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Back to the future in Dili

Inside Story - February 24, 2020

Michael Leach – Saturday morning saw the widely anticipated announcement of a new parliamentary majority in Timor-Leste, led by Xanana Gusmao. Assuming it is installed by president Francisco "Lu-Olo" Guterres, the alliance will become the country's ninth government since the restoration of independence in May 2002.

Assembled at a long table in Dili for the announcement were representatives of six parties, the largest of which – Xanana Gusmao's CNRT – holds twenty-one seats. Alongside Gusmao were the leaders of the Democratic Party (five seats), KHUNTO (five), and three smaller parties, the United Party for Development and Democracy, Frente Mudanca and the Timorese Democratic Union.

Although the smaller parties each bring just a single MP to the table, they are vital in taking the new coalition to thirty-four seats, a majority in the sixty-five-seat parliament. Along with the Democratic Party, the three were not part of the Alliance for Change and Progress, or AMP, which has governed for eighteen months since the 2018 election.

Saturday's announcement follows an extraordinary political crisis triggered by the failure of the AMP government to pass its 2020 budget last month, despite its outright majority. In a major rebuke to its partner, the Popular Liberation Party of prime minister Taur Matan Ruak, Gusmao's CNRT abstained from voting. Following the vote, Ruak declared the AMP alliance of CNRT, the PLP (eight seats) and KHUNTO to be at an end.

The failure to pass the budget also threw the country back on its reserve "duodecimal" budget system. Based on monthly extensions of the 2019 budget, the system precludes new programs and increases in ministerial budgets. Timor-Leste's economy remains highly dependent on government expenditure, and the reversion to the reserve system was widely blamed for contributing to economic contraction in 2017 and 2018.

As Timor-Leste awaited a solution to the political impasse in recent months, Gusmao and CNRT called for another round of early elections, while President Guterres, a senior member of the Fretilin opposition, and most other political parties called for a negotiated remodelling of the government within the current parliament.

In an attempt to resolve the impasse, the president consulted the parties and organised a meeting of senior historical leaders, including former president Jose Ramos-Horta, Fretilin leader Mari Alkatiri, prime minister Ruak and military commander General Lere. Critically, Xanana Gusmao was invited but didn't attend.

Saturday's announcement brings this period of uncertainty to an end, at least for now. The two parties excluded from the new coalition, Fretilin and the PLP, reportedly sought to form the nucleus of a new government at the last minute, but appear only to have locked in their own thirty-one seats. Earlier in the week, Fretilin stated that it would seek to form government at the next regular parliamentary election, scheduled for 2023.

What happens next will be eagerly watched by observers, and will unfold in two phases.

The new parliamentary alliance will put itself forward to the president later this week. He is not bound to approve it as the new government, and could instead opt for a new election. But the clear majority the new alliance brings, and the president's previously stated view that another early election would be a last resort, make it likely he will do so – provided no cracks emerge in the six-party agreement. In the event of approval, Gusmao himself is widely expected to become the new PM, though some have suggested the job could go to Ramos-Horta, who was instrumental in setting up the new alliance. (For his part, Ramos-Horta insists it will be Gusmao, and has suggested this was a requirement among some of the smaller parties.)

Appointing a new government will also require a formal end to the current government, as the president has emphasised today. Rather than simply resigning as prime minister, it's possible that Ruak might force a confidence vote on the floor of parliament, which would certainly symbolise a deep breakdown between former allies.

The president's decision is expected in early March. Presuming the new government is duly installed, the next phase – presenting a new cabinet to the president – will be critical. The breakdown of the current government was the product of several factors, but primary among them was President Guterres's refusal to install nine CNRT and KHUNTO ministerial nominees, citing judicial inquiries into their misconduct or "poor moral standing." His stance produced a political stand-off now effectively in its eighteenth month, and resulted in an executive government dominated by ministers from the smaller AMP parties, the PLP and KHUNTO, despite CNRT's being the largest alliance party. A frustrated CNRT was never satisfied that Ruak prosecuted this issue with the president adequately, though it is difficult to see what else he could have done, short of resigning his commission.

The appointment of ministers to the new government is therefore critical to how the situation develops from here. If no compromise is possible between the president and new prime minister, then key aspects of the present stand-off are unlikely to change. Indeed, the president commented today that the new alliance should "think carefully" before resubmitting the same nine ministers. The solution may lie, as Jose Ramos-Horta has noted, in dialogue and compromise. In practice, it is likely the new PM will need to give ground on certain ministers to see an equivalent shift at the presidential end. For his part, President Guterres may now have to confront Gusmao himself as the prime minister, a more difficult task than dealing with Ruak, who maintained cordial relations.

The new government therefore sets the stage for a more overt constitutional confrontation between the two branches of the executive, and another chapter in Timor-Leste's challenging first experience of cohabitation between a Fretilin president and CNRT-led government.

Looking ahead, Gusmao is known to want an early election, and opposition leader Mari Alkatiri has made public his belief that the new alliance will force an institutional crisis to bring this on. If there is no movement on the ministers, it is certainly possible Gusmao could protest by resigning his commission as PM and sending the country to the polls.

Several complicating factors exist. First, the smaller parties of the new coalition are openly unenthusiastic at the prospect of another early election, and won't be keen to renounce the ministries they will be awarded for joining the alliance. The narrow majority will also give them considerable sway inside the new alliance. That said, Gusmao's authority will be considerable, especially in its early months, and he may well get his way.

Second, of course, such an action could open the door to an alternative alliance with Fretilin and PLP at its core. Beyond this is the wider question of whether an early election would materially alter the stand-off. Notably, the president's term runs to early 2022, a little over two years away, and parliament can't be dissolved in his final six months.

In terms of the wider politics, Saturday's announcement highlights several interesting points. Xanana Gusmao has once again demonstrated his authority over a range of smaller East Timorese parties and his enviable reputation as a coalition builder. For its part, Fretilin once again fell short of building a majority despite its relatively promising position.

At the same time, Gusmao has now lost a major ally in Ruak and the PLP. Beyond the issue of ministerial appointments, other tensions exist between PLP and CNRT, including the way development ministries and processes have been run by the government, and the absence of Gusmao from day-to-day decision-making. In the end, the AMP collapsed under these pressures, and Ruak is widely known to feel humiliated and angered by his treatment in the budget vote. The PLP now has notably friendlier relations with Fretilin, which could have important implications in future elections, but it is also true that a six-party alliance could prove considerably more difficult to manage than a three-party one. How all this plays out before the regular 2023 elections – or any early election – will be closely watched.

[Michael Leach is Professor of Politics and International Relations at Swinburne University of Technology.]

Source: https://insidestory.org.au/back-to-the-future-in-dili