidence. Parliamentary inquiries in the course of their activities do that, and I don't think that criticism is very valid.

McCarthy: We do know there's a lot of anger among both the government and NGOs within East Timor about the equitable distribution of resources from the Timor Sea, and Australia's share of those resources. Are you hearing enough testimony from East Timorese people, government members, NGOs that are reflecting that high degree of public anger?

Champion: Well there are a number of treaties but these treaties have been negotiated between Australia and East Timor, between Australia and Timor Leste. And they were negotiated some time ago by the governments of the respective nations. So there are treaties in place. Whether or not there's anger over them I'm kind of not aware of that, but like I said people are free to make submissions.

McCarthy: Well the East Timorese government is alleging that Australia obtained covert information during the treaty negotiations and is now trying to have the treaty completely renegotiated. So it's a pretty big thorn in the side of the bilateral relationship?

Champion: Well what as I understand it what's been applied for is arbitration, and obviously we can't go into the details of that arbitration because it's a legal mechanism. So that matter is unlikely to come before the inquiry in detail. There have been references to it obviously in the hearings so far, but we're unlikely to hear about that in detail and indeed that arbitration if it goes ahead will go ahead under the provisions in the treaty.

McCarthy: But isn't that going to be a fairly big omission in the inquiry report, if you're not considering that anger, which runs so deep in East Timor at the moment?

Champion: Well like I said I've been to Timor Leste a number of times, the sort of economic distribution of if you like the resources dividend is an issue in Timor Leste, but I don't think that's an issue necessarily of anger towards Australia. It's more of an issue of they want to see equitable growth in their own country. But of course aside from the resources issues there's things like the people-to-people links, there's things like the other economic links that are formed between our two nations, there's our very important aid program to Timor Leste, and there's things like the agricultural economy and the tourism economy, which potentially could yield a lot more jobs than the resources industry, which as we know in our own country generates a vast degree of financial resources, but is not an employment heavy industry.

Timor-Leste leader thanks Philippines for backing Asean bid

Philippine Daily Inquirer - June 7, 2013

TJ Burgonio – Timor-Leste Prime Minister Kay Rala Xanana Gusmao on Thursday thanked President Aquino for the latter's renewed expression of Philippine support for Timor-Leste's bid to join the Association of Southeast Asian Nations (Asean).

Aquino hosted a luncheon in Malacaqang for Gusmao and his delegation following a wreath-laying rite at the monument of national hero Jose Rizal.

The two leaders vowed to forge stronger bilateral ties and witnessed the signing of memorandums of understanding on education, public works and foreign affairs, but future cooperation in Asean seemed topmost in their minds.

Aquino said Gusmao's visit came at a very important time for both countries "as we focus our efforts in fostering greater cooperation and solidarity" in Southeast Asia.

"On this note, allow me to express the Philippines' support for Timor- Leste's bid to join the Asean community," Aquino said as he and the visiting premier faced the press.

"We look forward to working more closely with you in the future in advancing regional dialogue, which we know will redound not only to the growth of our people and our countries, but will also contribute to the stability and continued development of our region," Aquino added.

Gusmao thanked Aquino for supporting Timor's bid for membership in the 10- nation regional bloc.

"Timor-Leste is seeking membership in Asean as we believe we can contribute to this dynamic and growing region to which we all belong. We look forward to joining with the Philippines in the Asean family," he said.

Gusmao said he would be leaving on Sunday "with renewed confidence and hope that the strong ties of friendship and solidarity between our peoples will carry on and that our dynamic partnership will continue to strengthen in the future."

At the close of their 22nd summit in Brunei in late April, Aquino and other leaders of Asean expressed support for Timor-Leste's bid.

Asean Secretary General Le Luong Minh had said that the group was studying Timor-Leste's bid, stressing that this relatively new nation in Southeast Asia must meet its obligations under Asean's economic, political and sociocultural pillars.

Timor-Leste, comprising the eastern half of Timor island, was annexed by Indonesia in 1975 and declared its independence in 2002. It filed an application for Asean membership in 2011.

At Thursday's press conference, Aquino said the Philippines and Timor Leste had been working for the past 11 years to turn a "vision of mutual prosperity and peace" into reality for both their peoples. He thanked Gusmao for his government's $750,000 aid for the victims of Typhoon "Pablo."

The MOUs that were signed Thursday involved Philippine public works officials helping to build the capabilities of Timorese public works personnel in infrastructure planning, quality control and maintenance; the Philippine Normal University helping to devise a program for training Timorese education officials; and establishing a bilateral mechanism between the foreign ministries of both countries.

"Today, we witnessed the signing of a memorandum of understanding between the Philippine Normal University and the government of Timor-Leste, the objective of which is to enhance the training of Timorese teachers. This is part of our efforts to deepen cooperation in education between our nations," Aquino said.

Timor Leste inks MOUs on education, policy consultations, infrastructure

GMA News - June 6, 2013

Patricia Denise Chiu – The Philippines and Timor Leste have inked three bilateral agreements in areas of education, policy consultations and infrastructure to further strengthen the cooperation between the two countries.

The signings were announced during the five-day visit to the Philippines of Timor Leste Prime Minister Kay Rala Xanana Gusmao – a visit that aims to strengthen his nation's bid to join the Association of Southeast Asian Nations (ASEAN).

The first agreement – a Memorandum of Understanding and Policy Consultations between the Philippines' Department of Foreign Affairs (DFA) and the Ministry of Foreign Affairs and Cooperation of the Democratic Republic of Timor-Leste – was signed by DFA chief Albert Del Rosario and his Timor Leste counterpart, Minister of Foreign Affairs and Cooperation Jose Luis Guterres.

The MOU will define the cooperation between the Philippines and Timor- Leste, particularly on issues of regional and international mutual interest.

A second agreement that recognizes the expertise of trainers from the Philippine Department of Public Works and Highways (DPWH) and aims to build the capability of Timor-Leste Public Works' personnel in infrastructure planning, quality control, and maintenance was also signed.

DPWH chief Rogelio Singson and his counterpart, Timor Leste Minister of Public Works Gastao Francisco de Sousa, inked the agreement that will establish a cooperative approach between the two countries in terms of mentoring, to facilitate capacity development.

Finally, Commission of Higher Education (CHED) chair Dr. Patricia B. Licuanan and Timor Leste Minister of Education Bendito dos Santos Freitas signed a Memorandum of Understanding between the Philippine Normal University and the Ministry of Education of Timor-Leste, which will develop a training program for Timorese teachers using the Philippines' best practices as model.

Timor-Leste keen to join ASEAN

Channel News Asia - June 4, 2013

Singapore – Timor-Leste said it is committed to building its human resources in order to contribute fully to the Association of Southeast Asian Nations (ASEAN).

Timor-Leste's Prime Minister Xanana Gusmao made these remarks during a lecture in Singapore on Tuesday, organised by the S Rajaratnam School of International Studies.

Mr Gusmao, who is also the country's Defence and Security Minister, noted that since 2008, Timor-Leste has enjoyed average economic growth rates of above 10 per cent annually.

However, despite having some of the world's most competitive tax rates, it still needs to radically improve its human resources, as well as build core national infrastructure and eliminate extreme poverty.

Timor Leste is the youngest nation in the Asia-Pacific. Speaking to Channel NewsAsia after the lecture, Mr Gusmao explained why it is important to be part of ASEAN.

"In this globalising world, we cannot be alone. And looking at our geographical location, we are part of Southeast Asia. That is why we said better to join, to participate in one or another way not only to the region but to the world. We are in a small way trying to be a 'contributory' at least in ideas, in finding solutions to a few problems that we can think about or we can address," he said. – CNA/fa

Timor Leste plans to supply goats to Indonesia

Jakarta Post - June 5, 2013

Jakarta – The Timor Leste Democratic Republic (RDTL) government plans to cooperate with the Indonesian government by exporting goats and cows to help to fulfill the latter's need of meat during Idul Fitri and Idul Adha.

RDTL Husbandry Affairs Junior Minister Valentino Varela said as quoted by Antara in Kupang on Wednesday that the export plan needed to be discussed further with the Indonesian government.

Valentino said that there were around 3 million goats in Timor Leste that could be exported to Indonesia.

Other than deliberating a potential cooperation in meat trade, Valentino said that his visit to Indonesia was also to discuss a possibility to mitigate contagious disease among animals, particularly disease that occurred in the border region between Indonesia and Timor Leste.

Mining & energy

Timorese leaders push for a better deal from their offshore gas fields

The Economist - June 8, 2013

Singapore – The future finances of the young, poor nation of Timor-Leste, formerly East Timor, have become embroiled in allegations of skulduggery by Australia nearly a decade ago. Timor-Leste has taken its big, wealthy neighbour to arbitration over a 2006 agreement on the exploitation of oil and gas in the sea between them.

Speaking on a visit to Singapore this week, Timor-Leste's oil minister, Alfredo Pires, claimed to have "irrefutable proof" that, during negotiations in 2004, Australia's secret services had illegally obtained information. His lawyer claims the Timorese prime minister's offices were bugged.

Whatever the truth, leaders in Timor-Leste feel Australia took advantage of them. In 2004 the tiny nation was still recovering from the devastation that followed its vote for independence from Indonesia in a UN-organised referendum in 1999. The Indonesian army and supporting militias had sought revenge in a rampage of killing and destruction.

Ever since, Timor-Leste's hopes of prosperity have rested on offshore oil and gas reserves. But most are located in the Timor Gap, under waters also claimed by Australia. Cash-strapped and desperate for revenue to start flowing, leaders saw no option but to agree to treaties with Australia that many in Timor-Leste see as unfair.

In all, three linked treaties covering the Timor Gap were signed, but the maritime boundaries were never agreed upon. The first, the Timor Sea Treaty, signed in 2002, gives Timor-Leste 90% of the revenue from a Joint Petroleum Development Area (JPDA). This meant that revenues could start flowing.

The JPDA was a compromise between Australia's insistence the maritime boundary be the deepest point as agreed with Indonesia in 1972, and Timor- Leste's hope to use the "median line", halfway across the sea. Only 20% of one of the largest fields, Greater Sunrise, is within the JPDA.

Then another treaty was signed in 2006, after two years of tortuous negotiations, during which the alleged spying took place. This one gives each country an equal share of revenue from Greater Sunrise on condition that they waive their rights to assert sovereignty, or pursue any legal claim over the border, for 50 years.

It is this treaty that rankles with the Timorese. If the median line were the border, Greater Sunrise and many other fields would fall in Timorese waters. Mr Pires says that the uncertainty about the maritime boundary makes it hard to plan for the long term or to attract investment.

Despite its growing oil wealth (its petroleum fund already contains $13 billion) Timor-Leste remains one of Asia's poorest countries. It is pinning its hopes on the Tasi Mane project, an ambitious plan to build a gas plant to process gas from Greater Sunrise, and a refinery and associated petrochemical industry. That is a gamble as long as the sovereignty issue is unresolved and an impasse persists over the route of a gas pipeline from Greater SunrisEast Timor-Leste wants a pipeline to Tasi Mane to bring jobs and income. Australia wants a pipeline to Darwin.

The bugging allegation and arbitration proceedings seem intended to force Australia to the negotiating table. Leaders in Timor-Leste hope to break the logjam and perhaps to win a better deal.

Economy & investment

Timor-Leste to post strong 2013 growth but downside risks loom

Asian Development Bank News - June 27, 2013

Dili – Timor-Leste is on track to post growth of 9.5% in 2013 the strongest rate in the Pacific region but some downside risks for the economy loom, says the latest Pacific Economic Monitor, released today by the Asian Development Bank (ADB).

"Growth is set to remain robust this year, with the private sector doing well, but there are some potential storm clouds ahead with a slowdown in government and capital spending in the first quarter and some oil price weakness," said Shane Rosenthal, Resident Representative of ADB's Timor Leste office.

"Inflation is also running above projection although concerns about price pressures are partially tempered by an expected slowdown in infrastructure spending."

The latest gross domestic product growth projection is slightly below an April ADB forecast of 10.0%. However, for 2014, ADB expects the oil-rich economy to see growth tick up again to 10.0%. The Pacific region as a whole is expected to grow 5.0% this year, rising to 5.5% in 2014, as the region benefits from a stronger global economy.

Government spending fell by over 60% year-on-year in the first quarter of this year. Capital expenditure slumped by an even more dramatic 90%, following high levels of spending on the national electrification project in 2012. The modest level of capital spending in the quarter accounted for less than 2% of the total earmarked for 2013, raising doubts about the rollout of the government's proposed infrastructure program this year. Scaling up government capacity to implement its ambitious infrastructure development plans has been an issue in recent years as annual appropriations for capital projects have risen very rapidly.

At the same time, the country's Petroleum Fund continued to grow, expanding $1.2 billion in the first quarter to $13 billion, on the back of inflows from royalties, taxes and strong investment returns. A number of proposals have been put forward to ensure the ongoing sustainability of the fund.

Inflationary pressures remain a concern with ADB forecasting consumer price inflation of 9.0% for 2013, well above other projected rates in the region. In the first quarter, food and transport costs rose 15.5% year-on-year and housing prices gained 8.2%, largely as a result of internal supply chain bottlenecks. Moving forward, however, prices may get some relief from further declines in international commodity prices, a rising US dollar, and the completion of the national electrification project in 2012, which is expected to ease capacity constraints.

Why East Timor's GNP is four times as high as its GDP

Quartz - June 3, 2013

Ritchie King – That extreme outlier in the chart above, the one throwing off the entire scale – that's East Timor. The value shown is the percentage difference between the gross national product (GNP) and the gross domestic product (GDP), two slightly different measurements of the strength of a nation's economy.

For the vast majority of countries, the values are nearly identical. In the US, for instance, GNP was 1.3% higher than GDP in 2010. In both China and the UK, it was just 0.4% higher. Yet in East Timor, GNP dwarfed GDP in 2010 by 262%.

The difference between the two metrics is right there in the names. Gross domestic product is the value of all the goods that a country produces and all the services that it provides domestically – i.e., on its own territory. It doesn't matter if the goods and services are coming from citizens or a foreign-owned company. As long as they are being created on a coutry's soil or offshore property, they count towards the GDP.

Gross national product, on the other hand, is all the goods and services produced by a country's citizens or nationals, even if the production happens abroad. This does not include production by foreigners within a country's borders. So why is GNP so much higher than GDP in East Timor? Foreign aid.

East Timor became autonomous in 2002 after decades of occupation by Indonesia, whose military attempted to starve Timorese by poisoning their food and destroying large tracts of cropland. Needless to say, the people of East Timor and their economy still feel the impacts of that violence acutely, and the production of goods and services on Timorese soil – the country's GDP – is very low.

But many countries send aid to East Timor (though its effectiveness is debated). This aid, because it's coming from overseas, is counted in the same way as compensation for working abroad, so it contributes to GNP but not GDP. Hence the huge difference.

More broadly, the gap between GDP and GNP can say a lot about the nature of a country's economy. In Ireland, for example, GNP was slightly higher than GDP in the 1960s and 70s, but the ratio steadily fell thereafter until GNP was 17.1% lower in 2010. Ireland is much better off than the Irish. The reason is that favorable Irish tax laws have prompted foreign companies to set up subsidiaries on the island in an elaborate tax avoidance play called the "Double Irish."

The examples of Ireland and East Timor show the peril in just relying on changes in GDP as the one true litmus test of a country's economy. An Apple shell company located in Ireland that isn't employing Irish people and is barely paying taxes to the Irish government is not contributing to productivity in a meaningful way, and aid sent to Timorese might be helping more than GDP would indicate.

Analysis & opinion

Xanana Gusmao, Timor Leste and regional politics

Jakarta Post - June 17, 2013

Fitri Bintang Timur, Singapore – Timor Leste Prime Minister Xanana Gusmao is often said to be the Che Guevara of the country. His charisma and charm helped him escape troubled times before his nation gained independence. Perhaps one day he might realize his dream to become a pumpkin farmer and persuade neighboring countries to accept Timor Leste as a member of the Association of Southeast Asian Nations (ASEAN).

In his lecture in Singapore last week, Gusmao explained the state of the country after the UN mission progressively withdrew in 2012. He also asserted that Timor Leste was committed to playing a more active international role by becoming a member of ASEAN as and when membership is granted.

Despite the looming domestic challenges of human resource development, lack of infrastructure, shortage of capital and socio-physiological trauma of the past, Gusmao is confident that his country can be of benefit to the region. Asia-Pacific countries will profit from Timor Leste's strategic location as the connector between two regional organizations – ASEAN and the Pacific Island Forum – thus creating opportunities for wider trade and cooperation. The country also has a good relationship with Australia, Indonesia, New Zealand, the Solomon Islands and Vanuatu that could benefit ASEAN.

In the face of global nervousness over China's emerging power in Asia Pacific, Gusmao stressed that the region was big enough to accommodate large powers seeking to build a better future for the region; thus, the fear of China was unnecessary. There are other large economies in the region, such as Japan, Korea and Indonesia, but there is no tension surrounding them.

Gusmao recalled his cynical response to one Western journalist's question a couple of months back. The journalist suspected that Timor Leste was now influenced by China's soft power after the "rising dragon" funded the construction of the country's Presidential Palace and Foreign Ministry. To which Gusmao retorted, "China is not 'invading' Timor Leste; in fact, China's investment in the country is only around US$60 million. Comparatively, it is still far below the money that China has invested in other countries." There is a truth in Gusmao's statement as China's investments in the US, Australia and Indonesia reached US$54 billion, $55.9 billion and $25 billion, respectively (Heritage Foundation, 2012).

Rather than nitpicking over a certain country, Asia-Pacific nations would be advised to acknowledge its challenges. Gusmao said the region should focus on solving the issues of poverty, inequality, violence toward women and girls and regional security tensions. He offered alternative solutions of strengthening cooperation and building shared interests rather than highlighting conflicting issues. He provided a measurement of progress by reminding countries to meet the Millennium Development Goals (MDGs), which will be reviewed in 2015.

For ASEAN, action should focus on constructive measures with further cooperation in the areas of economics, the environment and building human resource capacity. Gusmao admitted that his country was in need of support for human resource capacity-building and strategy. The international fear, however, is that when the three prominent leaders of Timor Leste – Xanana Gusmao, Mari Alkatiri and Ramos Horta – retire, the country will stagnate due to a lack of human resources. Gusmao reassured that the youth of Timor Leste were now better educated than him and Alkatiri, as they both only obtained a secondary-level education. The problem, though, is how to integrate these youths to help build the country.

Interestingly, Gusmao did not mention the problems of corruption and nepotism that hamper ordinary Timor Leste citizens who want to gain high political rank. These issues, if swept under the carpet, could slow down the country's economic growth, which is primarily derived from oil production.

In a candid Q&A session, Gusmao was asked about Timor Leste's reconciliation process and whether other countries might be able to learn from the process. He replied that for his country, it was not wise to follow the Palestinian intifada approach and keep fighting but rather to pursue reconciliation.

If he opted to hold the Indonesian generals responsible, then it would not be fair if the countries supplying arms to the Indonesian New Order government were not held responsible. If he pursued the blame, consequently, the young generation would suffer because it would remind them of the trauma of conflict. Therefore, for the sake of the future, he viewed reconciliation and maintaining good relations with Indonesia as more important.

Later on, Gusmao mentioned his informal meeting with Susilo Bambang Yudhoyono (when the latter was coordinating political, legal and security affairs minister under president Megawati). SBY sought Gusmao's cooperation to prevent Timor Leste from being too troublesome as, at the time, Indonesia was going through its democratic transition and was politically unstable. After a long discussion, Gusmao agreed, and when he became Timor Leste president he kept his promise.

Currently, Indonesia is undoubtedly a significant neighbor as it is Timor Leste's largest trading partner and the two countries share history and more than 90 percent of their land border. A couple of months ago, when Gusmao visited Jakarta, Indonesian Foreign Minister Marty Natalegawa also asserted the importance of Timor Leste as a neighbor with a shared border, and supported the country's membership application to ASEAN. The argument of a shared border is a strong case that Marty raised, yet this does not guarantee the application's success as Papua New Guinea, for example, was only granted Special Observer status to ASEAN in 1981, not full membership.

Indonesia also benefits from trade relations with Timor Leste, enjoying a huge export surplus that supports the two countries' good relations. However, maintaining the friendly relationship could be put in doubt if Indonesia's political condition markedly alters when the country faces its election next year.

After all, one of the candidates considered within a chance of winning, based on several national survey institutes, is Prabowo, a former general who has been accused of committing human rights violations in Timor Leste. Will Timor Leste be able to keep a cool head if Prabowo ends up leading the country next door? On the other hand, whoever becomes the next Indonesian leader, will they maintain the same composure in its relations with the newly established country? We shall have to wait and see.

[The author is an associate research fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.]

Drilling down – East Timor plays risky game with Sunrise

Australian Financial Review - June 14, 2013

Angela Macdonald-Smith – The Timor Sea has never been famed for offering oil and gas operators smooth sailing over the years.

However East Timor's manoeuvring over the treaty with Australia about royalties from Woodside Petroleum's Sunrise gas venture have escalated sovereign risk in the waters off our northern coast to a worrying new level.

The espionage claims that East Timor hit Australia with in April, related to the negotiations on the treaty, have knocked the Sunrise venture for six. Any hopes the partners had of breaking the stalemate over how to develop the valuable resource have all but disappeared for the time being.

That is troublesome enough, but the issue is spilling over to the other ventures in the Joint Petroleum Development Area (JPDA) – the waters jointly run by East Timor and Australia – including ConocoPhillips' Bayu- Undan gas venture and Eni's $US1 billion Kitan oil project.

Along with the tax dispute over Bayu-Undan that has been simmering away since last year and a lack of clarity in some legal and regulatory processes in East Timor, some operators are signalling their confidence in investing in the nation's waters has been badly damaged.

Invoking arbitration

Various theories abound on what is behind East Timor's decision in April to use years-old allegations of espionage to invoke arbitration over the Sunrise treaty, formally called Certain Maritime Arrangements in the Timor Sea (CMATS).

The allegations date back to when the treaty was being negotiated by Australian and East Timorese government officials in 2004.

On the face of it, should the treaty be invalidated the split in revenues between Australia and East Timor would revert from the 50:50 enshrined in the accord to 82 per cent in favour of Australia, given most of the Sunrise resource lies in waters formally – if incorrectly in the eyes of the Timorese – assigned to Australia.

But the move is being widely perceived as an initial step in a bid by the Timorese to secure a bigger chunk of revenues from Sunrise.

That may involve simply a fatter share of the pie or a stake in the project for East Timor's new national oil company Timor Gap. Or, the Timorese may want to hardwire into a new agreement a requirement that secures its long- held aim, that Sunrise be developed through an onshore plant on its soil, rather than through floating liquefied natural gas as favoured by Woodside and its Sunrise partners: Shell, ConocoPhillips and Osaka Gas.

As of mid-week, the Australian government was still considering its response to the notice of arbitration.

However, some move is imminent, given Australia has only about 10 days remaining of the 60 it had as of April 23 to appoint an arbitrator, or seek to take a different course of action.

Some Timor Sea operators are worried the dispute has put the wider Timor Sea treaty framing oil development in the region in doubt.

Timor's natural resources minister Alfredo Pires says Timor does not want to cancel CMATS as it wants to avoid the risk of terminating the Timor Sea Treaty. Rather, it wants the accord "invalidated" and renegotiated, which Mr Pires says would provide certainty for foreign investors.

Some in industry are concerned

It's no surprise that view is not shared in the industry where some fear they may be forced to consider write-downs of assets in the JPDA.

Others, however, seem unfazed. Italy's Eni, a partner in Bayu-Undan as well as in the Kitan oil project that started up in 2011, is still planning to drill five wells in the JPDA over the next 18 months, presumably involving many tens of millions of dollars.

Its confidence is backed by the importance that revenues from the oil and gas ventures in the JPDA have for the East Timorese economy, given the lack of exploration success so far in the three wells drilled so far by India's Reliance Industries and Eni in its own exclusive waters.

But the Sunrise venture is shaken and is for now doing little more than continuing with its social investment program in East Timor.

Despite more than a decade with little progress on Sunrise, the venture is for the moment holding together, drawn by the potential of the liquids-rich resource of 5.13 trillion cubic feet of gas seen as ideal for floating LNG.

In the meantime, East Timor continues to act as if onshore development of Sunrise is a certainty. In a round of speaking events last week in Singapore and the Philippines, Prime Minister Xanana Gusmao regularly highlighted plans for LNG production as part of broader ambitions for industrial development on the south coast.

Both governments say the taxation dispute over Bayu-Undan is unrelated to the arbitration process. Conoco, as the venture operator, is contesting $US227 million in taxes, penalties and interest it believes have been erroneously levied and has warned the issue has harmed its view on the investment climate in East Timor.

In any case the feeling among some is that all the strands are connected and part of a broader strategy by the Timorese around Sunrise.

But it looks to be a murky and drawn-out play. Investors looking for action in LNG to the north should look instead to Papua New Guinea, which has its own hurdles but has leapt ahead in terms of sovereign risk.

Australian inquiry into East Timor relations ignores local experience

The Conversation - June 4, 2013

Clinton Fernandes – A parliamentary inquiry examining Australia's relationship with East Timor is underway and the proceedings so far do not make for comfortable reading.

It's a good time for an inquiry: East Timor successfully held elections last year and the Australian-led International Stabilisation Force completed its mission and withdrew in January 2013.

The inquiry received 73 written submissions and although some were from government departments, many were from community groups and individuals who have lived in East Timor and have accumulated decades of experience from in-country projects with people on the ground.

One such submission came from James Dunn, who was appointed Australia's consul in 1961 to what was then known as Portuguese Timor. Dunn's 1977 report on war crimes and crimes against humanity committed by Indonesian troops was read by an international audience and resulted in him testifying as an expert witness before the US Congress.

Over the last 35 years, Dunn's expertise has been shared with officials in the United Nations, the European Parliament, the US, the UK, Japan, the Vatican, the International Committee of the Red Cross and other such institutions.

Despite this, Dunn was not invited to address the inquiry. Instead, as Senator John Madigan noted, the opportunity to address the committee was extended "almost exclusively to a narrow group of insiders and bureaucrats".

Many of those who were invited to speak simply read from or paraphrased their written submissions. Sadly, most of the questions from the committee lacked insight. Rod Brazier of AusAID informing the committee is a case in point:

"A few years ago the Timorese government had a great deal of trouble expending their budget... with Australia's health and the help of others that percentage is approaching the high eighties or maybe around 90 per cent execution."

If this statement is true then it varies dramatically from the understanding of the East Timorese president, who wrote in February 2013 to members of his parliament expressing concerns about budget execution rates. He noted that: "...the rate of execution of the state budget for 2012 will have been about 70%."

If you exclude the funds for the electrification project of the country, the rate of execution of the Infrastructure Fund in 2012 was significantly lower: 29%.

At the inquiry, MP Gai Brodtmann, who is a former employee of the Department of Foreign Affairs and Trade, asked inane questions peppered with corporate buzzwords like "checks and balances", "accountability" and "transparency". However, she forgot to ask how AusAID provided a figure of "around 90%" when the East Timorese president stated that the real rate was about 70% and as low as 29%.

The commitee's chair Nick Champion responded to concernsabout the limited, elitist character of the public hearings, saying: "...there will be more before the committee reports, plenty of time to hear from a wide range of witnesses."

But if that is to occur, it won't happen until a new Australian parliament forms after the next election. A new committee will have to be established, then this new committee will have to request the foreign affairs minister to re-refer the inquiry to it.

The committee will then have to wait for this re-referral before it can proceed. Maybe then there will be a new media release announcing the resumption of the inquiry together with a call for any new or supplementary submissions. In other words, don't hold your breath.

It is hard to avoid the impression that the whole point of this inquiry is to get a bipartisan committee to rubber-stamp whatever the Department of Foreign Affairs and Trade has in mind already.

So, how should the Australia's relationship with one of our nearest neighbours proceed? I've made a submission to the inquiry, but I'd prefer to highlight an authentic East Timorese voice, whose views I share. It's from East Timor's most insightful and accurate think-tank, Lao Hamutuk, who were not invited to speak to the inquiry:

"Australian assistance to Timor-Leste has been far less than the money Australia has received from oil and gas fields... the petroleum reserves under our part of the Timor Sea are essential to improving the lives of our people... they underwrite about 95% of Timor-Leste's state income and comprise two-thirds of our entire economy."

"These limited resources are being purloined by our larger, wealthier neighbour. How can we build better lives for our people while we allow Australia to pocket much of our wealth from the Laminaria-Corallina, Sunrise, Bayu-Undan and Kitan [oil fields]? Is Australia so afraid of a fair boundary settlement that you would rather be a bully than a good international citizen?"

These are the kinds of voices that the committee has chosen not to hear from.

[Clinton Fernandes is an Associate Professor, International and Political Studies Program at University of New South Wales.]

Home | Site Map | Calendar & Events | News Services | Links & Resources | Contact Us