SpecialReport: Timor Leste still struggling with poverty

Mon, 08/31/2009 11:55 AM  |  Special Report

With the 10th anniversary of UN-sponsored "Popular Consultation" that gave East Timor independence falling on Sunday, Aug. 30, The Jakarta Post's Pandaya and Kupang-based correspondent Yemris Fointuna highlight the current issues facing the nascent democracy in Dili.

"Ah, a traffic light!" exclaims Indonesian Somba Pawira, as the old blue taxi taking him from Comoro International Airport, just outside Dili, stops at the corner of a main street in the capital city.

The sight of the traffic light flabbergasted Somba, whose previous visit was in 2002, when the country declared its independence. Back then, Dili was a one-horse beachfront town whose paucity of motor vehicles meant no traffic lights were needed.

Ten years on since becoming an independent state, following 450 years of Portuguese rule and another 25 under Indonesian control, Dili is showing signs of modernization.

Parts of the capital now glitter with symbols of the modern lifestyle: shopping malls, car showrooms and a property boom. A brand new Presidential Palace stands proud close to the recently renovated old-fashioned government building complex, a legacy of the colonial era.

The omnipresent luxury SUVs of the United Nations, here since 1999, stand out among those of the country's wealthy elite, clogging up the main streets during rush hour.

Timor Leste remains impoverished and dependent on foreign handouts to survive. In fact, little has changed for the better in terms of social conditions since the former East Timorese voted for independence in the 1999 referendum that led to widespread violence and mayhem by militias with the backing of the Indonesian military.

The subsequent proclamation of independence on May 20, 2002, brought a euphoria that has not yet been rewarded.

Poverty remains the most serious problem in the country of 1.1 million people, although tackling it remains at the top of the government's 2002 national development program, along with economic growth, improving health services and education.

The country ranked 158th out of 179 in the latest UNDP human development index report, below other developing countries like the Democratic Republic of the Congo, Sudan and Angola. Forty-nine percent of the population lives on less than US$1 a day. According to 2008 statistics, the country's GDP was $459, and per capita income was $440.

Of the UN's long list of millennium development goals for 2015, only basic primary education and promotion gender equality look likely to be met.

Lack of access to basic services, such as electricity, tapped water and food supply, plagues the estimated 80 percent of the population living in rural areas. Poor health services are blamed for the high child mortality rates: 136 out of 1,000 children die before the age of 5. The life expectancy is only 55.5 years, the UNDP notes.

"The root of the problem is the corruption that occurs at all levels of society," says Arsenio Bano, a member of parliament from the opposition Fretelin group.

"With a state budget of between $700 million and $800 million a year, poverty could have been reduced."

The 2008 Transparency International corruption perception index report shows Timor Leste as among the most corrupt nations in the world, sliding to 123rd from 145th - not a bad showing, however, considering Indonesia, independent for 54 years more than Timor Leste, is in 126th spot.

Sisto Dos Santos, from the Timor Leste Students Front, says neither parliament nor the Xanana Gusmao coalition government has been paying serious attention to the people's well-being. He points out infrastructure such as roads connecting the 13 regencies across the country remain in a sorry state, making the country unattractive to investors.

"When the 2008 global economic crisis hit the country, the parliament and the government were busy fighting over luxury cars," he says.

"There are government employees who earn only $200 to $300 a month, but they own cars that cost $20,000 to $30,000. It's easy to guess how they got the money."

Xanana, an independence fighter likened by his admirers to Che Guevara and Nelson Mandela, is at the center of a corruption scandal that has seen him accused of awarding a $3.5 billion rice contract to a company that his daughter, Zenilda Gusmao, owns an 11 percent stake in. His foes are now calling for his resignation.

On Aug. 6, Timor Leste Ombudsman of Human Rights and Justice Chairman Sebastiao Ximenes alleged that Justice Minister Lucia Lobota was involved in a corrupt deal, and demanded that she resign or be fired.

But the government has said all the reports of corrupt contracts were based on half-baked information without any supporting documents.

The unemployment rate remains high, some estimates putting it at more than 40 percent, raising fears of worsening social and security problems.

Timor Leste relies heavily on the export of natural commodities, including coffee, sandalwood and marble. Arabica coffee is the main export commodity, contributing $20 million a year to state revenue.

"While the government is unable to stabilize prices in rural areas, money circulates only in Dili, making residents in far-flung villages unable to obtain access to the market and sell their agricultural produce," says Faustini Cardoso Gomes, from Timor Leste National University.

The long-cherished windfall from oil and gas deposits in the Timor Sea, being jointly explored with Australia, has yet to come in, with critics accusing the latter of bullying Timor Leste out of much of the income.

La'o Hamutuk (the Timor Leste Institute for Development Monitoring and Analysis) has been urging Dili to renegotiate the deal with Australia and seek a larger share.

The two countries have begun joint development of the oil fields at Bayu Undan, of which Timor Leste gets 90 percent. In the Sunrise block, the two countries have settled for a 50:50 split, and still await interested buyers to commence operations.

MP Bano says the country has so far reaped $5 billion from the Bayu Undan oil field, but the government has no clear-cut plans for using the money to transform the economy from a subsistence one into one with real growth and development options.

"More than half the population still lives below the official poverty line *of 55 US cents a day*," he says.

Elsewhere, the government has rolled out free high school and health services for citizens, to speed up human resource development. The best and the brightest have been sent overseas to study. Wealthy parents are encouraged to send their children to study abroad too, and many have opted for Indonesia for cheaper education.

Over the past five years, 500 students have been sent to Cuba to study medicine, sponsored by the state. By the year 2020, each village across the country is expected to have one doctor.

But jobs are hard to come by once these students return. Some non-Portuguese-speaking jobseekers complain about the difficulty of getting a job as a civil servant. But a government official, speaking on condition of anonymity, denies the allegations, saying fluency in the Portuguese language is not obligatory.

While Timor Leste has enjoyed relative stability since the 2006 bloody uprising that led to an assassination attempt against President Jose Ramos Horta, security remains a key issue. The acute poverty and high unemployment rates can fuel discontent and social unrest.

The country's main hopes to fund development now lie with its coffee exports and oil and gas revenue. Sustaining these will eventually wean the young democracy off foreign donations and pave the way for the planned UN withdrawal by 2012.

And then only a few UN trucks would continue rumbling down Dili's streets.

source: http://www.thejakartapost.com/news/2009/08/31/specialreport-timor-leste-still-struggling-with-poverty.html

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