Donors pledge $360m in new aid for East Timor

Donors pledge $360m in new aid for East Timor

Bronwyn Curran, Agence France-Presse, Dili

International donors pledged some US$360 million in new aid for
poverty-stricken East Timor at the end of talks on Wednesday,
meaning that a total of $440 million in assistance will be
available for the first three years of independence.

East Timor will be Asia's poorest nation when it becomes
independent at midnight Sunday (10:00 p.m. Sunday) and had
appealed for continuing international assistance.

A statement said more than $360 million was pledged at the
two-day meeting.

"In addition to $81 million already available through the
Trust Fund for East Timor and the United Nations successor
mission, the new country will have access to more than $440
million over the next three years (against a request of just over
$400 million), including full coverage of core government budget
expenditures," it said.

"We're delighted, absolutely. It's far more than what we
expected," deputy foreign minister Fernando de Araujo told AFP.

The $360 million includes some $82 million in firm commitments
to meet the new government's estimated budget deficit over the
next three years, until taxes from offshore oil and gas projects
start rolling in.

"This meeting has been successful in what it set out to
achieve," the World Bank's East Asia and Pacific director, Klaus
Rohland, told the closing session.

"It set out to achieve contributions for East Timor's
financial needs over the next three years -- financial needs for
development activities and financial needs for the financing of
the core government budget."

The fledgling administration had presented a budget to donors
that heavily prioritizes poverty alleviation, with 39 percent
allocated to health and education spending in fiscal year 2003,
increasing to 48 percent by fiscal year 2006.

Some 41 percent of the territory's 750,000 people live below
the poverty line and gross domestic product per capita is $478.

East Timor is also struggling to rebuild infrastructure that
was devastated by Indonesian army-backed militias after the
August 1999 vote for independence from Jakarta.

Delegates from 27 countries and 15 multilateral institutions,
including the International Monetary Fund and the United Nations,
attended the talks.

Discussions focused on a five-year National Development
Program drawn up by the government, which outlines a budgetary
framework for creating economic growth and reducing poverty.

Delegates emphasized the importance of speeding up private-
sector growth, investment and job creation.

International donors have given East Timor more than $1
billion since late 1999, when the UN began rebuilding the former
Indonesian province from the ashes and rubble that remained after
the militia rampage.

Japan has been the biggest donor so far, followed by the
European Commission, Portugal, Australia and the United States.

The half-island territory spent some 450 years as a neglected
Portuguese colony. Neighboring Indonesia invaded in 1975 after
Lisbon's pullout.

An Australian-led peacekeeping force moved in following the
militia rampage. The United Nations took over the administration
in October 1999 to start rebuilding the territory and to prepare
it for independence.