Gusmao Government's big spending budget fail to deliver poverty eradication

FRENTE REVOLUCIONARIA DO TIMOR-LESTE INDEPENDENTE FRETILIN MEDIA RELEASE Dili, 29 May 2009 Gusmao Government's big spending budget fail to deliver poverty eradication

Timor-Leste's de facto Government led by Xanana Gusmao persistently claim that their economic policies and large budget increases since 2007 have delivered 'record economic growth', it is not having any substantive impact on the lives of non-Dili residents, which is most Timorese, according to a FRETILIN leader.

Former Minister for Agriculture and Prime Minister, FRETILIN MP Estanislau da Silva spoke to journalists today about the need for the AMP de facto government to start to listen to the Opposition, civil society, the church and others, who have been warning that the very large budget increases would only result in waste and will have little or no impact on poverty reduction.

'The fact is that it is only the World Bank and the de facto Finance Minister Ms Pires who are fond of crowing about 12 plus percent economic growth as if it was a significant achievement in itself. This means nothing if it’s only benefiting an elite few and only Dili dwellers. Our petroleum fund money is being used to fuel an economic bonanza that is being wasted because this de facto government's mismanagement and corruption. During the UN administration in 2000-2001 we had 18 plus percent economic growth but it did nothing for poverty eradication.

'What we are seeing here are the very dangerous effects of petro dollar driven wasteful public spending, turning us into a consumer economy producing little and with a very high spending public sector. Worst of all is that this is benefitting only a few and everyone knows it,” Da Silva said.

But Da Silva is not the only one saying that, and the influential Roman Catholic Church has joined in the chorus. In the country’s east, the Bishop of the Diocese of Baucau, Dom Basilio de Nascimento, said last Sunday, May 24:

'We have heard our politicians make promises since last year, but my stomach is still hungry for what they promised. For example they said that this year would be the year for infrastructure delivery. I have not seen anything significant yet. I also heard the President speaks when he comes to speak that we have an economic growth of 12%, the highest economic growth in the world. But if we ask if this growth has had an impact on the people directly, then I have not seen that yet. Perhaps if there is such economic growth we can see that it is mostly in Dili, but we in the rural areas have not yet seen the expression of this growth, the result of this growth……We hope that economic growth is not only for Dili's benefit but that economic growth is also for us in the rural areas because we are also God’s people.

'I think the measures the government has adopted such as distributing subsidies and payments here and there has made people feel stability, but I also think that if we are just dependant on subsidies then we will not go very far. Because today we are happy with $20 but tomorrow it is not enough and we demand $50, then two or three years later $50 is not enough and we demand $100, then $150, but we do not produce anything…….we have to produce something….', Dom Basilio added.

Dom Basilio also questioned government policies such as the distribution of tractors saying, 'What improvement in production have these tractors brought?' Special mention was made by him of the condition of the rural roads, which he said were in poor condition, and getting worse.

FRETILIN and other opposition parties have persistently raised all these concerns and during the debate for the 2009 budget moved to increase the budget allocations for maintenance of rural roads, doubling it to more than US$30 million for the year. But the government and its allies in the parliament rejected it.

'Rural development and the delivery of services for rural people should be our priority. When FRETILIN governed we did not have the funds. The de facto government is now flush with funds, but it is being channeled mostly to cosmetic street beautification and government buildings. Millions of US dollars are being spent to rehabilitate residences for Ministers, Deputy Prime Ministers and other members of government. Millions are being spent on celebration parties for national holidays, US$1.15 million to celebrate the May 20 restoration of independence. They have spent millions on luxury four wheel drive cars like Toyota Prados and pajeros for ministers, parliamentarians and their political appointees that could have gone to services for our people. We will continue to question this type of waste and failure to deliver services to our people, especially in rural areas, most of whom live on less than $1 a day and deserve more,” said Estanislau da Silva.

'It was FRETILIN that left this government with a huge petroleum sovereign fund with untold reserves, which is the envy of many countries. It was a sovereign fund, which, managed transparently, could have provided for us today and for future generations to pull us out of poverty. Instead it is being misused to drive us into dependency and ultimately debt, through government waste and corruption,' Da Silva said in closing.

The World Bank and other donors have warned the AMP Gusmao government that, at current spending rates and lower oil prices, the fund would be depleted by 2012.

For further information contact Jose Teixeira on +670 728 7080