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Kofi Annan Recommends Large UN Presence In Timor

The Secretary General of the UN, Kofi Annan, in an 18 page report, has urged UN member countries to provide security forces, experts and civil servants to help rebuild East Timor. But, it won't be easy. John Howard reports.

Mr Annan's report to the Security Council recommends a UN Transitional Administration in East Timor (UNTAET) with full independence in two to three years. The UN Security Council will examine the report on Thursday.

But when East Timor becomes a country in its own right, it will be born in ruin. Even before the Indonesian military and its militia proxies burned and looted, its economy barely ticked over at subsistence level. With Indonesia gone, however, the oil and gas resources that lie just offshore could hold the key to healing and sustaining this small nation.

It is difficult to think about the future when circumstances are so uncertain - with towns razed to the ground, people displaced, the wounds of violence as yet unhealed.

Yet independence leader Xanana Gusmao, who almost certainly will become East Timor's first president, and his deputy Jose Ramos Horta have been laying the groundwork with their government-in-exile for months, in talks with international leaders, seminars with agricultural, economic, mineral specialists and education and health specialists.

But even if the Indonesian parliament ratifies the August 30 vote for independence and East Timor becomes a sovereign nation next month, its probems will be far from over.

Its public administration, education system and businesses lie in ruins, areas largely overseen by Indonesians who have now left. East Timor will be starting from scratch.

"Economic prospects for East Timor were very poor even three weeks ago," said Professor Heinz Arndt, visiting fellow for the National Centre for Development Studies at Australian National University in Canberra.

"They have become catastrophically negative since the sorched earth policy."

East Timor covers 14,600 square kilometres and has an approximate population of 850,000, though it remains to be seen how big the population really is after the displaced return from the refugee camps in West Timor, Bali and other parts of Indonesia and from exile overseas.

Historically, it was a hunter-gatherer society and for 300 years was left to its own devices, largely neglected by its colonial overlord, Portugal, which abruptly left in 1975. Then Indonesia invaded.

" Indonesia has spent an enormous amount on East Timor," said Professor Arndt. According to Asia Week statistics, per capita income in 1976 was US$40, in 1996 US$398.

High schools increased from three in 1976 to 172 two decades later. The number of health facilities in the same period increased from three to 525. From 1994 to 1996 Jakarta financed 92.4 percent of local government expenditure, with only 7.6 percent financed by local income.

Professor Arndt believes Australia and other countries would have to contribute massively to sustain East Timor. He thinks it would take the country 10 to 20 years to become moderately self-sufficient.

However, it could be East Timor's land-based and offshore natural resources which become the main revenue earners.

Coffee, sandalwood and marble head the land-based list, but the key earner may lie under the sea-bed. Oil and gas condensate and minerals are still being explored and exploited under the Timor Gap Treaty, signed by Indonesia and Australia in 1990 entitling both countries to half the resources, with the revenues from royalties from the minerals going to both governments.

Other areas in the Timor Sea have been seperately divided by Australia in the late 1960's and early 1970's with Portugal, and between 1975 and 1990 with Indonesia.

Canberra will still have mineral agreements with Indonesia on areas outside the Timor Gap, but according to the treaty the royalty revenues should go equally to the two nearest sovereign countries - Australia and East Timor.

Mr Gusmao has been pushing hard for East Timor to take over from Indonesia as signatory to the treaty. Under the principle of successor states when East Timor becomes independent, responsibility should shift from Indonesia to East Timor through the treaty agreement.

East Timor would not just gain royalties. It would provide local employment, and the associated land-based service industries, needed for off-shore production.

But elsewhere the signs are not so good.

Dr Hadi Soesastro, executive director of the Centre for Strategic and International Studies in Jakarta, said of its agriculture resources: "It is an economy that will rely on external assistance in the form of aid."

"It is not realistic to expect foreign investment, since East Timor doesn't have the basis for a manufacturing sector."

But cash crops could be a main commodity. Coffee would be based on smallholders. What is important to increase production is to rehabilitate the plantations of smallholders.

East Timor is due to record a bumper coffee harvest of 8,000 to 10,000 tonnes this year, despite losses to political instability. Last year its crop was worth US$20 million.

Timor's coffee is well-like by connoisseurs because of its purity. Farmers have never has the funds to spray pesticides.

The first move should be to do surveys with agricultural experts because in these situations it is agriculture that usually bounces back before long-term infrastructure. Especially as East Timor is already a farming community.

Other areas of potential revenue include tourism and, dare I say it, gambling. East Timor has Portuguese fortresses and churches hundreds of years old, which could be an attraction to heritage hunters.

Gambling is banned in Indonesia. However, in the early 1970's Macau entrepreneur Stanley Ho Hung-sun looked into setting up a casino in East Timor, but was thwarted by the Indonesian invasion. It could now become a niche-market for the area.

With the East Timorese streaming down from the hills to return to their devastated villages and towns the first priority will be food and water.

The next task will be to establish public administration, healthcare and education facilities. If teenagers are not quickly sitting back in secondary school classrooms, East Timor could suffer a generation gap in terms of young brains to take the country forward.

Many exiles are keen to return, but the majority of these are now doctors, lawyers and teachers in their new countries. These are just the kind of people East Timor needs to set up a judicial system, hospitals and schools. But if the exiles are now used to a higher standard of living they may be unwilling to return.

Portugal and the European Union are already committed to US$200 million aid within the first year, the priority being social welfare. Other countries, such as Australia and Britain, have only made informal committments.

There is one area which cannot be quantified: the emotional damage caused by 24 years of civil war and this year's massacres. The UN can start the healing by moving quickly but many children are likely to have seen atrocities which will make it extremely difficult for them. It is to be hoped that East Timor's vital new generation will come through the events able to cope with what will be a difficult future.


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