Monthly Archives: July 2011

Northern Ireland violence drives out East Timorese families

Terrified families from East Timor flee as loyalists attack nationalist homes in Portadown in marching season clashes

Staff and agencies, Saturday 16 July 2011 15.50 BST

Immigrant families from East Timor fled a Catholic area of Northern Ireland on Friday night when loyalist rioters tried to attack nationalist homes, a Sinn Fein councillor said today.

“Around 100 loyalists attacked police who prevented them attacking nationalist homes,” said John O’Dowd, who is a member of the Northern Ireland Assembly.

The families from East Timor packed their bags and ran from their homes in Portadown, Co Armagh on Friday night, when the area was engulfed in violence, he said.

“They packed their bags, so distressed were they at the violence. Their neighbours tried to reassure them that they would be safe in their homes but they left,” he told Reuters.

A significant number of families from East Timor have settled in the Northern Irish town, where they work in the food packing industry alongside many Poles and Portuguese.

For several hours, police were attacked by people armed with petrol bombs, bricks, bottles, fireworks and other missiles in the latest violence surrounding the high point of the loyalist marching season.

The police fired around 20 plastic bullets and arrested three people. They confirmed that loyalists provoked the violence when a planned peaceful protest was hijacked by a violent minority.

The Mayor of the local Craigavon council, Democratic Unionist Alan Carson, condemned the violence.

“This does not do anyone any good. People have a right to live peacefully and feel safe in their own homes. The violence we saw last night is something we assigned to the history books,” he said.

In recent days, nearly 50 police have been wounded and dozens have been arrested during violence in both loyalist and republican areas surrounding the annual 12 July parades.

More than 500 parades were held on Tuesday across Northern Ireland, the high point of the Orange Order marching season celebrating the victory of Protestant King William of Orange over Catholic King James at the Battle of the Boyne in 1690. The majority passed off peacefully but they sparked outbreaks of street violence.

Taur Matan Ruak to run for President

Tempo Semanal-14/07/2011

Taur Matan Ruak Xefe Estadu Maior das Falintil
(philip Blenkinsop)
Reliable Tempo Semanal souces said that the Chief of the East Timorese Defence Force, FALINTIL-FDTL has strongly indicated in public and in private that it is his intention to soon resign from the defence force because he intends to run in the 2012 Presidential election.

Ruak’s most serious competition on the Presidential elections likely includes FRETILIN’s President Fransisco “Lu Olo” Guterres, current President Jose Ramos-Horta, and the President of the National Parliament Fernando Lasama. Some indications include that Deputy Prime Minister Jose Luis Guterres will also candidate himself.

According to Tempo Semanal sources General Ruak will resign from the national defence force by the end of the year and quickly announce his candidacy as a civilian citizen for the Presidency in early 2012.

According to Tempo Semanal sources, General Ruak informed the President of the Republic Jose Ramos-Horta in late June 2011 that it was his intention to run for the Presidency. President Ramos-Horta indicated to General Ruak that it was 90% certain he would not run for the Presidency again. According to TS sources President Ramos-Horta shortly afterward met with Prime Minister Xanana Gusmao and the Secretary-General of FRETILIN Mari Alkatiri and informed them that General Ruak intended to resign from the defence force and candidate himself for Presidency.

After hearing that General Ruak intends to run for the Presidency on 22 June 2011 President Ramos-Horta indicated that he is almost certain he will not seek re-election.

Taur Matan Ruak with Falintil Guerrilla 1998

General Ruak is known to have strong popularity in the ranks of the FRETILIN Opposition but is also known to have strong ties to Prime Minister Xanana Gusmao based on common experience in the guerrilla struggle. General Ruak’s position as a military officer has been carefully independent of political party position, but it is known that he privately questions the agendas of many civilian political leaders. According the TS sources General Ruak understands that he can only play a role in national politics as a civilian, so he must resign from the defence force.

Major-General Taur Matan Ruak is a 24-year veteran of the armed struggle against Indonesian occupation between 1975 and 1999. However, he is not of the older generation who played leadership roles in the 1975 civil war. He is both of the past and the present and the future.

General Ruak was a field commander in FALINTIL during the 1980s and 1990s. After Xanana Gusmao the commander of FALINTIL was captured in 1992 and later on Konis Santana was declared field commander in 1993 Ruak was appointed Chief of Staff of FALINTIL with responsibility for military operations.

After Santana died in March 1998 Ruak was appointed field commander of FAILINTIL.

In 2000 upon the resignation of now Prime Minister Xanana Gusmao from FALINTIL, Ruak became commander of FALINTIL.

On 1 February 2001 FALINTIL was transformed into the modern defence force FALINTIL-FDTL.

Between 2001 and 2006 Ruak was the lead uniformed defence leader in Timor-Leste under the civilian leadership of the FRETILIN government. Ruak came under considerable pressure in 2006 and 2007 for the real and perceived mistakes made by the defence force during the crisis.

Since 2007 under the civilian leadership of Prime Minister Xanana Gusmao and the Secretary of State for Defence Julio Pinto, Ruak has made many changes in the defence force. Numerous soldiers have been rewarded from professional success and a large number have been dismissed for misconduct and even crimes that the civilan justice system cannot process. The defence force is also in a stage of advanced development regarding naval and even air components and is soon the join international peacekeeping efforts in Lebanon in the UN peacekeeping mission UNIFIL.

General Ruak “Jose Maria Vasconselos” is from Baguia subdistrict in Baucau. He speaks Makassae, Naueti, Tetun and Portuguese. He is also a self-taught English speaker. He is known, as being a strong-minded frontal personality who has conviction is positions. General Ruak was recommended for prosecution by the UN Independent Commission of Inquiry into the event of the crisis of 2006. He is also known to have fully cooperated with this commission in its fact-finding efforts. He was subsequently cleared of allegations.

General Ruak is married to Isabel Ferriera of Manufahi District and has three children, two daughters and one son.

FRETILIN, PUN MPs Walk Out, Development Plan Approved


DILI, 12 July 2011

*FRETILIN, PUN MPs Walk Out, Development Plan Approved*

DILI: The government’s draft of the National Strategic Development Plan was
approved yesterday by the parliament after MPs from FRETILIN and the
National Unity Party walked out of the discussion session.

The plan was supported unanimously by the 38 MPs – members of the alliance
group and PPT, and an independent – who remained sitting in the parliament
session after the opposition MPs left.

The alliance group, comprised of CNRT, PD, PSD, ASDT and UNDERTIM, approved
the 2011-2030 development plan.

FRETILIN Chief Aniceto Guterres said his party left the discussion because
the parliament was not given enough time to consider and debate the draft.

He also said his group disagreed with CNRT MP Pedro da Costa’s declaration
that consensus between all parties and civil society organizations was

The strategic plan concerned not only the opposition and the government, but
the entire nation, he said.

“The opposition works hard (to cooperate to discuss the issues) but (the
alliance group) continues not to listen, so there is no time (for FRETILIN)
to be in this place to discuss,” Mr Guterres told the parliament before his
group left the session.

“The parliament needs time and a consensus among the political parties,
civil society and others (so that) it can be implemented (well) in the

Mr Guterres said his group believed there would be problems with the plan’s
implementation because some programs were not outlined clearly.

National Unity Party President Fernanda Borges said her party was also
dissatisfied with the timeline.

Ms Borges said, under the laws of parliament, the government should have
given the draft plan to the parliament’s Commission C to look at before it
was brought to the general discussion for approval.

Before leaving the parliament, Ms Borges told the session her party would
approve the plan if there was consensus between all parties and other
important institutions in Timor-Leste.

She said the plan represented the alliance group’s point of view.

After the opposition MPs left the discussion, Prime Minister Xanana Gusmao
said he did not understand what system of democracy the two opposition
parties believed in.

Mr Gusmao said the plan was not his own, but for all Timorese.

“I heard some said the plan was mine. It is not mine,” he said.

Every country had national development plans to guide the long-term
development process, Mr Gusmao said.

The people of Timor-Leste wanted to experience the reality of development,
he said.

UNDERTIM MP Faustino dos Santos ‘Renan Selak’ said his party trusted the
government, especially Mr Gusmao, to implement the national strategic plan
to liberate Timorese people from poverty.

PD President Adriano do Nascimento said the government needed a plan to
develop the country.

“The dream will be implemented with concrete action through national
development to change people’s lives (for the) better,” Mr Nascimento said.

CNRT MP Aderito Hugo da Costa said the plan was good because it would guide
national development.

PSD MP Vidal de Jesus said the plan was necessary and it was important to
implement it in Timor-Leste.

Mr de Jesus said, with his experience leading the national resistance to
independence, Mr Gusmao could also develop the country.

Jose A. Fernandes Teixeira
Deputado da Bancada Parlamentar da FRETILIN
Parlamento Nacional da Rep. Dem. de Timor-Leste
Telemovel: +670 728 7080

Member of Parliament – FRETILIN
National Parliament of the
Democratic Republic of Timor-Leste
Mobile: +670 728 7080

LH: Summary of comments on Strategic Development Plan


La’o Hamutuk preliminary analysis of the
Strategic Development Plan as presented to Parliament

11 July 2011
This is a summary of La’o Hamutuk’s initial analysis of the Strategic Development Plan. Although we only received it 5 days ago, the Government demands that Parliament approve it today, so we prepared comments to inform their discussion and the Development Partners Meeting. Our 13-page commentary is available at The main points we wrote about, in addition to pointing out omissions, errors and invalid assumptions, follow:
The Strategic Development Plan (SDP) is an important document, and is greatly improved over the version circulated last year. However, it is a large document, with many new ideas, and deserves thorough discussion before being enacted. We find it irresponsible that the Council of Ministers approved it after an all-night meeting, and it would be unconstitutional for Parliament to approve it less than a week after they received it.
The Plan includes a welcome focus on social capital, not only physical infrastructure as pervaded last year’s discussions. We hope that future budget priorities reflect this, and that some of the 52% of the 2011 State Budget allocated to physical infrastructure will be redirected to education and health.
We agree that a plan is not a budget, but it needs to be more than a dream, and should include more information about what it will cost and where the money will come from. In particular, we are concerned that the SDP will be financed by taking out loans, but there is only a passing reference to this in the document, with no specifics.
The SDP totally ignores Timor-Leste’s mammoth trade deficit, with little priority to reducing imports. It includes incorrect information about school enrollment, inflation, and petroleum dependency. It is unjustifiably optimistic regarding possible future oil discoveries, exports to ASEAN, reducing population growth,.
The SDP should focus more on human and intellectual infrastructure for education (buildings are not enough), improving the quality as well as the quantity of education, and supporting the needs of Timor-Leste and our people, not just possible employers.
The SDP’s positive discussion of environmental protection is threatened by a number of environmentally dangerous projects currently underway with no environmental review.
More analysis, information and priority should be given to renewable energy.
Land laws must recognize colonial injustices, and titling systems should not endanger land rights or discriminate against cash-poor farmers. More consultation is needed on the Land Law, and the Law and the SDP should consider the true value of land for people, not only its use by investors.
Economic justice for all our people, not only the eradication of extreme poverty, should be the plan’s economic objective.
Agriculture should promote food sovereignty. Organic, sustainable agriculture, growing products for local consumption, should be the priority, and farmers must be involved at every level of decision-making and implementation. The “Green Revolution” model of industrial, high-input agriculture has severe negative impacts in the long term.
Timor-Leste needs a broader vision of economic development. Since there is consensus that Timor-Leste needs to move away from oil-dependency in the long-term, we are disappointed that petroleum processing is the only industrial development discussed. What about agricultural processing, or light industry to replace imported products? The capital-intensive oil industry will provide few jobs for anyone, including Timorese. Allocating most of our intellectual and financial resources to the petroleum sector obstructs moving to a non-oil economy after oil and gas reserves are used up in 13 years.
Current processes to revise the Petroleum Fund Law, create the TimorGAP national oil company, and invest heavily in feasibility studies for the Tasi Mane Petroleum Corridor contradict the goals of the plan and exacerbate our dependence on petroleum and the danger of long-term economic instability. They need to be undertaken with more care, and balanced against ideas and needs of other sectors.
Increasing tourism requires more effort than merely building physical infrastructure.
Private sector investment should provide benefit, not use up people’s resources. Tax cuts, special economic zones and other favors for foreign businesses are unlikely to produce advantages for our people. State investment in business activities, such as Tasi Mane and rice importation, needs more careful analysis of its costs and benefits.
The security sector plans should serve the national interest. Human and budgetary resources spent on F-FDTL can be reallocated as external threats become smaller.
Public Sector management and good governance will be strengthened by designing institutional structures to resist corruption, and by having all state agencies use strengthened, government-wide systems for budgeting, procurement, hiring, salaries and public information.
Although the Macroeconomics section is better than earlier drafts, it is still weak, and needs more focus on the temporary nature of non-renewable resource wealth revenues. It should be more honest about oil dependency, inflation, population growth and plans for future spending and borrowing to finance this plan.
It is inconceivable that Timor-Leste can achieve real, long-term, annual non-oil GDP growth of 11.3%, higher than any country in recent history. Other than China, the best performing countries have grown 6.5% – 7.5%, and it is wishful thinking to expect Timor-Leste to grow nearly twice as fast as they could. Current rapidly escalating levels of public spending, the primary driver for our economy, are impossible to sustain.
Additional information, including the proposed SDP and the full text of our comments, is available from La’o Hamutuk’s website:

La’o Hamutuk (The Timor-Leste Institute for Development Monitoring and Analysis)
P.O. Box 340, Dili, Timor-Leste (East Timor)
Telephone: +670-3321040 or +670-734-0965 mobile
email: website: blog: skype: cscheiner

East Timor’s Petroleum Fund in Danger

By Tim Anderson

Substantial changes proposed for East Timor’s Petroleum Fund law will expose the nation’s finances to high risk and open the door to corruption.

Just a few years ago the Fund was widely praised as a model of prudential and sustainable management, and a means of possibly escaping the ‘resource curse’ of waste and corruption (e.g.NYT 21 Feb 2006). That is all about to change.

The AMP Government, led by Xanana Gusmao, has a bill before East Timor’s parliament (Proposta de Lei No. 52/2011) which removes most of the prudential controls on the Fund. Under the new law, up to half the country’s Fund (several billion dollars) can be handed over to foreign fund managers for investment in volatile stock markets. The oversight role of parliament will be largely abolished and transferred to ministers and investment advisors. The Fund will be set up as collateral for debt instruments and its special status outside state finances will be removed. Finally, the rate at which the Fund’s revenues can be withdrawn by the government will be opened up. All the major prudential controls of the original law (Articles 7-9, 14-15 and 20) are to be dismantled.

These proposed changes come in context of uncertain international finance markets and in the wake of domestic corruption scandals over rice, infrastructure and service contracts. Waste has become endemic. Secretary of State for Public Works, Domingos Caero, acknowledged that that “about 60 per cent” of the 2009 ‘Referendum Package’ projects were “of bad quality”.

The AMP’s draft law would take the country’s fund regime from one of the most conservative to one with the least protection from risk, fraud and malpractice. Most other sovereign wealth funds (e.g. Australia’s Future Fund, Brazil’s Fundo Soberano, Botswana’s Pula Fund, Trinidad and Tobago’s Heritage and Stabilisation Fund) maintain tighter controls on their assets.

Greater exposure to equities has been taken on by those funds (e.g. of Singapore and Norway) which have developed strong ‘in house’ financial management expertise, and are thus less exposed to external operators. While the Norwegian fund (NBIM) now allows up to 50% investment in equities, this fund operated under strict limits for its first ten years, then gradually expanded its more risky investments, maintaining mostly ‘in house’ management and legal controls. Moving Timor Leste’s fund more rapidly to 50% equity exposure and with reliance on external fund managers implies far more risk.

It was only a few years ago that the then well regarded company Goldman Sachs was charged with a massive fraud involving misleading advice to investors. Financial crises are precisely the time when small investors are cheated of funds.

A great deal is at stake. The IMF earlier this year described Timor Leste as “the most oil-dependent economy in the world”. The government budget in 2010 (ignoring foreign aid) depended almost 90% on draw-downs from the Petroleum Fund. With further waste and possible losses through risky operations by the external fund managers, the Fund could diminish and state budgets would contract.

There is indeed a case for amending the Petroleum Fund law, largely due to the steady decline in the US dollar, low returns on US bonds and ongoing financial uncertainties in the US. In these circumstances it does not make sense (as required by Articles 14-15 of the current law) to hold “not less than” 90% of Fund investments in US dollar denominated bonds.

Nevertheless, a diversification in secure and higher return bond investments (now being carried out by all major investors in the world) and some more modest moves into wider investment would not pose anything like the risks of the current proposal.

In the drive to risk more and spend more of the Fund, Finance Minister Emilia Pires has called on support from former World Bank official Jeffrey Sachs and consulting firm Towers Watson.

Jeffrey Sachs, famous for his ‘big money’ approach, has supported greater spending. (Indeed, East Timor’s annual budget of only about $100m in 2005 rose to nearly a billion last year.) This Neo-Keynesian line suggests that government spending can stimulate new rounds of economic activity. The idea has some relevance in highly formalised economies, at times of recession; but it does not well address the capacity building needs of developing countries.

Nor does the idea of throwing more money around address the problems of a small country already facing serious issues of waste and corruption. Major-General Taur Matan Ruak, Chief of Timor Leste’s Defence Forces, last year asked Jeffrey Sachs to explain how the international aid of more than $12 billion over the past decade had not led to noticeable improvements in employment and poverty. According to Tempo Semanal (5 April 2010) Sachs replied “”I think this is difficult for me to give an answer but I think the international experts need to consider this question with seriousness and I myself will look at the implementation process closely.”

Towers Watson, for its part, has pushed for high level, offshore stock market investments. However this company and its predecessors has been successfully prosecuted for misleading advice, malpractice and breach of contract. Common themes have been that the company had been negligent in its advice, made serious errors in calculations of fund liabilities and concealed conflicts of interest – and that this cost pension funds millions of dollars.

Some of these cases help illustrate the dangers of handing over millions to external managers. In 2001 a US jury found there was actuarial negligence by Towers Watson predecessor Watson Wyatt. The Connecticut Carpenters Pension Fund was awarded $39 million damages. The jury found that Watson Wyatt “was negligent, committed malpractice and breached its contract with the Fund”. Watson Wyatt made serious errors in calculating the Fund’s pension liabilities.

In 2004 the U.S. Department of Justice launched an investigation of actuarial consulting firms, including Watson Wyatt, Towers Perrin, and others. Subsequent claims for actuarial negligence (including ‘anticompetitive agreements or understandings’ involving conspiracies against their clients) covered a period of more than 20 years and sought damages of $2 billion. This case was ultimately settled.

In 2007 Watson Wyatt agreed to pay $110 million to settle a 2004 negligence lawsuit filed by trustees of the Iron Workers Local #25 pension fund (Michigan). Despite the settlement, the case carried on through 2009. After Watson Wyatt revealed to the Ironworker’s Pension Fund lawyers that “the pension plan was not performing as well as previously indicated”, those lawyers found two other actuarial negligence cases and decided to sue Watson Wyatt, claiming damages of more than $100 million. There are a number of other unresolved and failed claims against the Towers Watson and its predecessors.

The AMP government’s proposed amendments to the Petroleum Fund law, by dramatically downgrading prudential controls and oversight, opens the door to such losses.

Yet, as there is a case for amendments to the law, what are the alternatives?

More reasonable, lower risk fund reform options can be found in: (a) A focus on diversified bond investment – reforming the law to allow secure bond investment in currencies other than the US dollar (e.g. Euros, Australian dollars, Chinese Yuan); and (b) A more modest ceiling of perhaps 20% on higher risk direct investments, while linking diversification of investments to the growth of domestic financial management capacity. Diversification of bond investment alone, in current circumstances, could allow a doubling of returns on fund investment.

At its inception, when there was virtually nothing in the Petroleum Fund, it was easy for everyone to support it as a model of prudence and commitment to future generations. Now that the Fund holds more than $7 billion it has become a ‘honeypot’, and the ‘bears’ are circling. Timor Leste is more vulnerable than most to being cheated of its resources; the country should take great care of its chief financial asset.

Dr Tim Anderson is a Senior Lecturer in Political Economy at the University of Sydney and has acted as adviser to Timor Leste’s Consultative Committee for the Petroleum Fund.

Gusmao MPs trying to shut down criminal trial of Deputy PM and Minister



Dili, 13 March 2011

Gusmao MPs trying to shut down criminal trial of Deputy PM and Minister

Timor-Leste politicians allied to the Gusmao government are trying to
shut down criminal prosecution of two ministers accused of official
misconduct and corruption, FRETILIN’s parliamentary spokesperson and MP
Jose Teixeira said today.

Mr Teixeira said two district courts have separately summoned Deputy
Prime Minister Jose Luis Guterres and Minister for State Administration
Arcanjo Leite to answer criminal charges brought by the Prosecutor
General’s office.

“The trials cannot proceed unless parliament lifts the ministers’
constitutional immunity from prosecution, as the courts have
requested,” Mr Teixeira said.

“However Parliament’s committee on ethics, controlled by MPs belonging
to Prime Minister Xanana Gusmao’s AMP coalition, recommended that
parliament not suspend them,” he said.

“Government MPs then succeeded in deferring a parliamentary vote on
whether to suspend the pair until 5 April 2011.

“Voting will be by secret ballot and there is little doubt the majority
will refuse to lift immunity. This will be another nail in the coffin
for the rule of law in Timor-Leste.”

He said the accused ministers would automatically lose their immunity if
Prime Minister Gusmao removed them from their posts, “but this
self-proclaimed corruption fighter appears unwilling to risk further
infighting within his coalition by doing so”.

The Dili District Court has summoned Deputy Prime Minister Guterres to
be tried on charges of corruptly using his official position to
financially advantage his wife.

Baucau District Court has summoned Minister for State Administration
Arcanjo Leite to face trial on charges of willful damaging

Mr Teixeira said government MPs were promoting a culture of impunity for
high officials and their connections and weakening the justice system by
slandering the Prosecutor General’s office, which includes local and
foreign jurists, with unfounded accusations of political bias.

For further information contact Jose Teixeira MP on +670 728 7080


SEARCH Foundation

Level 3, 110 Kippax St,

Surry Hills NSW 2010, Australia

Ph: +61 2 9211 4164; Fax: +61 2 9211 1407

ABN 63 050 096 976

promoting democracy, social justice and environmental sustainability