FRETILIN: Growing opposition to Gusmão’s maladministration and bad governance



Media release
19 July 2008

There is growing opposition to the misadministration and corruption of
the Gusmão government with members of a key parliamentary committee
and a key independent parliamentary consultative body rejecting the
government’s request to withdraw from the Petroleum Fund an amount
greater than the benchmark “sustainable income”*.

The defacto Gusmão government wants the additional money from the
Petroleum to fund a revised budget.

FRETILIN parliamentarian and leader in parliament Aniceto Guterres
said, “The Economy, Finance and Anti-corruption parliamentary
committee met yesterday (Friday 18 July) and delivered a report on the
mid year budget recommending against the government’s request to
withdraw USD$290 million in excess of the sustainable income amount.

“The decision of the parliamentary commission comes in addition to the
Petroleum Fund Consultative Council’s recommendation to National
Parliament that it refuse to authorize the transfer of funds from the
Petroleum Fund to the government budget because the government has
failed to justify that it needs the extra money from the Fund.”

The Petroleum Fund Consultative Council is an independent body that is
legally mandated to oversee the workings and future of the fund and is
made up of civil society and representatives of religious confessions.
The members of the Council are independent from any political party.

Guterres said, “The decisions of the parliamentary committee and the
Petroleum Fund Consultative Council reflect the wide spread and
growing concern and suspicion about misadministration and corruption
within the Gusmão government.

“Even members of Gusmão’s own CNRT party who sit in the parliamentary
committee voted against the government’s request.

Guterres added, “The Gusmão government has only actually spent 22%, or
USD$77.3 million, of this year’s annual budget of USD$347.7 million,
which is the largest in Timor-Leste’s history and far greater than any
of the budgets of the previous FRETILIN governments.

“It is ludicrous that a government that is incapable of spending even
a fraction of the budget, and who is also the subject of many
allegations of maladministration and corruption, would ask for a mid
year budget increase in the amount of USD$425.6 million (taking this
year’s revised budget to USD$773.3 million).”

Guterres said that if the excessive withdrawal from the fund is
approved by parliament, the government would have used over USD$1
billion in just 1 year when you take into account that the government
also had a transitional budget of in excess of $300 million for the
period between September 2007 to 31 December 2008.

“This will mean that 43% of the Petroleum Fund’s current reserves of
USD2.3 billion will be spent in just one year.

“We call on other members of parliament and civil society to follow
the lead of the Economy, Finance and Anti-corruption parliamentary
committee and the Petroleum Fund Consultative Council in expressing
their opposition to this irresponsible budget.

“It is not only them or FRETILIN which have expressed concern. Other
political parties, including the National Unity Party, ASDT and
KOTA/PPT, as well as business groups and civil society in general have
expressed their opposition to this irresponsible and questionable
budget. But mostly they question the raiding of the petroleum fund
which has been acclaimed around the world.

“If the AMP members in the parliament authorize the withdrawal, then
they will be flying in the face of overwhelming public opinion in this
country. We urge them to question this government’s direction, just as
they did with the government’s ludicrous gun laws that were defeated
in this parliament, which was out of step with public opinion on the
issue” said Guterres.

The Timor-Leste parliament began debate on the government’s proposed
budget revision yesterday (Friday 18 July).

Background notes:

*The Sustainable Income (known formally as the “Estimated Sustainable
Income”) is calculated under the Petroleum Fund Law and informs the
Government, National Parliament and civil society of the maximum
amount of money that should be withdrawn from the Petroleum Fund in
any given year to fund government spending. The Estimated Sustainable
Income for the 2008 budget is USD$396.1 million.

If the government wants to withdraw more than the Estimated
Sustainable Income it must first obtain the approval of National
Parliament. As part of that approval process, the Government must set
out its reasons why its total annual withdrawals from the Petroleum
Fund should exceed the Estimate Sustainable Income and present them to
the Petroleum Fund Consultative Council who in turn provide their
opinion to National Parliament.The aim of the Estimated Sustainable
Income is to assist Timor-Leste avoid the “resource curse” experienced
by other Third World resource rich nations. It does this by acting as
a guide to Timor-Leste on how to spend its petroleum wealth
sustainably with the aim of creating inter-generational equity so that
both current and future generations can enjoy the benefits of the
petroleum resources.

For more information, please contact:

Jose Teixeira +670 728 7080


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