East Timorese recall better life during Indonesia occupation

Rendi A. Witular, The Jakarta Post, Dili, East Timor

Rich in oil, gas and coffee, the East Timorese had high hopes that the new country would be prosperous after its independence from Indonesia in 1999.

However, the lack of foreign direct investment in oil and gas exploration and the use of the U.S. dollar as its currency has almost brought the country's economy to a standstill.

The situation has made some East Timorese recall better days when the country was still Indonesia's 27th province under president Soeharto.

"We understand that independence is this country's utmost achievement. But we can't deny the irony that our life now is harder than before independence," said Nicolai, a 27-year-old driver working for a car rental company.

He said with a salary of some US$80 per month, he could barely make ends meet considering his daily expenses of $3. Therefore, he has taken a side job at a small coffee processing plant.

"When we were still a part of Indonesia, we could afford to buy food although we didn't have decent jobs. But now, aside from being expensive, food supply is also limited -- especially in the remote areas," he said.

According to a report from the U.S. Agency for International Development, more than two-fifths of East Timor's 900,000 people live on less than $1 per day and only one in five families has access to electricity and only two in five families have access to clean water.

East Timor gained independence from Indonesia in an August 1999 referendum.

After independence, East Timor was temporarily under a United Nations (UN) transitional administration before the new state, which occupies half of the island of Timor could directly elect its leaders.

During the transition period, the UN administration was optimistic that East Timor would have a self-sufficient economy within the next six years, with coffee plantations as the main economic backbone.

But after six years, optimism has faded as many coffee farmers have gone bankrupt.

Lorenzo, a police officer whose father used to engage in the coffee business, said that since last year there has been a sharp decline in coffee demand from overseas following the adoption of the U.S. dollar as the sole legal currency.

This caused coffee prices to become uncompetitive in the world market. Indonesian coffee agents, who used to buy the coffee, are now declining due to the high prices.

Since independence, the UN administration has allowed the East Timorese to use a number of currencies for exchange aside from the U.S. dollar -- including the Indonesian rupiah and Australian dollar, which have a lower value than the greenback.

"Just late last year, we had to destroy tons of coffee beans because there were no buyers. We also had to prevent the price from falling due to the abundant stock," said Lorenzo, adding that he would personally prefer the country to be under the Indonesian government.

East Timor is known for its organically grown Arabica and Robusta coffee with its smooth flavor and low acidity. The coffee business started when the area was still controlled by the Portuguese who established plantations in East Timor's highlands several centuries ago.

East Timor legislative member Clementino dos Reis Amaral acknowledged that the country's economy had declined sharply over the last three years as the UN staff were departing and foreign investment was hard to come by.

"The economy is not heading in a prosperous direction yet due to uncertainty in the business climate with the main concerns being security, a weak judicial system and poor quality of human resources," he said.

Amaral said the urgent problem that needed to be immediately addressed was the rising open unemployment rate -- which has reached around 50 percent -- and the lack of qualified human resources.

But East Timor's leaders are optimistic over the country's economic prospects due to its undeveloped offshore oil and gas reserves, which is estimated will bring in about $5 billion a year once exploration starts.

"We may be poor and underdeveloped now. But we are optimistic that East Timor can be prosperous in the next 15 years, since we have abundant untapped natural resources," said East Timor President Xanana Gusmao in a recent joint press conference with visiting Indonesian President Susilo Bambang Yudhoyono.

At present, East Timor is still negotiating with its neighbor Australia over the exploration of oil and gas resources in the sea that separates the country with Australia -- known as the Timor gap.