Jennifer Wells – On the news a few evenings back, CBC correspondent Patrick Brown contextualized the birth of the new nation of East Timor by emphasizing how small it is. With a population of just 800,000 souls, Brown made the point that the former Indonesian-occupied east end of an island is no bigger, people-wise, than Winnipeg.
How can a nation so small hold out hope for a viable future? The answer is concise. O-I-L. And G-A-S.
The commodities are central to the country's economic independence. So key, in fact, that it should come as no surprise to hear that the Timorese, not 24 hours into nationhood, made it clear that they are rethinking the Timor Gap Treaty, which governs oil and gas reserves in the Timor Sea. In so doing, the fledgling country is taking on not only Australia, with whom the treaty was signed, but such heavyweight American oil interests as Shell Oil Co. and Phillips Petroleum Corp. China and Portugal, to name but two, desperately want a piece of the action, Portugal's Petrogal S.A. having long been rumoured to be in secret negotiations.
It is rich to observe East Timor, shunned by the West as the murderous Suharto forces "integrated" the region in the waning days of 1975, being wooed in this way. In Suharto's Indonesia , Hamish McDonald chronicled the visit of US President Gerald Ford and his then-secretary of state, Henry Kissinger, to Jakarta in December of '75. The timing was slightly awkward, as Gen. Suharto planned to attack the East Timor capital of Dili on the very day of the presidential visit. What to do? The United States certainly knew of the little dictator's intentions and proposed a simple solution: might the Indonesians postpone their rampage for a day? But of course.
Writes McDonald: "In Jakarta, Kissinger raised no objection to the intervention, stipulating only that the Indonesians did it 'quickly, efficiently and don't use our equipment'."
Of what use was East Timor anyway? It had a high-grade coffee crop, and the sandalwood was lovely, but the short-term commercial prospects for a country with a per capita gross national product of $40 (US) annually did not compel the Americans, or Australians, for that matter, to interfere in Suharto's plans. In A Nation in Waiting, an analysis of Indonesia through the '90s, Adam Schwarz described the situation thusly: "Australia and the United States made it clear to Jakarta that they intended to stay uninvolved, which Jakarta interpreted to mean tacit support for its integration designs."
And what did integration bring East Timor? In October, 1979, a Red Cross official was quoted as saying that East Timor's condition was "as bad as Biafra and potentially as serious as Kampuchea." An estimated 200,000 Timorese would ultimately die before Indonesia was through. The Suharto dictatorship, eager to use East Timor as an example to put down secessionist sentiment elsewhere in the archipelago, felled them by slaughter and starvation. Genocide is not too strong a word.
Now Suharto is gone, the interregnum of United Nations stewardship is over, East Timor has been relaunched, and all eyes are on her oil and gas assets. On Independence Day, the new country signed the modified Timor Gap Treaty, a revision of a previous treaty signed in 1989 between Australia and Indonesia. The 1989 contract accomplished two objectives: it affirmed in the eyes of the world Australia's endorsement of Indonesia's rule over East Timor, and it split the oil and gas spoils 50-50 between Canberra and Jakarta. Australia promoted the arrangement as a "logical corollary" to the absorption of East Timor into Indonesia.
The new deal signed this week looks, on its face, like an obviously better deal for the new country, with 90 per cent of revenues owing to East Timor and the remaining 10 to Australia. But hold on. The arrangement governs a predetermined "Joint Petroleum Development Area." Within that area sits the Bayu Undan oil and gas field, which is expected to contribute at least $6 billion to the East Timorese economy across a 20-year production scheme, commencing in 2005.
Far less advantageous to East Timor, however, was Australia's insistence on annexing to the same treaty the as-yet-undeveloped, and expectedly far richer Greater Sunrise project. Only 20 per cent of the Greater Sunrise field sits within the boundaries of the joint development area. It has been estimated that 82 per cent of what could be a $30 billion plus revenue stream will flow to the Australian side, a consortium that includes Shell and Phillips.
East Timor's Prime Minister Mari Alkatiri put Australia on notice this week that agreeing to be a signatory to the treaty does not resolve the drawing of maritime boundaries between the two. Boundaries, says Alkatiri, are still to be negotiated and must result in an arrangement for a greater share of Sunrise dedicated to Dili's coffers.
Australia may have hoped that the 90-10 split would make it appear generous in the eyes of the international community. It is to laugh. The country merely looks sly, again.
More than a quarter-century ago it was Australian Prime Minister Gough Whitlam who mused that Indonesia might as well take East Timor as it was "economically unviable" on its own. Whitlam's government already had its sights set on exploitation of East Timor's natural resources. Australia had no sense, then, that the tiny outpost would not waiver in its efforts to claim its nationhood. Which it has now, officially, won. The sun had not even set on Independence Day, before the reborn country put Australia, and the world, on notice: East Timor may be a pipsqueak, but oh what a mistake it would be to underestimate its determination.