Q+A in East Timor’s future

My answers to some questions by an Agence-France Presse journalist ahead of Timor-Leste’s celebration of the 20th anniversary of its vote for independence:

· What are the key developments politically, economically and socially in East Timor since 1999?

A: The development of the Timor Sea fields has allowed Timor-Leste to get on its feet and put some money into a sovereign wealth fund. Importantly, the new government in 2007 was able to use the oil price rise windfall to help subsidise food (mostly rice) and to use money to stabilise the precarious political environment, paying our disaffected soldiers and assisting people who’d lost their homes in the 2006 troubles. In all, the place settled very quickly and within a couple of years we started to see real improvements in human development indicators, particularly around infant and maternal mortality, and average life expectancy.

· What will be the significance and impact of the greater sunrise oil and gas fields ?

A: The impact of the Greater Sunrise field will depend on whether it’s developed, by whom, how and when. If the government goes it alone, it is likely to be a major white elephant and quickly run down the country’s limited financial reserves. It may also require a loan, probably from China, which will make the country beholden to a regional superpower whose intentions are not always benign. If it is developed privately then it stands to deliver much needed profits to the sovereign wealth fund, allowing the country time to work out an economically sustainable way forward.

· There has been talk that Timor needs to focus on developing its agricultural sector among others. What are your thoughts? What has it done well on the economic front and what has it done poorly? There seems to have been some criticism over white elephant projects and such?

A: Timor-Leste remains heavily dependent on imported foodstuffs, which it can ill afford. So developing the agriculture sector, and in particular in ways that negate the one-crop ‘hungry season’ that traditionally occurred between around February and April, is critical to a sustainable future. So far, food self-sufficiency still looks to be a long way off, particularly around staples.

· What is the role of BRI and Chinese investment playing in East Timor?

A: BRI is just a bank doing banking business. I don’t see anything sinister there. Chinese investment is being encouraged by the government in Beijing as part of its wider ‘String of Pearls’ strategy of establishing bases from the western side of the Indian Ocean across to the Pacific.

· What is the broader story of east Timor 20 years late. Has it made good on its bid to stand alone as an independent nation?

A: Timor-Leste is making its own way as a young nation. It’s made some serious mistakes, such as the events of 2006, which are common to newly independent countries, but it has come out intact the other side, if with a great deal of help from its friends (which many newly independent countries don’t have and hence fail). The real question is whether it – or some of its leaders – can reconcile its capacity with its ambitions. If it can do this then it has a good future as a stable and developing country. If it over-reaches, which it appears to be doing at the moment, it is very likely to fall flat on its face.

· What key factors will determine Timor’s future in the next decades?

A: The government has consistently spent double or more of the interest from the sovereign wealth fund, eating into the capital. The Timor has now effectively dried up, but for the undeveloped Greater Sunrise field, and at current rates of spending, assuming no new sources of income, the country will be flat broke before the end of the coming decade. However, if the government can rein in spending and start focusing on sustainable development goals then it could have a happy future as a pleasant, not wealthy, but okay small country. If it does go for broke, that will likely lead to significant civil unrest and the likelihood of the imposition of an authoritarian one-party state, as so often occurs when governments are no longer able t manage the contradictions they sit astride. The latter will, in particular, beg the question of external assistance and here China could play an important role, which will not make some of Timor-Leste’s other friends very happy. In all, good decision making from here could secure the country’s moderately prosperous and fairly happy future; poor decision making could lead to some real pain for the country and, more importantly, its people, and potentially alienate a number of its friends.

· Finally, what is the legacy of the ’99 referendum and the violence that followed? What is Indonesia’s perspective on the country (with Wiranto holding a senior cabinet post)?

A: It was the painful birth of a new nation. The legacy could be construed, as it has been by some political leaders in Timor-Leste, that if the country can achieve independence when all thought that hope was lost, then it can do anything. That’s a false assumption, given it required a very particular moment in time, when the Cold War had ended and the US was no longer concerned to prop up some allies such as Indonesia, Indonesia was in economic crisis, it had an idiosyncratic president who acted against the wishes of the Indonesia’s elites by allowing the referendum on independence, ad it had support of the international community in a way that has rarely been seen since and is not likely to be seen again for a very long time. From Indonesia’s perspective, they just want to get on with trying to be a successful country and not bother themselves too much with an ‘ungrateful’ people, if at the same time recognising the value of good diplomatic relations. The tow countries have, in effect, agreed to white-wash the past, so as to build a more stable and agreeable future.