Internet Exclusive: A New Budget for Timor-Leste. But Questions About Corruption Persist.

2010 Timor-Leste State Budget Prioritises Infrastructure

Xanana Allocated 1.045 Million USD to the Anti Corruption Commission (ACC) To Combat His Members?

Provedor Questions Government Will to Fight Corruption.

Government of Timor Leste has recently presented its 2010 State Budget to the National Parliament of Timor-Leste. The Government of Prime Minister Xanana Gusmao has made a strong claim of the need to combat corruption in Timor-Leste.  He stated in his 2007 election campaign that "if anyone steals $0.50 they fired" - as he shouted in the Los Palos football field under the rain on 29 May 2007. 

Since Prime Minister Gusmao's Government took office in 2007 there have been revelations of government corruption almost every day of the week.  Additionally, accusation of maladministration of the use of Government funds by Ministers and civil servants are very common place.  Until now few of any have even been investigated let alone penalised.

However, in the new budget debate the Prime Minister made it a priority to fund the Anti-Corruption Commission, and to enable it exercise its strong powers in order to fight corruption.

“The Anti-Corruption Commission will be an independent body reporting to the National Parliament, with strong powers to fight corruption. The Anti-Corruption Commission has been allocated $1.045 million, because investing in this area is investing in good governance,” said Prime Minister told the National Parliament in the Tetun language.

But Timor-Leste's Provedor (Ombudsman) DR. Sebastiao Ximenes doubts the Government's goodwill to fight corruption. “Are they brave enough to fight Corruption?” he stated.

He added that he has submitted a report regarding the allegations of corruption made against Deputy Prime Minister Jose Luis "Lugu" Guterres several months ago. But since then has heard nothing from the Office of Prime Minister Gusmao,  “If this continues even as new Commissions are established surely Corruption will just increase."Ximenes told Tempo Semanal that the case against Deputy PM is related to his wife been recruited and paid as one of the staff of the Timor-Leste mission to the New York, just as the Deptuy PM was leaving the post in 2006.

So far the Provedor office have submitted 28 cases of allegation of corruption to the Office of the Prosecutor General for further investigation and taking to trial. “I am waitnig to see the prosecutors can bring these cases to the court," he said.

In the meantime according Prime Minister Gusmao it is his dream to basic Infrastructure so his government will prioritise investing in infrastructure even though the Ministry of Infrastructure in 2009 budget only executed 16% of it’s total budget by October this year. “We need basic infrastructure to develop a modern and prosperous Timor-Leste and to achieve the dreams we have for our country,” The Independence leader said.

He detailed that, “the 2010 Budget provides $217 million for capital development that will include, $73 million for road and bridge projects; $68 million for electricity and power; $11 million for clean water projects; $10 million for school construction and rehabilitation; $10 million for health facilities; $7.7 million to support tourism projects and cooperative facilities; $2.2 million for law and justice facilities, primarily in the districts; $2.9 million for projects to improve agricultural productivity.”

“Roads are central to our economic development and for connecting our People and our communities. They allow for the delivery of education and health services and are essential for district agricultural and industrial development.”

“The building and rehabilitation of road and bridges will also create jobs for our People. The plan in this sector will involve the construction, within the next few years, of 190 kilometres of national roads and 100 kilometres of urban roads, as well as the rehabilitation of a further 3,000 kilometres of rural roads, connecting the Sub-Districts to the Sucos. It will also include the construction of 14 bridges throughout the Country.”

“This Government will also continue to invest in electricity and power generation to ensure that all the districts of Timor-Leste have power all day, every day. This investment is critical for our economic development and is necessary to attract business investment. As such, in 2010 we will be investing $50 million in the “Project for Constructing Power Plants” under the contract already established and reviewed for the Country’s electrification. This is not just based on the needs of the existing population, but also takes into account the long term sustainable development plan.”

“Pursuing this goal does not exempt the Government from having to invest in alternative energies. Consequently, the Government has doubled the funds allocated to alternative and renewable energies in 2010.”

Vast numbers of Timor-Leste's population lack access to clean Water even though some donor countries have been working on this area since the Indonesian time. Every where in the country people demand to have access to clean water. “This Budget also allocates $11 million for clean water projects,” Xanana said. He explain, “Sickness, ill health and poor child development caused by lack of clean water and sanitation result in incalculable social and economic costs for our People and for our Country. Less the 50% of the Nation’s urban population have access to safe water supplies. The majority of people living in district centres only have access to water for a few hours per week. Half our Nation’s schools and a third of our health clinics do not have running water for sanitation. Less than 10% of our rural population have access to adequate sanitation. Water is a basic human need, which is why we cannot allow this situation to continue. Therefore, the Government is embarking on a program of clean water projects throughout Timor-Leste.”

“Together with our spending on roads and bridges, electricity and power and clean water, thisBudget will also improve Dili’s port and airport, build schools and health facilities and invest in our justice system and our tourism industry.”

“Our Government is committed to improving our schools, our health facilities, our roads and our agricultural sector throughout the Country. This is the second State Budget in which this Government has provided a district by district breakdown of proposed budget expenditure. The capital budget for 2010 is $216.8 million, with $90.7 million of this allocated for projects that benefit the whole nation, and the remaining $125.8 million provided for projects at a district level.”

The ex-Guerilla Commander reiterated that the 2010 budget is focused on the most important aspects of Timor-Leste's future – good governance, infrastructural development, public and food safety, human resource development and decentralised access to justice, health and education, particularly in rural areas. “Importantly, the Government is continuing its investment in infrastructure with $216.8 million allocated for capital development. This will support a broad program of public works including roads, bridges, power, water, education and health projects,” Xanana announced.

According to Xanana his Government is proposing a state budget for 2010 with a total of $637 million. This year's budget will decrease by $44 million, or 6.9%, from the 2009 Budget. Prime Minister Xanana also holds the post of Minister for Defence and Security and explained the budget to pay for the new Timor-Leste navy patrol boats and solve some issues left behind by the 2006 crisis. “This can be attributed to one-off costs in the 2009 Budget for the F-FDTL patrol boats, which will ensure surveillance of our territorial waters and fight illegal fishing, as well as the costs of the successful return of IDPs,” said the ex-Resistance leader.

To the Parliament and televised live to the nation PM Xanana informed the review of each ministry’s budget for savings and efficiency. “During this year’s Budget process, Ministers were also asked to critically review their expenditure to make sure that Government funds are being used effectively for the benefit of the people,” said Xanana.

The 2010 Budget estimates that total revenue will be $1.48 billion, which is below last year. This is due to reductions in oil revenues. While domestic revenue is projected to increase in the future, as a result of our economic growth, it will drop from $90 million in 2009 to $83 million in 2010, as a consequence of the Government’s successful tax reforms.

The government proposes increase public sector wages from $94 million in 2009 to $98 million in 2010. “This small change results from an 8% salary increase in the education sector, with the introduction of a new career regime to improve the quality of teaching,” Pm Justified.

But for 2010 the government reduce $23 million goods and services from $247 million in 2009 to $208 million in 2010. As well as Minor capital will decrease from $38.1 million in 2009 to $29 million in 2010. “This is largely because of and a reduction in car purchases and a reduction in the purchase of tractors for agricultural use, as the government shifts its focus to improving and expanding cultivation techniques and productivity,” PM Xanana promised.

He added that, “An additional $10 million will, however, be provided for heavy equipment to assist with the Government’s infrastructure projects.”

The 2010 Budget will be funded by the Estimated Sustainable Income, Domestic Revenues and Reserves. The Estimated Sustainable Income, which is 3% of our petroleum wealth, is presently forecast as $502 million in 2010. By the end of the year, the petroleum fund is expected to be $5.27 billion and by the end of 2010 it is expected to have a value of $6.16 billion. These calculations for the wealth of the petroleum fund are conservative. They are based upon a low production scenario for the Bayu-Undan field and an oil price of $60 per barrel. The calculations do not include expected future revenue from the Kitan field from 2011 to 2016 and they not include the Greater Sunrise field.

This Government and the Timorese People are also fully and firmly committed to the pipeline from the Greater Sunrise field coming to the south coast of Timor-Leste. This development would promote economic activity, increase State revenue and provide jobs and opportunities for Timorese citizens.

Taking into consideration the difficulty of accessing credit in Timor-Leste, particularly long term credit, the Government will be investing $8 million to establish a National Development Bank. This financial instrument will support the Country’s sustainable development model and enable Timorese businesses to compete on an equal footing with foreign businesses. The establishment of the National Development Bank will prove to be a milestone in the economic development of Timor-Leste. And so, we are already working on the model and the structure of the future Bank, taking into consideration the requisite legal requirements for its creation and its operation.

Ten years after the liberation of our Country, and after much struggle and recurrent trouble, Timor-Leste is emerging as a nation of hope and of promise. We have also had signs of confidence in our economic growth potential from foreign countries, such as Portugal, which is willing to open an aid credit line to Timor-Leste of up to 500 million euros. The United States Government also signed a Bilateral Assistance agreement with our Government on 30 October 2009, to the value of $103.1 million over six years, so as to support investment in people, good governance, democracy and economic growth. These are votes of confidence in this Government by foreign States that believe we are truly capable of maintaining Peace.