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.