Timor-Leste: Political Independence but Economic Dependence

Indonesian President SBY and Timor-Leste Prime Minister Xanana

Timor-Leste defeated Indonesia's 24 year long occupation, but is increasingly economically dependent and dominated by its former occupier.

After 13 years of international presence in Timor-Leste and ten years since the restoration of independence the country now has to turn to Indonesia to help free its people from poverty.  Western countries that helped Timorese gain independence are not investing its in economic development other than through ineffective aid projects.

Despite 14 billion dollars from donor countries and UN being spent on developing Timor-Leste and billions more from the Petroleum Fund Timorese people remain among the poorest in Asia.

The Government, under Prime Ministers Alkatiri, Ramos-Horta and Xanana Gusmao, have consistently stated that justice for the crimes of 1975-99 are not as important a priority as freeing the people of the Timor-Leste from poverty.  The Timorese Government was unable to free its people from poverty in partnership with the wider international community; it is now turning to the old enemy to develop Timor-Leste.

Since 2008 the expansion and deepening of relations with Indonesia has grown dramatically.  The Indonesian business community in Dili has grown both in size and influence. It is developing dominance in critical national infrastructure development along with many other areas.

1. Petro sector: Timor-Leste depends almost entirely on Indonesia for supplies of fuel.  And recently Indonesian state oil company Pertamina signed an agreement with new Timor state oil company TimorGAP to dominate the petrol station sector across all districts. Prime Minister Gusmao has also consulted widely with Indonesian actors in East Java in developing the South coast supply base as part of the Tasi Mane mega project.

2. Recently, TELIN a subsidiary of Indonesia’s state owned and largest telcoms company TELKOSMEL won a license to operate a telcoms network in Timor-Leste.

3. Indonesian operators Merpati and Batavia dominate the air transport sector in Timor-Leste.

4. Indonesian bank Mandiri is the preferred financial institution for unregulated financial transactions by Indonesian businesses with their Timorese partners.

5.  Indonesia’s shipping hub in Surabaya dominates shipping routes to and from Timor-Leste.

6.  Indonesian educational institutions remain the preferred destination for the majority of Timorese university students.

7. Indonesian government departments are rapidly becoming the dominant development partners for all of Timor-Leste’s ministries to improve the civil service.

8. The Indonesian national police service is expanding its cooperation and assistance to Timorese national police.

9. In a dramatic and important move in 2011 after the visit of former Vice President and Commander of the Indonesian military General Tri Sutrisno, the opening of Timorese and Indonesian military cooperation has begun in earnest.

10.  Indonesian suppliers are already providing a range of non-lethal material to Timorese security institutions, and weapons and ammunition transfer are inevitable.

11. Indonesian business played a key role in financing a number of political parties in the recent national elections.

12.  While the Government is spending billions on reconstruction of Timorese infrastructure that was destroyed by the Indonesian army and its Timorese allies, the vast majority of building supplies are Indonesian in origin.

13.  Timor-Leste is now receiving thousands of Indonesian migrant workers who are beginning to dominate certain areas of the labor force and service industries.

While Timorese dollars flow eastwards to Indonesian businesses that profit from increased cooperation many people ask how long does the Timorese population have to wait for substantive justice and reconciliation?  The Indonesian establishment still finds it hard to return the remains of Nicolau Lobato and many other disappeared heroes such as Mau Hudo, David Alex, and Sabalae.

President SBY, who has shown himself to be sympathetic to Timorese feelings on these matters has also proven to be unable to generate results.  With Prabowo Subianto being the current front runner to replace SBY things will possibly become more complicated.

Given that Indonesia is not only benefitting from Timor-Leste reconstruction and that it is exerting economic dominance, in addition to longstanding Timorese patience, it is important that old wounds be closed while the opportunity still exists.