[Kabar-indonesia] ST Commentary: A (Promising) Shell of a Nation Unable to Govern Itself

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The Straits Times (Singapore) 
Friday, June 30, 2006

Commentary

A (promising) shell of a nation

Independence came to tiny country before it had
learnt to govern itself

by John McBeth, Senior Writer

JAKARTA - IT HAS always been a puzzle to me why so
many observers see Timor Leste as a failed state in
the making. The tiny nation has more going for it than
any Third World African state, including oil and gas
revenues, a promising tourist potential and a pool,
however small, of talented individuals.

So what has gone wrong and why is it coming apart at
the seams?

Politics, first and foremost. Even in a country of one
million people, whose citizens have surely suffered
enough over the past three decades, Timor Leste
politicians have simply been unable to bury the past,
discard time-worn ideologies and carry on where the
United Nations left off.

And there is a second major problem. While the
government of newly resigned prime minister Mari
Alkatiri has proven surprisingly and, in the opinion
of some, suspiciously inept, much of the blame should
also fall on the UN for leaving prematurely without
building enough institutional capacity to allow the
state to function effectively.

So now the embarrassed world body will have to return
in force over the next six months - not only to
maintain the peace and no doubt help the leadership
work out a lasting political settlement, but also to
stitch Timor Leste back together.

Given the complexity and often baffling nature of the
situation as it stands now, it will not be easy. Even
experienced observers struggle to explain what has
happened and why. 'You have to put away your logic and
only think illogically about it,' says one Western
diplomat, pointing to the one question everyone is
asking: Why did the government think it could fire 600
rebellious soldiers of the 1,500-strong East Timor
Defence Force without there being any repercussions.

But that does not explain the rest of the disorder
that followed, including the massacre of nine unarmed
policemen, the distribution of thousands of automatic
weapons to civilian militia groups and disquieting
reports of death squads in the alleged pay of Mr
Alkatiri and former interior minister Rogerio Lobato,
who have been squarely blamed for the violence.

UN Secretary-General Kofi Annan has acknowledged that
what the world body had held up as a model of
nation-building has turned out to be nothing more than
a fragile shell, still rent by the same political
frailties that led to Indonesia's invasion in 1975 and
still without an economy to dilute potential social
disorder.

Much of the criticism of the UN arises from the
culture of the organisation itself and the apparent
institutional necessity of involving different
nationalities in its operations.

In Timor Leste's case, the UN brought in an army of
840 civilians representing a ridiculous 114 countries,
leaving only 1,800 largely menial jobs to the
Timorese. During the three years under direct UN
administration, Timor Leste received about US$2.2
billion (S$3.5 billion) in international aid. This has
grown by a further $1 billion since then. But it was
not quite the huge chunk of money it seemed. By most
accounts, about half of that money went on salaries
and other overheads that always come with the UN
machine.

Efforts to reform the organisation and improve its
nation-building role should begin now, before a single
new staffer is sent into Dili.

That means dispensing with the gravy train that at one
point had a Nepalese policemen, for example, directing
traffic in the street outside the headquarters of the
UN transitional authority.

Even back then, in 2000, the more thoughtful people in
the UN were saying it would have been better to have
gone in with just 100 competent people, who would have
had to employ Timorese and whose jobs would have been
on the line if they goofed up. As it was, the
consequences for failure were just not there. Some of
those working for the UN came from countries nearly as
impoverished as Timor Leste; they would have been more
valuable staying at home and working on problems
there. Others possessed only a modicum of expertise
and only seemed to be in Timor Leste to make up their
country's seemingly mandated quota.

The Timorese had complained from the outset about the
UN's failure to involve more local people in deciding
their nation's future. 'We are not interested in
inheriting an economic rationale that leaves out the
social and political complexity of Timor Leste
reality,' then-president-in-waiting Xanana Gusmao said
in a rare and somewhat prophetic broadside in October
2000.

Some outsiders shared that worry. 'There's no economic
model, in fact there's no modelling of the country at
all in the way Timorese want it,' one Australian
consultant told me at the time. 'If the Timorese don't
participate, then they don't own the future.'

Forget the 70 per cent of the economic structure
destroyed by departing Indonesian troops. Just as big
a hole was left in the country's administration
itself, which any reasonable person should have
realised would have to be filled before the country
could get on its feet. Sadly, however, the UN left
capacity-building to the Timorese themselves - with
predictable results.

Mr Alkatiri can now point to that in explaining why
his government has failed to make any real headway,
particularly in key areas such as health, education
and basic infrastructure. In a clear sign of
bureaucratic ineptitude and the effects of three
months of political turmoil, only 35 per cent of the
US$135 million budget had been spent at the end of the
2005-2006 fiscal year, which falls this week.

This year's proposed budget is US$230 million - about
the same amount that is now flowing in from the
Bayu-Undan gas field in the Timor Sea.

Thanks to US$60-a-barrel oil prices, Timor Leste's 90
per cent share of royalties and tax windfalls are
larger, and started much earlier, than anticipated,
skyrocketing from US$41 million in 2003-2004 to US$243
million in 2004-2005. The country's Petroleum Fund has
about US$500 million, with the Petroleum Law
committing the government to saving most of that
revenue as sustainable income in perpetuity.

Economist Joao Saldanha, of the Timor Institute of
Development Studies, estimates that even if the price
of oil were to fall to US$40 a barrel, Dili will
eventually receive at least US$500 million in annual
oil and gas receipts. Non-oil revenues amount to only
US$8 million, about US$7 million of that coming from
coffee exports which are expected to rise over the
medium term in response to higher prices and improved
marketing.

Small markets, high costs, a low skills base, poor
infrastructure as well as a weak legal system are
still obstacles to attracting the foreign investment
needed to underpin economic development.

Politically, next year's scheduled parliamentary
elections may go a long way towards allowing the
Timorese themselves to resolve the current impasse.

Although Mr Alkatiri's belated resignation may have
defused some of the tension, his Marxist-orientated
Revolutionary Front of Independent Timor (Fretilin) is
still the dominant player in the political equation.
Timor Leste and the UN will also have to re-think the
wisdom of maintaining an army, a non-negotiable issue
at the birth of the nation because of Mr Gusmao's
concern at finding jobs for hundreds of resistance
fighters who might otherwise have become a
destabilising influence.

But now, security analysts say it would make more
sense to disband the army altogether and create an
integrated self-defence force - basically a civilian
police organisation with a paramilitary element that
would serve to break up the political and ethnic
divisions which triggered the recent violence and have
continued to haunt Timor Leste since its independence.

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