Regulador Petroliferu hetan asistensia saude ne’ebe diak liu

[Link to this blog in English]

Durante fulan ne’e, Autoridade National Petroleu (ANP) Timor-Leste publika sira nia anunsiu iha jornal lokal balu, buka klinika privadu lokal ida ka hospital ne’ebe bele fo asistensia saude ba sira nia staf no sira nia familia. Hanesan ema seluk iha Timor-Leste, sira la satisfas ho nivel asistensia saude ne’ebe fornese husi sistema saude publiku nian no buka hela buat ruma ne’ebe diak liu tan.

La’o Hamutuk fahe preokupasaun sira nian, no ami dala barak husu ba Governu atu gasta barak ba servisu saude duke alokasaun 3.3% deit iha Orsamentu Jeral Estadu 2012, menus liu kompara ho nasaun subdezenvolvidu sira. Maibe ami sente la kontente bainhira regulador iha seitor petroleu no gas deside atu gasta osan husi povo Timor-Leste nia rekursu naturais atu hetan asistensia saude ne’ebe diak liu ba sira nia an duke funsionariu publiku sira seluk.

Bainhira Konsellu Ministru kria ANP iha 2008, La’o Hamutuk foti sai kestaun sira kona-ba ANP nia orsamentu no oinsa atu foti desizaun, ne’ebe la sujeitu ba administrative demokratiku no prosesu fiskalizasaun ne’ebe aplikavel ba instituisaun estadu sira seluk. Ami mos preokupa katak ANP hetan rendimentu direita husi kompania petroleu sira, ne’ebe viola tiha prinsipiu ne’ebe hakerek iha Lei Fundu Petroliferu 2005 ne’ebe hateten katak reseitas petroleu tomak tenke ba rai iha Fundu Petrolifeiru (Artigu 6.1) no aloka liu husi Orsamentu Estadu ne’ebe aprovadu husi Parlamentu (Artigu 7).

Maske prosesu orsamentu ANP nian la transparente ka nakloke ba partisipasaun Parlamentar, ANP publika sira nia relatoriu ne’ebe hatudu katak ANP hetan tokon $1.8 husi Orsamentu Estadu no tokon $4.0 husi taxa no kustu sira ne’ebe selu husi kompania petroleu durante 2011. (Kompania sira mos selu tokon $3,232 ba iha Fundu Petroliferu.) ANP gasta tokon $5.99 iha tinan kotuk, hanesan hatudu iha grafiku de pizza. Ami lahatene osan hira mak sira planea atu gasta ba asistensia saude ba sira nia funsionariu sira iha tinan ida ne’e, ka kategora despeza saida mak ANP atu uza ba ida ne’e.

Iha nasaun barak ne’ebe afeita ho malisan rekursu, ema ho oportunidade atu lasu osan husi atividade petroleu no gas sai privileiju ida, iha klase koruptu. Ami la hanoin katak buat ne’e akontese ona iha Timor-Leste, no espera katak buat ne’e sei nunka mais akontese. Fo atensaun maka’as ba.

Petroleum regulators to get better health care

[Liga ba blog ida ne'e iha Tetum]

Earlier this month, Timor-Leste’s National Petroleum Authority (ANP) published this advertisement several times in local newspapers, looking for a local clinic or hospital which can provide health care for their staff and their families. Like everyone else in Timor-Leste, they are not satisfied with the level of health care provided by the public system and are looking for something better.

La’o Hamutuk shares their concern, and we have often urged the Government to spend more on health care than the 3.3% allocated in the 2012 State Budget, much less than most developing countries. But we are uncomfortable when regulators in the oil and gas sector decide to spend money from the people’s natural resources to obtain better care for themselves than is available to other public employees.

When the Council of Ministers created the ANP in 2008, La’o Hamutuk raised questions about its budget and decision-making, which are not subject to democratic administrative and oversight processes applicable to other state institutions. We also raised concerns that ANP receives revenues directly from oil companies in violation of the principle underlying the 2005 Petroleum Fund Law that all petroleum revenues must be deposited in the Petroleum Fund (Article 6.1) and allocated through the State Budget approved by Parliament (Article 7).

Although the ANP budgeting process is not transparent or open to Parliamentary participation, the ANP publishes reports which show that it took in $1.8 million from the State Budget and $4.0 million from taxes and fees paid by oil companies during 2011. (The companies also paid $3,232 million into the Petroleum Fund.) The ANP spent $5.99 million last year, as shown in the pie chart. We do not know how much they plan to spend on health care for their employees this year, or what expenditure category it will be charged against.

In many resource-curse afflicted countries, people with the opportunity to skim money from oil and gas activities become a privileged, corrupt class. We do not think this has happened yet in Timor-Leste, and hope it never will.  Pay close attention!

Click here to read La'o Hamutuk 4 April response to the comments to this posting.

Timor-Leste atu monu dadauk ba kiak.

[See this blog entry in English]

Durante tinan hirak kotuk ne’e, gastus estadu Timor-Leste sa’e maka’as liu. Bayu-Undan pasa tiha ona nia tempu masimu produsaun mina-rai nian, investimentu Fundu Petroliferu fo retornu ki’ik liu duke saida mak ita espera, kontribuisaun husi ita nia seitor privadu nafatin ki’ik, presu no numeru populasaun sa’e, no ita deve hela hosi rai li’ur. Karik ita kontinua ho dalan ida ne’e, iha 2022, ita nia Fundu Petroleu sei mamuk, ita nia mina-rai besik atu maran, no ita sei selu fali osan inan hosi deve ne’ebe ita foti ba infraestrutura, no joven barak liu dala rua ida agora ne’e sei tama iha kampu de servisu. Ita nia ekonomia naun petroleu nian karik boot liu duke ida agora ne’e, maibe ida ne’e kuaze serteza katak sei labele atu fo rendimentu atu kobre ita nia gastus.

Timor-Leste la’o hela ba dezastre finanseiru. Ho asumsaun konservativu iha grafiku leten, ita sei halo gastus boot liu fali rendimentu ne’ebe ita hetan hosi mina-rai no investimentu iha tinan rua, no ita sei gasta tomak Fundu Petroliferu iha tinan sanulu nia laran. Oinsa ita sei bele finansia servisu publiku hanesan edukasaun, saude, infraestrutura lokal, polisia, tribunal no administrasaun publiku? Oinsa idozus no veteranus sira sei moris wainhira laiha ona osan ba transferensia publiku?

Maske grafiku iha leten halo ta’uk liu, ida ne’e sei optimistiku liu duke realidade agora:

• Orsamentu estadu lolos aumenta barak liu 40% dezde 2010 (34% iha 2012), maibe grafiku ida ne’e halo asumsaun katak aumenta kada tinan 14% de’it depois de 2013, no 11% depois de 2025.
• Rendiimentu domestiku aumenta 16% kada tinan dezde 2010 (12% iha 2011), maibe grafiku ida ne’e espera atu sa’e to’o 25% kada tinan depois de 2013, ne’ebe sei presiza kresimentu ekonomia lalais no aumenta koleksaun taxa.
• Maske Timor-Leste no kompania mina-rai seidauk konkorda kona ba oinsa atu dezenvolve kampu gas Greater Sunrise, grafiku ida ne’e asumi katak Sunrise dezenvolve lalais ho pipeline mai Timor-Leste, no planta LNG ida iha Beacu sei selu hosi kompania sira.
• Grafiku ida ne’e halo asumsaun katak investimentu Fundu Petroliferu sei hetan 4.0% hosi retornu annual nian, maski kazu diak liu to’o agora mak maizumenus 3.6%.
• Grafiku ida ne’e halo asumsaun de’it ba deve ne’ebe diskute iha Orsamentu Estadu 2012 nian, no laiha tan depois de 2016. Osan imprestimus konsidera nudar parte hosi Rendimentu Estadu no gastus (Ezemplu; projeksaun orsamentu sei la hasa’e hosi osan deve), maski selu fila fali tusan aumenta ba gastus estadu nian.
• Depois de Fundu Petroliferu hotu, Estadu sei iha gap ida iha orsamentu estadu tinan-tinan, hanesan hatudu hosi lina mean. Grafiku ida ne’e la inklui selu fila fali karik defisit ida ne’e bele rezolve liu hosi osan deve nian.
• Grafiku ida ne’e iha nominal dollar – ho ida ne’e, la tau konsiderasaun ba inflasaun. Karik presu iha Timor-Leste kontinua atu sa’e hanesan agora ho as liu 15% kada tinan, orsamentu estadu provavelmente sei sa’e maka’as liu tan.

Se ita uza modelu ida ne’e ho asumsaun ne’ebe besik liu ba istoria ohin loron nian, ho orsamentu estadu ne’ebe sa’e 30%, kresimentu rendimentu domestiku anual 22%, dezenvolvimentu Sunrise adia, no hetan funan 3.6% hosi investimentu Fundu Petroliferu, Fundu Petroliferu sei hotu lalais iha tinan haat, lalais liu agora, iha 2018. Iha 2025, ita sei akumula defisit billaun $162!

Maibe, laiha ema ida mak atu fo impresta osan barak hanesan ne’e mai ita, partikularmente wainhira ita hatudu ona ba sira katak ita laiha kapasidade atu jere deve ne’e. Senariu atu hanesan tan mak iha 2018, estadu sei labele selu ninia orsamentu no selu fila fali deve infraestrutura ohin loron nian, no ita tenki ko’a osan ba edukasaun, saude no salariu ba seitor publiku, manutensaun infraestrutura, no servisu seluk. Kiak sei aumenta, no ita sei laiha osan atu importa ita nia nesesidade lor-loron nian, no povu sei mate hamlaha.

Karik ita la muda ita nia diresaun, no lalais, ita atu hetan destinasaun ida ne’ebe agora la'o hela ba.

La’o Hamutuk triste katak Timor-Leste uza ninia riku soin mina-rai no gas lalais tebes, no ami lakohi atu hare ita nia nasaun ida ne’e ba diresaun ida ne’eba. Ami espera katak ami halo erru ruma iha analiza ida ne’e, no ami enkoraja ita boot atu koko modelu ida ne’e ho ita boot sira nia asumsaun. Favor ida download spreadsheet ne’ebe kria grafiku ida ne’e, no hateten mai, ami nia sala iha ne’ebe. Obrigado.

Modelu spreadsheet (planilha) ne’ebe mensiona iha paragraph anterior inklui selulas (B16 atraves B29 iha planilha “DATA”) ne’ebe ita bele muda asumsaun sira – taxa kresimentu despeza estadu nian,taxa kresimentu reseitas domestiku, retornu husi investimentu Fundu Petroleu, karik dezenvolvimentu Greater Sunrise ka la'e, no impresta atu ense defisit orsamental – atu hare oinsa buat hirak ne’e bele influensia rezultadu. Ami publika spreadsheet asumsaun husi grafiku primeiru iha leten, ne'be optimistiku liu. Karik ita hakarak atu halo ida ne'e besik liu realidade ohin loron, ita bele troka numeru sira iha selulas sira ne'e ho numeru iha grafiku segundu, ka numeru seluk ita hakarak atu esplora.

Timor-Leste is going for broke.

[liga ba pajina ida ne'e iha Tetum]

During the last few years, Timor-Leste’s state expenditures have grown rapidly.  Bayu-Undan oil production has passed its peak, Petroleum Fund investments are returning less than we would hope, our private-sector economy remains tiny, prices and population are rising, and we are taking out foreign loans. If we continue on this path, by 2022 our Petroleum Fund will be empty, our oil will be almost gone, we will be repaying the principal on infrastructure loans, and twice as many young people will be entering the work force as today. Our non-oil economy may be larger than it is now, but it will almost certainly not be able to provide revenues to cover our expenses.

Timor-Leste is heading toward financial disaster. With the conservative assumptions in the above graph, we will be spending more than we receive from petroleum and investment income in two years, and will have used up the entire Petroleum Fund in ten. How will we able to pay for public services like education, health care, local infrastructure, police, courts and public administration? How will old people and veterans live when there is no money for cash transfers?

As frightening as the above graph is, it is more optimistic than current reality:

• The state budget has actually gone up by more than 40% per year since 2010 (34% in 2012), but the graph assumes annual increases of only 14% after 2013, and 11% after 2025,
• Domestic revenues have increased 16% per year since 2010 (12% in 2011), but the graph expects them to go up by 25% per year after 2013, which will require both rapid economic growth and increased tax collection.
• Even though Timor-Leste and the oil companies have not yet agreed on how to develop the Greater Sunrise gas field, the graph assumes that Sunrise is developed soon with a pipeline to Timor-Leste and an LNG plant in Beaçu paid for by the companies.
• The graph assumes that investing the Petroleum Fund will earn 4.0% annual return, even though its best returns so far have been around 3.6%.
• The graph assumes only the loans discussed in the 2012 State Budget, none after 2016. The borrowed money is considered as part of State Revenues and expenditures (i.e., projected budgets aren’t enlarged by borrowed money), although loan repayments are added to state expenditures.
• After the Petroleum Fund is exhausted, the State will have an annual budget gap, as shown by the red line. The graph does not include repayments if this deficit is filled with borrowed money.
• The graph is in nominal dollars – that it, it does not consider inflation. If prices in Timor-Leste continue to rise at recent rates of more than 15%/year, the State Budget will probably go up even faster.

If we run this model with assumptions closer to recent history, with annual budget increases of 30%, annual increases in domestic revenues of 22%, Sunrise further delayed, and 3.6% earnings on Petroleum Fund investments, the Fund will be used up four years sooner, in 2018. By 2025, we will have accumulated a deficit of $162 billion!

However, nobody will lend Timor-Leste that much money, especially since we will have shown that we are incapable of managing it. The more likely scenario is that in 2018 the state will be unable to cover its budget and pay back existing infrastructure loans, and we will be forced to drastically cut education, health care, public sector salaries, infrastructure maintenance, and all other services. Poverty will increase, we will not have money to import our everyday needs, and people will starve.

If we do not change our direction, and soon, we are likely to end up where we are headed.

La’o Hamutuk is sad that Timor-Leste is using up its oil and gas wealth so quickly, and does not want our country to rush over this cliff. We hope we have made a mistake in this analysis, and we encourage you to test this model with your own assumptions. Please download the spreadsheet that generated these graphs and tell us where we went wrong. Thank you.

Addendum, 24 March 2012: The spreadsheet model mentioned in the previous paragraph includes cells (B16 through B29 on the "DATA" worksheet) where you can change assumptions -- state expenditures growth rate, domestic revenues growth rate, return on Petroleum Fund investments, whether Greater Sunrise is developed, and borrowing to fill the budget gap -- to see how they affect the outcomes. As originally posted, the assumptions included were as mixture of those in the two graphs above, which confused at least one reader. We have reposted the Excel file with the assumptions as listed in the first graph above, which are more optimistic.  If you want to make it closer to recent actual figures, you can replace the numbers in these cells with those described in the second graph, or with any others you want to explore.

Addendum, 30 May 2012: In response to comments that we were too pessimistic, we re-calculated this model using more optimistic assumptions of future oil selling prices. These imprudent projections, described in another blog posting, extend the Petroleum Fund's life for less than a decade.

Kapres sira hamriik iha ne'ebe kona ba asuntu importante balun?

Iha semana kotuk, La’o Hamutuk distribui Kestionariu ba Kandidatu Presidente Repúblika hotu. La’o Hamutuk husu sira nia hanoin konaba asuntu importante no estratéjiku balun ba futuru Timor Leste nian. Mesmu kandidatu sira seidauk resposta ba ami nia kestionariu, maibe sira koalia asuntu balun durante periodu Kampania nia.

Ami iha planu atu públika resposta husi Kapres hotu ba votante sira molok elisaun, maibe ami la hetan resposta husi kandidatu ida entre kandidatu hirak ne’e, no ami hein katak kestionariu ida ne'e sei bele ajuda iha segunda ronde ba elisaun Presidente no elisaun Parlamentár.

Iha semana kotuk, La’o Hamutuk fo briefing ba jornalista sira no sira seluk hodi fahe informasaun kona ba tópiku sira iha kraik. Bele download briefing ne’e iha Inglesh.

1. Parlamentu Nasional foin lalais aprova Rejime Espesial ba Definisaun Bens Imoveis (direitu asesu ba rai), maibe lei ne’e la respeita direita povu ki’ik no kiak nian atu asesu ba rai. Oinsa ita boot nia hanoin atu protege povu sira ne’e nia direitu?
2. Hafoin tama tinan 2011 Governu halo eviksaun ba ema bara-barak. Saida mak ita bot hanoin Estadu presiza halo antes halo eviksaun? Saida mak ita boot bele halo atu garantia katak povu vulneravel bele moris diak bainhira prosesu desenvolvimentu obriga sira atu muda? Tuir ita boot nia hanoin katak valor naun ekonomia (espiritual, kultural, ambiental) nia valor importante hanesan ho valor ekonomia?
3. Ema barak iha Timor Leste susar atu sustenta sira nia moris. Oinsa Prezidente RDTL bele hamenus kiak iha Timor-Leste?
4. Ohin loron, Timor Leste depende ba importasaun.  Oinsa ita boot nia hanoin Timor-Leste bele  aumenta produsaun lokal atu hamenus dependensia ba importasaun?
5. Timor Leste ninia povu maioria 80% moris nudar agrikultor. Oinsa ita boot nia politika atu bele haforsa ekonomia agrikultura?
6. Autor Krime Kontra Umanidade durante okupasaun Indonesia moris livre ho impunidade. Oinsa ita boot nia hanoin kona ba asuntu ida ne’e?  
7. Oinsa Timor-Leste bele hetan balansu diplomasia ho Indonesia ho obrigasaun legal atu atinje akuntabilidade ba krime 1975-1999? Saida mak Prezidente nia responsabilidade ba lia los, justisa no akuntabilidade? Oinsa ita boot sei uza poder atu fo perdaun?
8. Estadu Timor Leste seidauk asina no ratifika Konvensaun Internasionál Ema Lakon (International Convention for the Protection of All Persons from Enforced Disappearance). Ita boot hanoin Timor-Leste tenki tama iha Konvensaun ida ne’e?
9. Relatóriu Chega, KPP-Ham Indonesia, Komisaun Peritus ONU nian hateten ona katak ONU tenki kria Tribunál Internasionál atu julga krime pasadu se mekanismu iha Timor Leste no Indonesia labele atinje. Oinsa ita boot bele avansa implementasaun rekomendasaun sira ne’e? 
10. Bayu Undan no Kitan sei maran iha tinan 12 oin mai. Oinsa Timor-Leste bele hasai husi dependensia ba petroleu?
11. Durante ne’e Governu gasta hela de’it osan hosi Fundu Petroleu liu Rendimentu Sustentavel Estimadu tinan-tinan. Saida mak ita boot nia hanoin kona ba ida ne’e?
12. Iha debate maka’as kona ba dezenvolvimentu kampu gas Greater Sunrise. Saida mak ita boot nia hanoin kona ba lori kadoras husi Sunrise ba Kosta Sul? No oinsa ita boot bele ajuda atu rezolve fronteira maritima ho Australia no Indonesia?
13. Timor-Leste fo prioridade ba industria petroleu iha Kosta Sul duke investe iha agrikultura, industria ki’ik no seitor seluk ne’ebe sustentavel. Ita boot hanoin katak ida ne’e di’ak ba Timor-Leste iha futuru?
14. Timor-Leste investe oituan deit ba iha edukasaun no saude kompara ho nasaun sira seluk. Ita boot hanoin Timor-Leste tenki fo prioridade liu ba rekursu humanu?
15. Timor Leste iha ona planu atu deve osan husi Kreditor Internasional balun. Saida mak ita boot hanoin kona ba asuntu ne’e?

Timor-oan hotu merese resposta husi ulun boot sira kona-ba pregunta sira ne'e. Ita boot mos?

Where do the Candidates Stand on the Issues?

Nearly two weeks ago, La’o Hamutuk circulated a questionnaire to all the Presidential candidates and their campaigns, asking for their views on issues important to the future of Timor-Leste.  Although several candidates or “Teams Success” told us they would respond, in the end, we did not get any answer other than printed campaign brochures. However, many candidates spoke about these topics as they campaigned around the country.

We had planned to tabulate the candidates’ responses to inform the voters, but the lack of response makes this impossible. However, we translated our questionnaire and hope that it will help focus voters’ decisions on issues, and perhaps inform the Presidential Second Round and Parliamentary elections.

Last week, La’o Hamutuk briefed journalists and others on many of these topics. Download the briefing (in English) here.

1. Parliament recently approved a Land Law, but this law does not respect the rights of little and poor people to access land. How will you protect people’s rights?
2. Since 2011, the Government has evicted many people. What do you think the State should do before evicting someone? What can you do to ensure good lives for vulnerable people forced to move by the development process? Do you think that non-economic (spiritual, cultural, environmental) values are as important as economic values?
3. Many people in Timor-Leste find it hard to sustain their lives. How can the President reduce poverty in Timor-Leste?
4. Today, Timor-Leste depends on imports. How do you think we can increase local production to reduce import dependency?
5. Nearly 80% of Timorese people live by agriculture. What can be done to strengthen the agricultural economy?
6. Perpetrators of crimes against humanity during the Indonesian occupation live freely with impunity. What do you think about this?
7. How can Timor-Leste find the balance between diplomacy with Indonesia and the legal obligation to achieve accountability for 1975-1999 crimes? What is the President’s responsibility for truth, justice and accountability? How will you use your power to grant pardons and clemency?
8. Timor-Leste has not signed and ratified the International Convention for the Protection of All Persons from Enforced Disappearance. Do you think Timor-Leste should join this Convention?
9. The CAVR Chega! Report, Indonesian KPP-HAM, and UN Commission of Experts all recommended that the UN should create an international tribunal to try past crimes if Indonesian and Timorese processes are unable to. How can you advance the implementation of these recommendations?
10. Bayu Undan and Kitan will be empty in 12 years. How can Timor-Leste emerge from dependency on exporting oil and gas?
11. In every year since 2009, our Government has spent more money from the Petroleum Fund than the Estimated Sustainable Income. What do you think about this?
12. There’s a loud debate about the development of the Greater Sunrise gas field. What are your thoughts about bringing the Sunrise pipeline to the South Coast? How can you help resolve Timor-Leste’s maritime boundaries with Australia and Indonesia?
13. Timor-Leste is giving priority to the petroleum industry on the South Coast, rather than investing in agriculture, light industry and other sustainable sectors. Do you think this is good for our country’s future?
14. Timor-Leste invests less in education and health than other nations. Do you think Timor-Leste should give more priority to human resources?
15. Timor-Leste plans to borrow money from international lenders. What do you think about this?

We think every Timor-Leste citizen deserves to have their leaders answer these questions. Don't you?

Borrowing from the next generation

Timor-Leste's voters will choose their next President this weekend and a new Parliament in a few months. But obligations incurred by the current Government will have to be repaid several terms of office from today. This country is about to take out the first foreign loans in its history, with plans to borrow half a billion dollars during the next four years. Link to information about current borrowing plans and how we got here.

This map shows projects in the 2012 State Budget, as well as the road west from Liquica financed by a grant from the Asian Development Bank (ADB). No loan agreements have been signed yet, although the Japanese (JICA) one for the Dili-Baucau road (blue) and the ADB loans for the Dili-Liquica and Tibar-Gleno (red) roads are imminent. The World Bank loans for the roads south from Dili (green) won't be contracted until November 2012, and others are next year or later.

The graph shows La'o Hamutuk's projections of the annual cost of repaying the loans on the map. Figures for the JICA, ADB and World Bank loans come the lenders, but those from China and the not-yet-identified financer for the South Coast Highway are estimates by La'o Hamutuk (yellow cells in the table below).

The map and graph include the following loans:

Project	Financed by	Loan	Grace period (yrs)	Term (yrs)	Interest rate	Total repaid
Dili-Liquica-Gleno roads	ADB ADF concessional	$9.1m	8	32	1.0% / 1.5%	$12m
Dili-Liquica-Gleno roads	ADB OCR commercial	$30.9m	5	25	LIBOR + 0.19%	$46m
Dili-Ainaro, Same, Ermera roads	WB IDA concessional	$20m	10	25	2.5%	$28m
Dili-Ainaro, Same, Ermera roads	WB IBRD commercial	$20m	5	30	LIBOR + 0.46%	$32m
Dili-Baucau road	JICA concessional	$68.7m	10	30	0.7%	$77m
Dili drainage	China Ex-Im bank	$40m	10	25	3.0%	$60m
Manatuto-Natarbora road	ADB commercial (?)	$75m	5	25	LIBOR + 0.19%	$110m
Tasi Mane highway	unknown commercial	$220m	10	20	4.0%	$352m
Total		$484m				$717m

This is only the foot in the door. Some estimate that Timor-Leste may borrow six billion dollars to finance the Strategic Development Plan, and even more if we pay to build components of the Tasi Mane petroleum infrastructure project in addition to the Suai Supply Base.

LH Media Briefing 9 March

An updated, expanded version of the presentation from this briefing is available for download as a PowerPoint presentation (14 MB), a color PDF (2 slides/page, 4 MB) or a black-and-white PDF (6 slides/page, 2 MB) for printing. We welcome your comments and suggestions.

Invitation to a Media Briefing

Rights and Sustainability in Timor-Leste’s Development

Friday, 9 March 2012 10:00 am – noon, followed by lunch

At La’o Hamutuk, Bebora, Dili

[Behind Dili Cathedral on the left side of the main road toward Bairro Pite.  Map]

La’o Hamutuk, a Timorese NGO, has researched, monitored and analyzed the reconstruction and development of Timor-Leste for nearly twelve years. During that time, we have developed a lot of information about past, current and future prospects on a number of key issues which relate to the political future of this country. The briefing will present a brief overview and respond to questions about the following topics:

• Consequences and implications of oil and gas development in Timor-Leste, the most petroleum-export-dependent country in the world.
• Timor-Leste’s incomplete economy and rapidly growing state budget in this young, post-conflict, post-colonial nation, and how it affects people’s security.
• Sustainability, practicality and alternatives to the proposed Strategic Development Plan, Tasi Mane petroleum infrastructure project and impending foreign debt.
• The Greater Sunrise LNG plant and maritime boundary controversies with oil companies and Australia.
• Impunity and accountability for past crimes against humanity.
• Policies and predictions regarding people’s access to land.

We have received requests for interviews from many journalists coming to cover the Presidential election, and we will meet individually when asked. However, we have organized this press briefing to provide information in a more coherent, organized way, to support people who need a quick, deep understanding of Timor-Leste’s current reality and future prospects.

Information on many of these topics is on La’o Hamutuk’s website and blog.  The briefing will be in English and Tetum. Link to PDF version of this invitation.

Thank you for your interest and participation. Please let us know if you plan to attend by email to info@laohamutuk.org, phone to 332-1040 or SMS to 734-8703.

If you spend $400 million, you don’t have it any more.

In late January 2012, Timor-Leste’s Ministry of Finance published the “final” Budget Books for the 2012 State Budget, which document the budget as amended and approved by Parliament and promulgated by the President. Although these books show projected spending for 2013-2016 of about $100 million per year more than the Government told Parliament when they submitted the budget last September, they do not show the Petroleum Fund withdrawals that will finance that spending.  

The Ministry told La’o Hamutuk that the increased spending comes from Parliament’s amendments to the budget, which removed $200 million for the Timor-Leste Investment Corporation but added $111 million in 2012 expenditures and earlier implementation of projects planned for future years.  According to the Ministry’s projection model, Parliament unconsciously increased expenditures in 2013-2016, although these cannot be executed until Government and Parliament enact the budgets for each year.

Compared with the 2012 Budget as presented to Parliament, the “final” budget shows larger future Estimates of Sustainable Income due to Parliament’s reduction of 2012 spending by $89 million, but it does not show reduced ESI from the projected $397 million increase in spending in 2013-2016.

In countries where most revenue comes from converting nonrenewable resource wealth into cash, policymakers often forget that spending costs money. This happens here, as demonstrated by the inconsistency in the “final” 2012 Budget Book 1.  Although the additional $397 million in spending will be financed by withdrawals from the Petroleum Fund, the balance in the fund does not reflect this, so the ESI (Estimate Sustainable Income) is unrevised. In other words, the larger withdrawals in tables 2.2 and 4.2 of Book 1 are not reflected in tables 5.8 and 5.10 of the same book, which attempt to show how much money will be in the Petroleum Fund.

The Ministry made a similar mistake when they proposed the 2011 State Budget to Parliament in late 2010, but corrected it in the final 2011 budget after La’o Hamutuk pointed out the error.

After La’o Hamutuk sent a draft of this article to the Ministry on 22 February 2012, they quickly and quietly revised 2012 Budget Book 1 on their website. We appreciate the prompt response, and hope that this is an indication of future collaboration and good will in preventing Timor-Leste from falling further into the resource curse.

Click for a longer version of this article, with several versions of the tables and calculations.

Click for more information on the 2012 State Budget in English or Tetum.