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Lia Haroman: GEM: A People's State Against A Capitalist's State

23 May 2006

This is a discussion compiled by the Grupu Estudu Maubere on Fretilin and the policies of the current Government of Timor-Leste. This document was put together on the eve of Fretilin's national congress. It is open for discussion and any comments or ideas are welcomed. Note that Grupu Estudu Maubere is not an organisation of, affiliated or associated with Fretilin.



Grupu Estudu Maubere:

A People's State Against A Capitalist's State


Farol, 16 May 2006


When the occupiers left Timor-Leste after having been defeated in the 1999 referendum, the people of Timor-Leste entered a transitional phase to set up the independent state of Timor-Leste through the auspices of the UN. The transition period in Timor-Leste marked the first ever in history of UN's direct involvement in the governance of country.

In carrying out its mandate as government, the UN handed the World Bank the job of managing Timor-Leste's reconstruction and development effort by administering the funds donated by UN member states. In October 1999 the World Bank established the Joint Assessment Mission to formulate a basic plan for Timor-Leste's reconstruction. The results of the assessment became the guide to the reconstruction of Timor-Leste. In carrying out the reconstruction program and establishing Timor-Leste's institutions, the leaders of the organisations which fought for independence under the CNRT were distanced and their only role became consultative.

Even after sovereignty was handed over in May 2002, the UN and the World Bank ccntinued to hold on to this role. The involvement of the UN member states continued to grow through their advisors positioned within important government institutions as wll as through various programs that they presided directly such as agricultural rehabilitation, education and others. These programs were run by experts from their respective countries based on existing schemes and not based on adequate scientific studies of East Timorese conditions and capacity. The developed countries which dominate the UN and the World Bank are of the opinion that for underdeveloped countries like Timor-Leste, the economy must be handed totally to the private sector for them to develop. The role of the state is limited to assisting the private sector's development. If a state is active in the economic sector, it would be accused of meddling and endangering these countries' economic development.

The government of the independent state of RDTL through the leadership of Prime Minister Mari Alkatiri has strived to turn Timor-Leste into a country truly independent by making its decisions based on the people's interest.


Opposing Privatisation

The government is not quick to accept programs introduced by international institutions, for example on the development of electrical energy. The World Bank, through the Asian Development Bank (ADB) wanted to channel funds but only under the condition that within 15 years, the electrical energy production ought to be privatised. The government rejected this initiative after taking into account the experiences from other poor countries where after having privatised their electricity energy production, electricity became accessible only to the rich. Electrical energy became a commodity which can be marketed to profit electrical companies without considering that the little people also also have a right to electricity for light. Thanks to the refusal to accept World Bank's proposals, today we still face problems relating to electricity services. However the government is close to success because in 2007, electrical energy development will start in order to respond the community's needs.

In the area of transport the Government wants to establish a public transport company so that the remote sucos can communicate with the city to meet their needs, such as marketing their agricultural products. But the World Bank is against this idea. Right now the government wants to set up a state company which will employ the small fishermen as the majority (share holders). Once again the World Bank is against this idea. The government hasn't been able to establish this venture because there isn't enough fund for it. When the revenue from the Timor Sea is adequate, there will be a better chance of establishing these state ventures which has the mission of supporting progress in people's life.


State Petroleum Company and Petroleum Fund

At the moment the government is undertaking plans to set up a state owned oil company. The aim of setting up this company is to make sure that all income from the oil and gas resources is spent towards the people. As part of this the government is studying other state owned oil companies such as that of Malaysia and other countries. The plan to set up this state owned company has been rejected by Timor-Leste businessmen (some of whom are members of Fretilin). These businessmen are cooperating with foreign businesses to compete in gaining access to the oil and gas revenues. In their opinion, the rights to manage these resources should be given to private companies arguing that these companies can manage the resources more efficiently and will benefit the government in terms of taxes and royalties. According to them a state owned company will not be as advantageous because government officials will embezzle the revenues through corruption. This is the same line of argument put forward by the World Bank in defence of privatisation.

It is true that in many countrie state owned companies never benefited the people because of massive corruption perpetrated by government officials. But this has occurred because these countries are rulled by auoritarian regimes. Government activities, including that of the state owned company, are never kept in check by the people. A way of preventing corruption inside the state owned company is through a direct people's control, through their representatives elected through democratic elections such as members of parliament. The Prime Minister understands this issue. That is why the revenues from oil and gas from Timor Sea are kept in the Petroleum Fund which can only be withdrawn by the National Parliament.

The Petroleum Fund is a financial management system drawn by Timor-Leste to manage its oil and gas resources in the Timor Sea. At the moment the revenue is being invested in the United States in form of US government bonds. The account is held in the name of Banking and Payment Authority (BPA) and is kept at the Federal Reserve of the United States. For the funds to be withdrawn, it must get the approval from the National Parliament together with a declaration from independent auditors on the revenues from the oil resources. This process is further controlled by a consultative councill called the Petroleum Consultative Councill to be made up by representatives of the National Parliament, non government organisations, religious institutions and the private sector. In the future this institution will also include former presidents of the republic, former speakers of the parliament, former prime ministers, former ministers of finances and former directors of BPA. The method of keeping the revenues at the Federal Reserve and their withdrawal ensures transparency and prevents corruption similar to other oil rich countries.

With respect to the use of revenues from the Petroleum Fund, Mari Alkatiri's political line is very clear and it concerns investments in the public sectors which benefit the people, such as free education, free health services, establishing state owned companies and undertaking new partnership programs with non government organisations.

The revenues generated from oil and gas are the main income for Timor-Leste as well as being the main capital for Timor-Leste's independence. These revenues, which will continue to grow, will empower the government to carry out programs that will benefit the Maubere People. Timor-Leste is following the path taken by Venezuela with regards to the use of oil revenues to empower the people. In Venezuela, the government led by president Hugo Chavez uses the revenues to eradicate illiteracy, provide health services to the people, develop agricultural and industrial cooperatives, as wll as assisting people of other countries in the health sector.

The revenues generated by the oil fields can also become a focal point of internal conflict. Some groups want the revenues used to develop the private sector. Perhaps this issue can become the basis for major contests inside the Fretilin Congress.


Against borrowing

Although there is not enough money to fund development, the Government of Mari Alkatiri has decided against borrowing from the World Bank. In fact the World Bank is inclined to make Timor-Leste a country with debt. This is due to the lessons Prime Minister Alkatiri learnt from other underdeveloped nations where the debts from the World Bank only benefited a small elite. In time, it will be left to the majority of those people to pay off the debts. Furthermore, countries which borrow money will loose their political independence as their political economy will be dictated by the World Bank. Prime Minister Mari Alkatiri and President Xanana Gusmão have rejected this option for Timor-Leste, an option which would only serve the current short term benefit of the elite at the expense of the future generations.


Health and Education

The Government of Mari Alkatiri recognises that development requires a healthy and educated population. Because of this the government gives priority to educationa and health. This is in line with the International Convention for Social, Economic and Cultural Rights which RDTL has signed, to which the United States, dubbed as the pioneer of human rights, has yet to ratify until today. We must be proud that as a new nation and poor, in just four years we are able to provide health and education services free of charge. Without these free services in health and education, only those with the means will be healthy and will be able to provide education for their children. Those without the means will continue to live with diseases and ignorance.

In providing free health services with a good quality, the government has cooperated with the Cuban government, whose country has high health standards and is welknown throughout the world. The Worl Bank also recognises the quality of health and education of Cuba which is comparable to industrialised countries like the Scandinavians, although Cuba is itself underdeveloped. Cuba has sent many volunteer doctors to assist in the provision of health in many remote sucos. They earn a monthly allowance of US$200. This earning is only a fraction compared to the "salaries" of doctors from other countries who are contracted to work in Timor-Leste for salaries of more than US$3000.

The Government of Timor-Leste sends hundreds of students to Cuba to study medicine. According to government plans, by 2015 Timor-Leste should be able to provide a doctor for every thousand members of the community. This doctor to population ratio will be higher than that of the United States (1 to 1400). The cooperation with Cuba is advantageous to Timor-Leste because the students' scholarships are funded by the Cuban government. The Timor-Leste government only provided funds to buy their return tickets to Cuba. This program indicates that the Department of Health has adequate plans for the health system and knows how to prepare the human resources for it.

The Government is also undertaking programs to improve mother and infant nutritions. Timor-Leste is known as a nation with high mother and infant mortality rate. This program is aimed at reducing the number of mother and infant mortality rate. It has just started in the districts of Liqui ça and Suai in cooperation of WFP and Oxfam Australia. It has been achieving some good results because since it improved the nutrition intake for the participating mother and infant.

Unfortunately in the area of education plans are not yet available for schools, from primary education to university. It is notable however, that non formal vocational education programs provided by the governments of Portugal and Brazil only prepares the participants to market their skills to companies. It does not prepare them to become independent and become a valuable member of the society.

There are a lot of criticism directed towards the area of education and health. This is to be expected as not everything that is good for the peope is tolerated by the elite class. Those who reject free education argue that this method will bring down the quality of schools and students will be less responsible for their education. This line of thinking is inaccurate. In Germany, education services from primary to tertiary are provided for free by the state. But Germany is also know for its high quality education system which attracts many students from countries all over the world to study from technology to philosophy and the arts.


Agriculture

In developing the agricultural sector, the government is trying to improve infrastructures such as irrigation and roads. However there are no discussions at the moment on how to organise communities to improve their production. Perhaps this has to do with the small government budget resulting from Worl Bank policies. An example of this is pasture. The government is not offering to provide free training for the people. According to plans, the World Bank will set up and organisation to train participants to become future trainers. The graduates will deliver these services to the people but at a fee. This clearly shows the World Bank's preference towards privatisation. Essentially the government should provide the services in this area so that it can be accessible to everyone. Otherwise only those with the resources will be able to access it. These measures also occur in other aspects of agriculture.


State: the instrument for the people's liberation vs the instrument to beef up the capitalists

These programs demonstrate that Mari Alkatiri's Government is fighting to make the state of independent Timor-Leste an instrument which serves the people and not the elite class. In the meantime the elite class is making a lot of profit through businesses in cooperation with foreign entrepreneurs, which want the state to become an instrument to serve the interests of the industrialists. They want the government to make an economic policy which can deliver opportunities to them. These objectives compelled them to become involved in political parties in order to define the policies of the state in line with their interests.

The businesses which are involved in these way are parasites. They turn the state into an instrument to exploit a country's resources as well as the people. Much like what has been happening at the moment, the exploitation of these resources is not used to develop activities that will benefit the people. It is used instead to serve for their own pleasures. They will not develop the economy of Timor-Leste because they don't have any long term economic plan. They only want to profit in the short term to support their lifestyle of excess and luxury.

They want Timor-Leste to give more priority to the private sector in its economic policies through the "neoliberal" multilateral financial institutions such as the World Bank and other developed nations currently running programs in Timor-Leste. They are of the opinion that a nation's progress can only be achieved when the running of the economy is handed totally to the private sector with the state's only role being that of supporting the private sector. If Timor-Leste economy is completely dominated by the private sector, the people of Timor-Leste will descend into a life of poverty and suffering in every aspect. But these won't be the only consequence, a new minority group will also emerge that will become richer and richer by day while the majority of the Timor-Leste people live in extreme poverty forever.

Mari Alkatiri's policies still remain true to the real objectives of Fretilin in setting the state as the instrument to free the pople from oppression, exploitation, ignorance and disease. These objectives are similar to the ones set out in the first Constitution drafted in 1975: "to dismantle the colonial structures in order to establish a new society free from domination and exploitation" (article 2, RDTL Constitution of 1975).

Right now there is a major clash between opposing ideals about an independent Timor-Leste: a state which serves the people versus a state which serves the interests of the business groups. This competition occurs in different sections, including within the government as well as inside Fretilin party itself. Our role in these debates is to make sure that the ideals of national liberation prevail by fighting for a State which belongs to the people, a people that dreamed of liberation of the Maubere People.

Farol, 16 May 2006.

 
Translated unofficially by Alex Tilman from tetum original. All errors are of translator's responsibility.



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