Really encouraging news from East Timor is hard to come by, but the election of Jose Ramos Horta as its new president should be widely welcomed, and not only by his own citizens, some 70 per cent of whom voted for him in the second round run-off, but in the region and the wider community of nations.

Ramos Horta, who has been prime minister strictly a more powerful position than that of president since the breakdown of the country last year, is realistic about the task facing East Timor, and the need to unite it. He knows well, and has sought to explain to his supporters, that there are no magic bullets or puddings capable of making unnecessary fundamental work in building an economy, in health, education and employment, in providing security and stability to the population, and in building solid political institutions and free markets.

The true measure of success in a strong East Timor will be work at the village level, not in building glittering cities and armed forces, and in developing agricultural self-sufficiency, employment and basic economic growth, not in get-rich quick schemes.

It also involves more integration with the economies of South-East Asia. Oil revenues may well, in the future, reduce the nation's dependence on foreign aid, and provide the capital from which growth, education, employment and sustainable agriculture can be promoted.

A mere oil economy, however, will be no more productive than a mere aid economy in addressing the fundamental problems for the people.

The election of Ramos Horta is an encouraging sign in another sense. It marks the defeat of Fretilin the party of the independence struggle, and, for that matter, the party with which Ramos Horta and the outgoing President, Xanana Gusmao, were once so closely associated. At independence, there seemed a real risk that East Timor might become an effective one-party state, with the party's own processes rather more important than the parliamentary system in determining policy and preferment, and the resolution of the way that scarce goods were rationed about the country.

That there are now new parties Gusmao has formed one, too, with which he will campaign at election in several months and that they are achieving successes is a sign of a healthy politic and an increasingly healthy political debate. Fretilin's failure at the presidential election its champion Francisco Guterres received only 30 per cent at the run-off is in major part a reaction to its mismanagement of the nation's east-west split in the contest about the distribution of resources, and of the army mutiny, and civil disorder, which followed.

That led to international intervention to restore order, and to Ramos Horta's taking the premiership, a resolution which must be regarded as adopted by the citizenry with the successful, and reasonably orderly, election results.

Gusmao himself must bear some responsibility for last year's collapse, if only for his initial detachment from the situation.

Gusmao, a former independence fighter who was captured and imprisoned by the Indonesians, is a charismatic figure, whose spirit of reconciliation has played an important role in forging relationships between East Timor and its neighbours, particularly Australia and Indonesia. But he has not proven greatly practical, or adept in the hard slog of government. Good at selling the dream and the vision perhaps; not so good in making it a reality.

In this sense, the expectation that his party will be sufficiently successful at the parliamentary elections that he will be appointed prime minister, and that he will be moving from a largely symbolic role to a practical one has obvious dangers for the nation. Yet the nation may benefit from Ramos Horta and Gusmao's job-swap if Ramos Horta assumes a more practical role.

An immediate and tricky issue is how Ramos Horta approaches the problem of the military rebel leader Alfredo Reinardo, for whom, technically, arrest warrants run.

Australian soldiers have failed to capture Reinardo on the murder charges he faces, including at an ambush south of Dili two months ago. Formally, Reinardo is still being sought and United Nations spokesmen, including the Australian commander of the international stabilisation force, Mal Rerdon, have repeatedly insisted that no word has been received from the East Timor Government calling off the search, or abandoning efforts to bring him to justice.

Informally, however, it appears that Ramos Horta has made his political accommodation with the supporters of Reinardo, not least with the discontent and frustration of people on the western side of the nation, who have felt that easterners and east interests have been the primary beneficiaries of independence so far.

That is politically pragmatic and even statesmanlike for Ramos Horta, yet he, with his international experience, must also wonder and worry about the precedents that will be set if it is thought that mutiny, rebellion and defiance, in good cause or bad, if taken far enough, will not be punished. Stability, security and justice are as fundamental to Ramos Horta's task as the hard work in the schools and in the fields.