Ramos-Horta backs Timor Gap pact

Ramos-Horta backs Timor Gap pact

CANBERRA (Dow Jones): East Timor pro-independence leader and Nobel peace prize laureate Jose Ramos-Horta Tuesday reiterated support for the Timor Gap Treaty with Australia.

He also said in the event of a successful independence vote in the August 21-22 poll in the Indonesian province, East Timor would want a stable investment and economic regime.

At the same time, he said East Timor independence leaders are considering a range of options to develop its economy.

Ramos-Horta said an independent East Timor will honor the Timor Gap Treaty with Australia.

"Australian mining interests in the region shouldn't fear the change of political status of East Timor," he told the National Press Club.

Australia and Indonesia agreed the treaty in 1989, which sets out the terms for sharing royalties from oil production from wells in an area between the two countries in the Timor Sea. Agreement over sharing of royalties from gas production hasn't been finalized.

So far, about A$2.5 million in royalties has been distributed each to Australia and Indonesia under the agreement.

Ramos-Horta said East Timor leaders understand investments in mining and energy are different from setting up a restaurant or small shoe factory because of the size of the investments and their long-term nature.

Need Seen For Stable Investment Policies

He said the leaders understand the need for a stable investment regime. An independent East Timor will be relied on to give the right signals, he said.

Ramos-Horta said East Timor leaders have been heartened by responses from governments around the world to lend economic aid.

Portugal, for instance, has "pledged a significant contribution for at least the first two years of transition," he said.

"We have had an extraordinary response from the international community," he said, citing informal contacts with Australia's foreign minister, Alexander Downer, governments in Europe, other nations and the World Bank.

Indeed, East Timor leaders have found "extraordinary receptivity (and) goodwill towards supporting the future of East Timor, whatever the outcome of the popular vote," he said.

And whatever the outcome of the vote, Indonesia, which talks of a US$50 million-US$100 million budget for East Timor, will have to redirect some of these funds to other hard-pressed provinces, such as Irian Jaya and Aceh, he said.

Ramos-Horta said East Timor has the potential for an economy comprising the oil, gas, agriculture and tourism sectors.

In the event of independence, he suggested a number of other ideas the government could develop in terms of the banking system, banking secrecy and as a base as a register for flag-of- convenience shipping.

East Timor also will use its status as a former Portuguese territory to gain access to European markets for its exports, he said.

"So I believe investors in Singapore, Hong Kong or in Australia would have an interest in investing in East Timor," he said.