East Timor vice-PM quits over Dili 'failures'

A leading East Timorese critic of Julia Gillard's proposed asylum-seeker processing centre has quit as second Vice-Prime Minister.

Veteran parliamentarian Mario Carrascalao -- a member of the minority Social Democrat Party (PSD) -- resigned after a long-running spat with Prime Minister Xanana Gusmao, citing a growing lack of accountability by the government in Dili.

Ms Gillard sparked a diplomatic row early in her prime ministership when she announced plans to build a regional processing centre in East Timor after only preliminary discussion with President Jose Ramos Horta, who is a ceremonial head of state.

Dili-based diplomatic sources said Mr Carrascalao's resignation was unlikely to affect negotiations for a refugee processing centre, opposed by many East Timorese MPs.

Speaking by telephone from Dili, Mr Carrascalao, a former Indonesian-era governor, accused Mr Gusmao of being increasingly out of touch and inaccessible.

He rejected charges of incompetence by Mr Gusmao, linked to a budget underspend, saying there was too little accountability on the disbursement of funds 98 per cent derived from Timor Sea oil and gas revenue.

"For months I've been asking for a meeting with the Prime Minister because our law says we should have meetings twice a month between the Prime Minister and the Deputy Prime Ministers," he said.

"This never happened and so it's been difficult to report to Mr Gusmao to explain what his Deputy Prime Minister has been doing."

His resignation letter -- a copy of which was received by The Australian -- alleges widespread corruption under Mr Gusmao.

"Corruption, nepotism and collusion, commonly known as KKN, continue to stridently increase, with the corrupt protecting one another, in an increasingly sophisticated way," it says.

"Everyone talks about fighting corruption, but when the moment of truth arrives only a few, a very few, have the courage to maintain themselves in the front line."

In a 29-point critique, Mr Carrascalao blasted the government's failure to invest in human infrastructure such as schools and hospitals and accused Mr Gusmao of allowing the economy to be dominated by foreigners.

The PSD has had a troubled relationship with the Gusmao-led Parliamentary Majority Alliance government, despite holding two other senior cabinet portfolios, Foreign Affairs and Justice.

Foreign Minister Zacarias da Costa, a friend of Australian Foreign Minister Stephen Smith, has also been threatened with the sack by Mr Gusmao.

Calls have also been made for Justice Minister Lucia Lobato to resign over procurement conflict of interest allegations.


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