03 January 2010

Gusmao’s financial management questioned from within



Media Release

Dili, 18 November 2009

Gusmao’s financial management questioned from within

On the day before Timor-Leste’s National Parliament begins to discuss the proposed 2010 national budget, members of the de facto government’s AMP majority have publicly criticized the management of public works and raised questions of corruption.

In the Dili daily, Jornal Diario Nacional, on 16 November, President of the Parliament, Fernando Lasama Araujo, was quoted: “This thing the referendum [infrastructure] package, when we look at its quality, … some contractors are performing works of no quality and stealing the people’s money.”

Former IMF funded consultant to the Ministry of Finance, and currently Head of Pro-Poor Policy Unit and Policy Advisor, UNDP Timor-Leste, Mr Rui Gomes, has also roundly criticised the government’s record in a written statement to the parliament’s economic committee. Mr. Gomes is a leading Timorese academic in the area of development studies.

FRETILIN parliamentary leader Aniceto Guterres commented: “Mr Lasama has questioned the quality and effectiveness of the government’s management of the so-called referendum package from the start. Many in parliament, non-governmental organizations and the community at large have expressed concerns about this ill-conceived and legally questionable move by Mr Gusmao. Our party intends to scrutinize this package fully and is preparing for legal action in due course,” warned Mr Guterres.

Yesterday’s Dili daily the Timor Post reported senior AMP MP, Mr Rui Meneses, criticizing weaknesses in the Ministry of Finance and in government procurement as the cause of widespread corruption.

“Our own system is still weak,” he told the newspaper, adding “the weakness is that there is no centralized procurement to oversee the whole project. Because there is no centralized procurement, each ministry compiles its own criteria, there are no basic criteria such as general rules to control procurement of the projects that are initiated.”

He added, “We have to politically acknowledge that the referendum package project lacks quality.”

Meanwhile the Chair of the National Parliament’s Economy, Finance and Anti Corruption Committee, Dr Manuel Tilman, has criticised the government for failing to spend US$116 million from the 2008 Budget until the middle of 2009, for which he accused the de facto government of misrepresentation to parliament during last year’s debate. “They (the government) are lying when
they now say there are no carryovers. Because they paid 116 million from the 2008 Budget up until June 2009, which they should have done by the end of February, and this came up in the Deloitte’s accounting report otherwise we would not have known,” Tilman was reported as saying in Jornal Nacional Diario on November 17, 2009.

Mr Guterres commented: “Mr. Gusmao has been caught out. He has repeatedly told the parliament and the people of Timor-Leste that ‘carryovers’ were bad and that his government had eliminated that practice. The Deloitte’s audit report clearly shows this is not true. The government’s management of public finances is in disarray, and multilateral institutions like the World Bank are complicit in covering up this mismanagement with their persistent failure to publicly address problems which their advisors and missions

Mr Rui Gomes, one of the government’s former IMF funded consultants to the Finance Ministry, and currently Head of Pro-Poor Policy Unit and Policy Advisor, United Nations Development Program in Timor-Leste in a recent note prepared for the parliamentary committee for economy, finance and corruption, criticised the referendum package, saying that this spending “overruled the competency and authority of parliament to approve and oversee the budget and by-passed the government’s own procurement rules and regulations, by weakening transparent and competitive tendering processes.”

Mr Gomes also criticized the sustainability of the proposed 2010 Budget for not being pro-poor and for being heavily biased towards Dili. “Allocating two per cent of the national budget to agriculture does not only defeat the government’s commitment to eradicate poverty, but denies opportunities for improved incomes to the poor places of Timor-Leste, far from achieving food security and reducing poverty,” he said. “With a high population growth rate (3.l2% per year on average), the aim of achieving food security in the
country is moving in a reverse direction.” He added that there is a widening gap between the rich and the poor in Timor-Leste: “The benefits of growth and income distribution have continued to be in the hands of the richest 20% of the population. The continued decline in agriculture growth has compounded the problem of income inequality.”

The Gusmao de facto government has faced persistent allegations of corruption, collusion and cronyism over the last two and half years.

The country’s anti-corruption watchdog, the Office of the Ombudsman for Human Rights and Justice, has investigated and recommended legal action by the Prosecutor General against a number of senior ministers in the de facto government, including the Minister for Justice, Ms Lucia Lobato, the Minister for Finance, Ms Emilia Pires, and the Deputy Prime Minister, Mr
Jose Luis Guterres.

“Mr Gusmao likes to hold himself out as an anti-corruption crusader. The truth is that such talk from him is all hot air. The parliament unanimously passed a law establishing an anti-corruption commission, but now he has failed to nominate to parliament a candidate to head it up. He has also failed to nominate the follow-on Ombudsman for Human Rights and Justice. For now, Timor-Leste is without an effective anti-corruption watchdog. How convenient, at a time when he and his ministers are facing unprecedented criticism of financial mismanagement and corruption, including from within its own ranks,” said Mr Guterres.

Mr Guterres said in closing that the de facto government appeared intent on continuing to raid the nation’s Petroleum Fund with big budgets that it is unable to legally and effectively spend, and which delivered no results for poverty eradication and human development.

For further information please contact Jose Teixeira MP on +670 728 7080 or fretilin.media@gmail.com

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