Written by James Scambary.

East Timor held its third parliamentary election on July 22nd 2017. In an unexpected reversal, the incumbent National Congress for Timorese Reconstruction (CNRT) party, led by former Prime Minister and guerrilla commander Kay Rala ‘Xanana’ Gusmão, lost power to the Revolutionary Front of Independent East Timor (FRETILIN), the former independence movement and East Timor’s first sovereign government, led by Mari Alkatiri.

East Timor’s elections are usually policy free zones. With little experience of democracy after nearly 400 years of foreign occupation and low literacy levels, this is hardly surprising. Therefore, the strident anti-corruption rhetoric of two of the smaller parties was a welcome departure from the past. There was a widespread hope that times were changing, driven by an emerging young, educated and reform-minded demographic. This hope evaporated rapidly in the horse trading that followed.

Should there be another election, there is little reason to believe things will improve. FRETILIN campaigned on an anodyne platform of just doing the same things as the CNRT, but doing them better.

FRETILIN did not win enough votes to rule in its own right. The CNRT spurned an offer of a coalition so FRETILIN was forced to salvage an alliance with two new smaller parties. For reasons that may never be fully understood, this abruptly fell apart. These two new parties, which had built their campaigns around combatting waste and corruption, then promptly joined a new alliance with CNRT. That alliance is now using their majority to force the government from office, despite earlier promising not to. FRETILIN is digging in however, leading to a now six-month-old impasse, which may lead to new elections. It is worth looking at what a future government by either of these alliances might bring.

Ten years of CNRT rule and billions of dollars of investment in infrastructure has brought little progress in the lives of its people. This is largely due to the almost total lack of due process in the award of contracts. Road construction, for example, has consumed the bulk of the infrastructure budget but the lack of a tender process and attendant technical specifications has meant little improvement. Now, a spectacularly wasteful project on the south coast is gathering pace. In the absence of any investors, any real design, plan or feasibility study, the government, until its election loss, was forging ahead to build a refinery, a supply base and gas plant – all in the unlikely eventuality that a pipeline will be built from the as yet undeveloped Greater Sunrise field. The construction of a highway to span the entire south coast has already commenced – and has already collapsed in sections.

The CNRT was always the Gusmão party. It was a highly centralised system with Gusmão at its apex, surrounded by a coterie of unelected confidantes, bypassing ministerial and regulatory oversight. Major projects were awarded to party donors. A surprise move to step down by Gusmão in 2015 and to appoint a former FRETILIN minister and a number of FRETILIN members in cabinet positions resulted in little change in this power structure or fiscal policy. Parliament continued to unanimously vote through budgets which set spending at unsustainable levels. At the same time, health, education and the non-oil sector – especially agriculture, which employs about 85 percent of its population – continued to be neglected.

As part of this rapprochement between these previously bitter enemies, Gusmão had earlier appointed Alkatiri as head of his own white elephant project, the Oecusse Special Economic and Market Zone. Oecusse is an enclave – a small sleepy rural village isolated by land borders with Indonesia on one side and the sea on another. There are now highways, a power station, an international airport, a ‘luxury’ hotel and a health centre intended to cater to medical tourism (notwithstanding a scathing internal audit of the existing national hospital, which identified a near total failure of management, with not even basic hygiene procedures followed). There are plans to build a light industrial hub, a new port and a variety of other far-fetched projects. A Government commissioned feasibility report found that the project was unviable in the most fundamental ways. The report identified, for example, a lack of a cheap and skilled workforce and a port linked to an international shipping lane. Undeterred by that report and zero investor interest, the government have now sunk approximately USD$500 million into the project so far – spending that is officially exempt from any procurement processes.

Should there be another election, there is little reason to believe things will improve.  When last in government, FRETILIN had a number of capable ministers in its cabinet. By all accounts they ran a pretty clean operation. They established a Petroleum Fund to manage the country’s petroleum revenue, which was widely praised at the time as one of the world’s best models for a sovereign wealth fund. This election, however, FRETILIN campaigned on an anodyne platform of just doing the same things as the CNRT, but doing them better. Scorned by its would-be partners, FRETILIN has instead formed an expeditious alliance with the Democratic Party (PD), also a previously bitter enemy. The PD is led by the former minister for agriculture and forestry, Mariano Sabino, a highly effective political operator by all accounts, who has ensured the PD has largely maintained its vote over three elections. During his time at the helm, his ministry was plagued by allegations of preferential treatment of PD supporters. As identified by one report, it also had a proclivity for unsustainable mega-irrigation projects at the expense of much more effective and cheaper alternatives, with the result that Timor is now dependent on cheaper imported rice. More damagingly, a 2015 internal audit found widespread evidence of corruption in his ministry, including 21 unauthorised bank accounts, and recommended criminal prosecution. Instead, Sabino is now Minister of State and Minister for Mineral Resources.

As the impasse now enters its sixth month, it is clear what the real stakes are. When in power, the CNRT had no problem accommodating FRETILIN, who had no problem accepting the rules of the game. The trouble is that Gusmão is only happy with this arrangement if he still calls the shots and his circle still control the resource rents. The CNRT’s two junior alliance partners are now bedfellows of the party they had built their campaigns around criticising for corruption. With principles now dispensed with, if the country goes to another election as is highly likely, the choice for voters will be, essentially, about how well they want their white elephants built.

James Scambary is a Research Fellow in the Department of Political & Social Change at the Australian National University. James has been conducting research on the intersections between gangs, conflict, peacebuilding, informal governance, corruption and organised crime in East Timor. He has previously conducted research for New York Social Science Research Council, the World Bank and the Asia Foundation. Image Credit: CC by Kate Dixon/Flickr

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