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.