WB warns of East Timor corruption

WB warns of East Timor corruption

Agence France-Presse Dili

East Timor has only a brief window to tackle corruption and mismanagement before they become entrenched, a World Bank official warned on Tuesday as foreign donors met to consider the government's funding needs.

Jemal-ud-din Kassum, the bank's vice-president for East Asia and the Pacific, said the young country was making significant progress in enacting legislation to complete its institutions.

But laws must be transformed into adequately-resourced, well- functioning institutions that can provide the "checks and balances" called for in the country's constitution, he said.

East Timor was Asia's poorest nation at its independence two years ago on Thursday.

"Timor Leste is at a critical juncture now," he said in a speech to open the two-day meeting of about 300 delegates from more than 30 donor nations and agencies.

"Timor Leste also has a brief window of opportunity to address emerging problems of corruption and mismanagement before they become entrenched," Kassum said.

Kamalesh Sharma, who heads the United Nations Mission of Support in East Timor (UNMISET), told the meeting that East Timor "already has an exceptional record" for good governance.

Among the steps which bode well for the country's democratic development, Sharma cited a law establishing the Office of the Provedor, an independent agency handling complaints about abuse of power.

But Sharma noted that a significant proportion of East Timor's people have limited access to clean water, inadequate health facilities, low school enrollment and other problems.

"Daunting challenges lie ahead for the country and the people," Sharma said.

Kassum cited a number of positive developments since the donors last met in December, when East Timor faced a projected deficit of US$126 million over four years.

The projected financing gap has dropped to about $30 million thanks to an expected increase in oil and gas revenues as well as government efforts such as improved tax administration, the World Bank said.

However, Kassum warned that oil and gas revenues are subject to tremendous uncertainties.

"And we all know that the possible volatility in revenues caused by these uncertainties could be very risky for a small new nation like Timor Leste," he said.

Australia, Portugal, Japan, the European Union and the United States are East Timor's main donors. They and others are this year providing about 30 million to support East Timor's budget.

The government is seeking another $30 million annually until June, 2007.

Production started in February at the offshore Bayu-Undan gas field which is expected to earn the impoverished nation more than $100 million a year for 20 years.

East Timor claims it is losing a million dollars a day in additional revenue because of what it calls Australia's illegal exploitation of resources in a disputed area of another field, Greater Sunrise.

Talks between the two sides in April ended without any apparent agreement.

East Timor became independent on May 20, 2002, after a period of United Nations stewardship following Indonesia's bloody departure from the territory it invaded in 1975.

The UN says at least 1,400 people were murdered during the 1999 violence surrounding East Timor's vote for freedom.

A small UN advisory mission remains in East Timor.