East Timor could become failed state, aid agency says

East Timor could become failed state, aid agency says

Reuters
Canberra, Dili

East Timor, the world's newest nation, is in danger of becoming a
failed state because Australia is dragging its feet on maritime
border talks and hindering the development of its neighbor, aid
agency Oxfam said on Thursday.

An Oxfam report released to coincide with East Timor's second
anniversary of independence showed less than half the nation's
760,000 people could read or write, 41 percent live below the
poverty line and one in 10 children die before the age of five.

Australia and East Timor are negotiating a border in the
resource-rich Timor Sea. At stake are billions of dollars worth
of oil and gas royalties, which East Timor has vowed to use to
alleviate poverty, create jobs and improve education.

"Two years after independence, the Australian government's
approach to maritime boundary negotiations with East Timor is
limiting East Timor's capacity to plan for and finance its future
development," Oxfam and Australian arm Community Aid Abroad said.

"This could push newly independent East Timor to the brink of
becoming a failed state through no fault of its own," it said.

Australia has said it is only able to meet East Timor twice a
year, but East Timor wants monthly meetings in a bid to
accelerate maritime border talks that began last month in the
East Timor capital Dili. The next meeting is set for September.

"We will continue to forge better relations with Australia but
we will not have to sacrifice our interests for this," President
Xanana Gusmao said in his speech in a veiled reference to the
dispute.

At the heart of the dispute are billions of dollars worth of
royalties from oil and gas reserves which lie in the waters
between Australia and East Timor.

"We want to affirm here that we continue to firmly
revindicate, only, what according to international law we can
admit or conclude to be ours. It is not our intention to claim
more than one gram or one millimeter of what does not belong to
us," Gusmao said.

Defying the scorching sun, some 1,000 East Timorese rallied
inside a football stadium in the seaside capital Dili during the
subdued celebration.

Newly formed East Timorese police and troops, marched around
the field, a day after assuming full responsibility over security
in territory, which spans half an island.

Dozens of machete-wielding tribal chiefs, clad in bright
yellow shirts and red headbands, also marched across the stadium
as bystanders decked out in traditional costumes cheered the
procession.

Australia denies claims it is cheating East Timor out of A$1
million (US$700,000) a day in disputed oil and gas royalties and
says it has been more than generous to its tiny neighbor by
giving it 90 percent of royalties from a joint development area.

A year ago the two countries agreed to a revenue sharing Timor
Sea Treaty for a shared 62,000 square-km region that splits
royalties 90:10 in favor of East Timor until a permanent maritime
boundary is negotiated.

East Timor, which gained independence in 2002 after a quarter
of a century of often brutal Indonesian rule, wants negotiations
on a maritime border completed in three to five years. Australia
has refused to put a deadline on an agreement.

"They've made a very big mistake thinking the best way to
handle this negotiation is by trying to shame Australia, by
mounting abuse on our country, accusing us of bullying, when you
consider all we've done for East Timor," Australia's Foreign
Minister Alexander Downer told Australian television recently.

"We will do what we believe to be right but, of course, in our
interests," he said.

East Timor can claim a sea boundary 200 nautical miles (370
km) from its coast, consistent with its entitlement under
international law and the U.N. Convention on the Law of the Sea.

But Australia can also claim a boundary 200 nautical miles
from its coast. At the closest point, the countries are about 230
nautical miles apart.

Timor Sea gas fields include the $3.3 billion ConocoPhillips-
operated Bayu-Undan project and the $5 billion Woodside
Petroleum-run Greater Sunrise venture.