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Withdrawal of aid forces winning project to fold

LINDSAY MURDOCH DARWIN

June 10, 2010

Jose Ramos Horta critical of AusAid's decision to cut funding that helps poor East Timorese entrepreneurs. Photo: Scott Mackinnon

THE President of East Timor, Jose Ramos-Horta, has attacked the Australian government's aid agency for forcing the closure of what he said was one of his country's few successful aid projects.

Dr Ramos-Horta said he would tell the Prime Minister, Kevin Rudd, in Canberra later this month that the "vast majority" of donor aid sent to East Timor was spent on consultants, study missions, reports and recommendations.

In a blunt letter yesterday to Peter Heyward, Australia's ambassador in Dili, Dr Ramos-Horta called on AusAID to reverse its decision to cut funding to a project operated by the Peace Dividend Trust that has re-directed at least $16 million to poor Timorese entrepreneurs.

Launched in 2007, the project centres on a "Buy Local, Build Timor-Leste" campaign that matches international and national buyers and domestic suppliers, steering aid directly into the Timorese economy.

Dr Ramos-Horta said the project had changed the way other countries operated in East Timor and provided "unique critical services that support our efforts to create employment and build a viable economy".

"Unlike most donor-funded projects, it produces tangible results, creates jobs and generates tax revenue," Dr Ramos-Horta said.

One of the project's main aims is to eliminate the role of international companies with rich aid contracts and highly paid foreign consultants.

It has been successfully replicated in Afghanistan and Haiti.

In the letter, a copy of which has been obtained by the Herald, Dr Ramos-Horta calls on AusAID to extend and boost its funding for the project and consider adopting a "Timor-Leste First" policy for Australia's aid program.

The Peace Dividend Trust issued a statement this week saying its matchmaking, training, marketing and tender distribution operations in East Timor's 13 provinces would begin to be phased out from July 1 unless additional donor support could be found.

An AusAID spokeswoman told the Herald sometimes difficult decisions had to be made about where to spend finite resources.

She said AusAID would provide funds so the Peace Dividend Trust project could link East Timorese businesses to opportunities through a business directory database until mid-2011.

Source: The Sydney Morning Herald