DILI – Across the city, banners and posters signal the new country’s increasing integration with the world outside, heralding events such as Timor-Leste’s hosting of the EITI (Extractive Industries Transparency Initiative) regional conference over August 25-27.
Timor-Leste was designated the first Asian country to match up to EITI standards on accountability in and management of its energy resources. According to World Bank Managing Director and former Indonesian Finance Minister Sri Mulyani, speaking at the EITI event, “Timor-Leste, as a nation, is building strength and economic resilience and has demonstrated how much can be won in a short space of time.”
The EITI is a voluntary mechanism, usually backed by member countries passing relevant laws. According to itself, the EITO “supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining.”
The plaudits from EITI and the World Bank are a notable achievement for East Timor, which as recently as 2006 teetered on the brink of civil war. However, concerns remain about corruption among the country’s politicians and officials, with public displays of ostentation such as newly-bought expensive cars and big houses seemingly stoking resentment among ordinary Timorese, for whom the country’s energy-based economy is almost an abstraction.
“People ask, how can a civil servant who earns US$500 a month afford to buy his son or daughter a brand new SUV?”, said Rogerio Lobato, a former Interior Minister convicted of gun-running during Timor-Leste’s 2006 crisis, when 10% of the population was driven from their homes as security force factions fought on the streets. Mr Lobato intends to run for President in the 2012 elections in Timor-Leste.
For the country’s political leaders membership of the Association of Southeast Asian Nations (ASEAN) is a key foreign policy goal, superseding membership of or achievements within other international or regional organisations such as EITI.
President Jose Ramos-Horta banged the drum for his country’s accession in an article published in May as the the most recent ASEAN summit in Jakarta, capital of Timor-Leste’s former occupier Indonesia, weighed-up Dili’s request to join the bloc.
Ramos-Horta pointed out that his country outranks ASEAN members Burma, Cambodia and Laos in the latest United Nations Development Programme’s (UNDP) Human Development Index (HDI), a league table that lists countries by what the UNDP deems as “a development paradigm that is about much more than the rise or fall of national incomes.”
The President mentioned that Timor-Leste’s GNP per capita “increased 228 per cent” over 2005-2010 “to more than US$5,000.” The country’s economy is growing rapidly, as recent 10% per annum expansion figures show, but this is down to energy revenues coming online and Government spending on the back of the largesse.
However, non-oil/gas income per head is thought to be less than US$400 per person, and is a much more accurate reflection of poverty levels in Timor-Leste, where unemployment is high – reaching 40% among among urban youth. Migration to Dili threatens to see Port Moresby-type slums emerge on the city’s edges, where a deeply-rooted gang culture lives on and a controversial and tricky land law could see many of Dili’s residents be deemed squatters – and therefore vulnerable to eviction at any time – by the Government.
However, similar challenges are present – to greater or lesser degrees – in some ASEAN member-states, and to Timor-Leste’s allies inside the bloc, should not automatically disqualify the aspiring new member. In May, current ASEAN chair Indonesia recommended that Dili’s accession request be given “urgent attention” by the nine other ASEAN member-states. Singapore has been the sole ASEAN member to publicly-question Timor-Leste’s accession, saying that the former Portuguese colony, host to a long-standing UN mission and international peacekeeping force, is not yet ready to take on the bureaucratic workload that ASEAN membership requires.
There is broad agreement between the current Government in Dili – a multiparty coalition led by former anti-Indonesian resistance leader Xanana Gusmao– and the main opposition party Fretilin. Party spokesman and Fretilin MP Jose Teixeira told The Irrawaddy his party sought membership of ASEAN as far back as 1974, when Portugal ended its colonial rule, and said “we want everyone to know it is a bipartisan policy.”
However some in Timor-Leste agree with the Singapore line that it is too soon, just now, for Timor-Leste to join the ten-member southeast Asian bloc, which aims to establish an ‘ASEAN Economic Community’ by 2015.
Lao Hamutuk is a Dili-based NGO that monitors political and economic developments in Timor-Leste. It believes that ASEAN membership would swamp the import-dependent Timorese economy and hinder the development of the non-oil/gas economy. The oil/gas sector employs only a handful of Timorese but accounts for over 90% of the state budget, amid ongoing mass joblessness and what LH researcher Juvinal Dias describes as “almost no local production”.
“We cannot yet compete with other countries in economy or agriculture”, he adds.
Part of Singapore’s argument against Timor-Leste joining ASEAN sooner rather than later is historical – with some misgivings lingering over the accession of Burma, Cambodia, Laos and Vietnam in 1997. Timor-Leste argues that it is in better shape to join than any of this four were then, pointing not only to the UNDP data, but to its far-better democratic credentials.
However, Timor-Leste’s eventual accession to ASEAN may not be as productive as supporters of the move hope, or as damaging as opponents fear, if precedent elsewhere is anything to go by.
According to Sean Turnell, an academic at Macquarie University and founder of Burma Economic Watch, “ASEAN has had very little effect I would say on Burma’s economy- ie, in the sense of changing any patterns in investment, trade etc. These are all driven by much more fundamental forces than bureaucratic structures, but instead the availability of resources, at the right price, and so on. In other words, Thailand does not buy Burma’s gas because they are both members of ASEAN.”Show