Making business climate for E. Timorese welfare

Making business climate for E. Timorese welfare

One of the leaders of East Timor's Fretilin independence
movement, Mari Alkatiri, is now Minister of Economic Affairs in
the transitional Cabinet. Following are excerpts of an interview
with The Jakarta Post held last month in Dili.

Question: Major economic potential for East Timor exists
within the coffee and tourism industries. How would you ensure
benefits for the Timorese?

Answer: The NCBA (America's National Cooperative Business
Association) now has a hold on the coffee sector instead of the
military.

Coffee is still our main export, we're trying to improve its
quality and getting it certified as an organic product.

We inherited the NCBA (from the period under the Indonesian
rule) and we're now trying to break the monopoly; we'll be
negotiating with interested investors, including Brazilians and
Portuguese.

We are also building bilateral cooperation with Australia, and
are seeking more diversity (in markets).

What do you see as a fair deal regarding the Timor Gap Treaty?

The issue is still being negotiated with the Australian
government, and (the agreement) is to be signed by the first
elected government in East Timor. In the formal round of talks
held last Oct. 9 to 13 our stance was clear, and we had a two way
meeting to look for ways to resolve the differences.

We're now trying to schedule another informal round and a
formal round of talks ... But our starting point is clear, that
of a clean slate, the treaty signed with the Indonesian
government is to be considered invalid because the United Nations
never recognized integration.

And (we are also) determining maritime boundaries ... We are
aware of our claims that if we apply current international laws
it should be the medium line; 100 percent of resources should be
for East Timorese.

In international law all overlapping claims should be
resolved. Not only do we need them but (oil and gas) are our main
resources.

Are you also going to establish rules to correct monopolies?

The main problem here is the lack of policies and a legal
framework.

According to regulations here Indonesian laws should still be
in place, with exceptions regarding human rights, but in practice
they are not. Why?

The reason is because some people in the international staff
don't really have the necessary capabilities. And how can laws be
enforced without effective administration? Not only is a legal
framework needed but also border control and adequate policing.

So the business environment has been a free for all situation?

Yes, over the past 10 months. Many who come here are not
investors, they are just looking to make money. If approached for
taxes they leave. For example, there is a consumer tax of 10
percent and a tax on imports, depending on the product, of up to
15 percent.

But we're trying to control the situation and make them pay
tax, register properly and attract investment institutions. Of
course, when you're trying to attract investors you can't have
huge taxes.

As a Fretilin leader how do you see the party in the future?

The history of the people here for the last 25 years has been
integrated with that of Fretilin. People know quite well who
really started working for independence and who never changed
policy.

We will definitely win the election. But we still think that
to have a government which can be most effective, the best human
resources will have to be placed in that government. We wouldn't
be the majority and we want a government that will create peace
and stability, a participatory government.

Fretilin's orientation is social democracy. How does a free
business climate figure here?

In a time of globalization at every stage we need to clearly
define how to create a complimentary situation between the
private and state sectors. There is no doubt that education,
health and rural development should be guaranteed by the state.

We need investors but we also need to improve the capacity of
Timorese businesses. And we need to strengthen community economic
enterprises as cooperatives. We need to balance the experiences
of other countries. Socialism and neoliberalism have not resolved
problems separately.

Given the fact that the economy was in the hands of the old
families among Timor's elite how can Timorese business develop?
Yes it is of course a problem. At least with Fretilin leadership
we will give full priority to empowering community economies
through micro financing for small enterprises. If Timorese do not
develop (economically) there will be no one to buy the results of
investment.

But maybe businesses would just rely on, say, Indonesian
buyers.

Yes so we will regulate. I'll give you one example. In
fisheries, for instance, some 10 companies have applied for
permits. I have not approved one, for the simple reason that we
should have the facilities, such as ports, here in Timor. They
are only looking to cash in on profits for their respective
countries. To create added value, jobs and more revenues we need
the facilities here.

Those applying for permits come from Australia, Hong Kong,
Maucau, Taiwan and Indonesia. (Ati Nurbaiti)