Rod McGuirk, Dili – The operator of a central Dili supermarket razed in riots this week vowed today never to do business in East Timor again.

The Hello Mister Supermarket has become an icon of the reconstructed city since it opened in March 2000.

General manager Kirk MacManus said his business probably would have wound up early next year even if it hadn't been gutted by a Molotov cocktail on Wednesday.

He blamed corruption and escalating taxation rather than the downturn in trade with the withdrawal of the United Nations for his loss of faith in the country.

"The destruction of this place is very symbolic," MacManus said. "We were the city centre, we were the first people here. "When we opened this place, people were thanking us. "This place [East Timor] has gone back three years in a lot of ways."

East Timor President Xanana Gusmao assured donor nations today that the burning of buildings in Dili, including Prime Minister Mari Alkatiri's house, was an isolated event.

He also reminded the international community that they, through the UN administration, bore all responsibility for what the independent East Timor had become.

"I told them that we cannot always perceive this nation ... after independence," he told reporters. "We must remind ourselves ... that we started the [independence] process in East Timor in November 1999 [with the UN transition administration]."

MacManus, meanwhile, accused the government of creating an environment where businesses that did not pay bribes could not remain competitive.

When the Americans controlled customs, 10-15 per cent of his supermarket supplies were subjected to random inspections. He estimated that 90 per cent of his stock, including perishables, were now held up on the wharf by customs.

"We've been told by our staff that customs have told them, 'we can make your customs entries a lot cheaper and you'll never have a hold up if you just go through the back door'. "But we refused to do that [pay bribes]."

The business bought its own generators after electricity costs rose to $US11,000 a month for premises, without airconditioning. The government responded with a plan to tax the business for generating its own power, he said.

The business' bid to renew its lease had also been stonewalled for six months by the government, he said.

Attempts to have business vehicles registered were routinely stalled by public servants' advice to "come back later". "I think a lot of it's corruption, just waiting for a little something under the table," he said.

He repeatedly telephoned the police and fire brigade but neither responded.

With no insurance available in East Timor, he calculated that the business losses ran to hundreds and thousands of dollars.

"If the government can't handle it [security], they shouldn't be dealing with it," he said. "Maybe hand some of the control back to the UN, for security at least."

MacManus, a Canadian, said he had not yet decided where his next business venture would be. "I don't know anywhere but East Timor, " he said.