[East Timor] Democracy In Danger As Graft And Poverty Spread: World Bank

From Noticias

In a report dated July 25 and titled The International Development Association: Country Assistance Strategy for the Democratic Republic of Timor Leste, the World Bank says that East Timor is in danger of imploding into civil conflict, with corruption likely to erode the benefits of the billions of dollars that will flow to the fledgling nation from the development of gas fields in the Timor Sea, reports The Australian.

Emerging from the ashes of the bloody 1999 independence referendum, the half-island state of East Timor was a country in ruins. Under six years of UN stewardship and assistance from international donors, the tiny state of almost one million people has taken huge steps to rebuild. The World Bank report, obtained by The Australian, says East Timor has performed "considerably better than that of other post-conflict countries."

However, the report warns of emerging high-level corruption and of a Government increasingly out of touch with the people. The report also says East Timor is at a "crossroad" and the establishment of a functioning democracy will probably take decades. Among the World Bank’s biggest concerns is the re-emergence of corruption, endemic during the harsh quarter-century rule of Indonesian occupiers. "Governance and corruption problems are beginning to emerge," the report says. "Communication between the Government and the population is inadequate and often ineffective, resulting in limited mutual understanding. Timor Leste is at a juncture where it can consolidate gains and create conditions for sustained growth and poverty reduction, or descend down a path of poor governance, continuously increasing poverty and inequality and possibly renewed conflict."

The report says that the current danger is not posed by armed anti-independence militias but by what the Bank called "internal fault lines.” “More significant than external factors are internal fault lines contributing to the risk of renewed violence, including declining income, increased poverty, high unemployment and emerging corruption," the report says, noting an ominous increase in the prevalence of youthful martial arts groups. Areas tainted by corruption include customs, the justice system and the private sector.

The reports also warns that over-reliance on earnings from Timor Sea gas and oil could lead to a resource curse the bank calls "Dutch Disease" -- a failure to properly manage the exploitation of natural resources. A UN study three years ago -- before the oil price spike -- estimated East Timor stood to earn up to $30billion from the oil and gas reserves in the Timor Sea.

The Australian Associated Press meanwhile reports that Jose Ramos-Horta, East Timor's foreign minister, on Tuesday countered claims that his tiny country was riddled with graft and burdened by poverty that could one day lead to civil conflict. Ramos-Horta downplayed some concerns raised in the World Bank report. "If you read it thoroughly, the World Bank report is very optimistic about Timor," said Ramos-Horta, a Nobel peace prize winner. He admitted Timor had problems, but he remained optimistic about the future. "Overall the situation is fragile because we are new, three-years-old. The institutions are fragile," he said. Ramos-Horta said an April meeting of international donors had ticked off on East Timor's political and economic direction. "Every single one of them, including World Bank, including the International Monetary Fund, praise my government's performance," said Ramos-Horta, who is Laos for an ASEAN meeting. "Now we have a surplus, we (are) increasing the budget by 30 percent because of the windfall from oil and gas."