World Bank plans trust fund for East Timor
World Bank plans trust fund for East Timor
DARWIN, Australia (Reuters): The World Bank plans to set up a trust fund for shattered East Timor and member-nations will be asked to contribute to it, a regional bank official said on Wednesday.
The fund for U.N.-administered East Timor, which was devastated by pro-Indonesia militia violence after an August independence ballot, would mark the first time the World Bank has set up such a facility in a country which is not a member.
Klaus Rohland, head of a World Bank-led assessment mission which leaves for East Timor on Friday, said the initial World Bank contribution would not be great.
"Our contribution to the trust fund would be seed money and we would hope that bilateral donors would invest into the trust fund as well, so you don't talk about large amounts of World Bank money," Rohland told a media conference.
"Our shareholders, the governments from Australia to Zimbabwe, are ready to consider a substantial amount for the trust fund," said Rohland, the World Bank director for Papua New Guinea and the Pacific Islands.
Rohland's multi-agency assessment mission will be divided into emergency relief followed by long-term reconstruction plans to offer incentives for private enterprise and investment.
The 40-person mission includes representatives from the International Monetary Fund, the Asian Development Bank, the United Nations and donor countries Japan, Portugal and Australia.
Rohland's deputy is former Jakarta-appointed East Timor governor Mario Carrascalao, one of 26 East Timorese delegates to the mission.
Carrascalao said a future East Timor economy would likely be based on coffee exports, mineral resources and tourism.
Militias went on a destructive rampage after an overwhelming majority of East Timorese voted on August 30 to cut ties with Indonesia, which invaded the territory in 1975.
Indonesia, which reluctantly allowed a multinational intervention force into East Timor last month to restore order, ratified the ballot last week and set the former Portuguese colony on the path to independence.
Rohland's team will spend two weeks making phased visits to East Timor before reassembling in the northern Australian city of Darwin to make a report on what is needed for the massive task of reconstruction.
The report will be submitted to the bank's board of governors by December 16, with a donors' meeting slated for later that month. Rohland said the fund had not yet been raised with bank governors but he did not expect opposition from them or donors.
"They would say this issue of East Timor is important enough and is in the interest of the global community at large to justify spending part of the income," he said.
Rohland said he did not think normal World Bank operations such as offering concessionary rate loans would be suitable for East Timor, one of the poorest regions in Asia with per capita GDP among its 800,000 people of a paltry US$390.
"We don't think it's appropriate to start the development of an independent East Timor with a lot of debt," he said.
The level of the devastation and the immediate needs of the East Timorese meant the World Bank needed to be flexible in setting up such a fund for a non-member, Rohland said.
A U.N. operation including peacekeepers will take over civil administration in East Timor for between two and three years.