Everyone has the right to free expression and access to information

Committee A of Timor-Leste's Parliament is considering a law to regulate journalists and media.  On 19 February, they invited La'o Hamutuk and the HAK Association to present and discuss our views. Click here for more information, including the text of the draft law.

La'o Hamutuk wrote a submission (Tetum or English), from which the following is abridged:

La’o Hamutuk appreciates the invitation from Committee A to discuss the draft Media Law, and we hope to help you improve this legislation so that it benefits the people and respects democratic values and human rights according to Article 40 of Timor-Leste’s Constitution and Article 19 of the International Convention on Civil and Political Rights, which we have ratified and is legally binding.

The law must not limit everyone's right to access and distribute information freely by defining only a few people as “journalists.” Although Article 17 and a few other parts of the draft law protect people’s rights, many other provisions restrict the rights and freedom for everyone to access, receive and distribute information.

Article 3 limits the Right to Information to “citizens.” This violates the Constitution and the ICCPR, which guarantee that every person (not only citizens) has freedom of speech and the right to inform and be informed impartially. “Citizen” should be changed to “everyone,” which should also be done in preamble paragraph 2, and Articles 6, 11, 13 and 22. Non-citizens should not be barred from being journalists.

Articles 4 and 13 and the definitions in 2(e) and 2(f) support freedom of the press only for professional journalists working for commercial media outlets and certified by the Press Council. They should not exclude others who seek, collect, analyze and disseminate information, which is how the law defines “journalistic activities.” This law should respect every person’s right to free expression, including students, bloggers, web-posters, civil society organizations, free-lancers, part-time reporters, discussion groups, churches, political parties, columnists, researchers, community groups and ordinary people. It should not be monopolized or controlled by for-profit media. Please remove Articles 6-8 from the Media Law and use Constitution Articles 40 and 41 as the legal basis for “journalistic activity.”

Timor-Leste should not have a Press Council, which recalls the unholy partnership between media and the Suharto dictatorship. As freedom of expression is already guaranteed by the Constitution, no Press Council is needed to regulate it. A Council of commercial media organizations and paid journalists can self-regulate their business, including with their Code of Ethics, but their processes cannot be imposed on everyone and should not involve the state, either through financial support or legal enforcement. Furthermore, no journalist should be required to join an organization in order to practice his or her Constitutional rights.

Timor-Leste’s struggle against colonialism and occupation relied on independent and unofficial media. Forty years ago, José Ramos-Horta, Xanana Gusmão, Borja da Costa and others used the Seara bulletin and Radio Maubere to educate, inform and direct the people's struggle for liberation, although they were not “professional journalists” certified by Portugal or Indonesia. Many non-Timorese journalists, including Roger East, the Balibo five, Sander Thoenes, Agus Mulyawan, Kamal Bamadhaj, Amy Goodman and Max Stahl, advanced our struggle beyond our borders; the first nine gave their lives for this country.

Unfortunately, Articles 6 and 13.8 would restrict the activities of journalists from other countries, while the law should reflect the contributions by free media toward achieving and strengthening our peaceful, democratic nation under rule of law, which respects human rights and values.

Although the preamble states that “This Act aims to ensure freedom of the press, promoting the necessary balance between the exercise of this fundamental freedom and other constitutionally protected rights and values,” the law strays far from these objectives. For more than a decade, Timor-Leste has not had a Media Law, with no problems with media and information. After nearly 500 years of repression and censorship, Timorese people can finally exercise our rights to information and free expression. We hope that this law will not move us backwards. Thank you.

At the hearing, Committee A President Carmelita Moniz assured us that this law is only intended to apply to for-profit media companies, not to everyone who engages in "journalistic activities." She also said that "citizen" doesn't only mean "citizen of Timor-Leste," so that non-citizens' rights will also be respected. We hope that the draft law is revised to make this unambiguous.

Update, 12 March: After receiving a 29-page report from Committee A on 11 March, the Parliamentary plenary voted unanimously to approve the law "in generality" but sent it back to the committee to come up with specific amendments.  See our web page for ongoing updates.

Fahe osan de’it

[Link to this blog in English]

Rezultadu ida hosi diskusaun Parlamentár nian ne’ebé taka ba públiku mak aumenta tokon $64 ba “Transferénsia Públiku” iha orsamentu estadu 2014, ne’ebé sei hamenus transparénsia, kontabilidade no boa governasaun. La’o Hamutuk triste ba buat ida ne’e, no triste ba deputadu sira ne’ebé hakarak atu fahe de’it Timor-Leste nia rekursu petróleu ne’ebé limitadu ne’e ho la kuidadu.

Iha tinan balu foin daudauk ne’e, Timor-Leste gasta maizumenus 20% hosi nia orsamentu ba “Transferénsia Públiku” – pagamentu ba ema ka instituisaun sira ne’ebé labele kontrola ho kontratu, la liu tender ka la liu prosesu aprovizionamentu sira seluk no dala barak la husik surat tahan ida ba osan sira ne’e nia ain fatin. Parte boot hosi transferénsia ne’e mak hodi benefisia veteranu sira, maibé iha 2013 Timor-Leste transfere tokon $197 ba benefisiariu ho variedade ne’ebé luan liu. Ba 2014, Governu proposta tokon $292 iha transferénsia, no Parlamentu hasa’e ida ne’e ba tokon $336 hodi aumenta tokon $64 ba transferénsia foun hodi aumenta sa’e, montante ida ne’ebé hanesan ho orsamentu tomak Ministériu Saúde nian.

La’o Hamutuk koko atu foka sai ida ne’ebé boot tebes, maske dokumentu no alterasaun sira nee husik informasaun barak no ami bele la komprende se mak sei simu transferénsia ne’e.

Adesaun loloos iha transferénsia maka tokon $44, tanba Parlamentu hasai tiha tokon $20 ka lori hakat ba kategoria orsamentu sira seluk. Parte boot hosi redusaun 11 mak:

• Tokon $10.5 (96%) hosi Diresaun Nasionál Terras no Propriedade iha Ministériu Justisa, ne’ebé muda ba despeza bens no servisu no la ko’a sai hosi orsamentu tomak
• Tokon $5 (kua 96%) hosi Fundu Kontribuisaun ba Instituisaun Sosiál iha Todo Governu nia okos
• Tokon $2.2 (kua 67%)  hosi Konstributoriu seguransa sosiál iha Ministériu Solidariedade Sosiál

Parlamentu aumenta ka hasa’e transferénsia iha liña orsamentál 17, ho total tokon $64. Sira ne’ebé boot liu mak:

• Tokon $20 (foun) ba kapitalizasaun Banku Central Timor-Leste iha Todo Governu nia okos
• Tokon $20 (4000% sa’e) ba Zona Ekonómiku Espesiál Oecusse, iha Ministériu Presidensia Konsellu Ministru nia okos
• Tokon $5 (242% sa’e) ba Ajénsia Kooperasaun Timor-Leste iha Ministériu Negósiu Estranjeiru (hodi desmobiliza forsa armada sira iha Guinea-Bissau?)
• Tokon $5 (200% sa’e) ba g7+ iha Todo Governu nia okos
• Tokon $5 (67% sa’e) ba Kontribuisaun Finansial iha Todo Governu nia okos (atu selu ba FMI?)
• Tokon $1 (foun) Diresaun Polítika no Dezenvolvimentu Jéneru iha Sekretáriu Estadu Promosaun Igualdade
• Tokon $1 (28% sa’e) ba Diresaun Edukasaun Fíziku no Desportu iha Sekretáriu Estadu Juventude no Desportu (ba Federasaun Football Timor-Leste?)
• Tokon $1 (foun) ba gabinete Ministra Solidariedade Sosiál
• Tokon $1 (12% sa’e) ba Ministériu Petróleu no Rekursu Minerais (servisu auditoria ba Autoridade Nasionál Petróleu?)
• Tokon $1 (20% sa’e) ba Komisaun Nasionál Eleisaun (hodi fó ba partidu polítiku sira?)
• Tokon $1 (20% sa’e) ba pensaun vitalisia iha todo Governu nia okos
• Tokon $0.8 (foun) ba Sekretária Estadu Fortalesimentu Institusional

Infelizmente, alokasaun hirak ne’e la inklui iha orsamentu ne’ebé detallu ne’ebé Governu propoin ba Parlamentu iha Outubru liu ba nia rohan, no Parlamentu halo prosesu “konsensu” ne’ebé lalais iha semana ne’e, ne’ebé la bele fó konsiderasaun ne’ebé sufisiente. Fasil tama, fasil sai.

Handing out the Cash

Liga ba artigu ida ne'e iha Tetum

One of the outcomes of the Parliament’s closed-door budget discussions is $64 million in increased “Public Transfers” in the 2014 state budget, which will reduce transparency, accountability and good governance. La’o Hamutuk is saddened by this development and by the readiness of Parliamentarians to hand out Timor-Leste’s limited petroleum wealth without careful thought.

In recent years, Timor-Leste has spent about 20% of its state budget on “Public Transfers” – payments of money to individuals or institutions which are not controlled by contracts, tenders or other procurement processes and which often leave no paper trail. The largest part of this is for veteran’s benefits, but during 2013 Timor-Leste transferred $197 million to a wide variety of beneficiaries. For 2014, the Government proposed $292 million in transfers, and Parliament is increasing this to $336 million by adding $64 million in new and increased transfers, an amount about the same as the entire Ministry of Health budget.

La’o Hamutuk has tried to figure out what the biggest ones are, although documents and amendments leave out much information and we may have misunderstood who some of the recipients will be.

The net addition in transfers is $44 million, as Parliament removed $20 million or shifted it to other budget categories. The largest of the 11 reductions are:

• $10.5m (96%) from the National Directorate for Land and Property in the Ministry of Justice, which was changed to a Goods and Services expenditure and not cut from the overall budget
• $5m (96% cut) from the Contribution Fund for Social Institutions under Whole of Government
• $2.2m (67% cut) from Contributory Social Security in the Ministry of Social Solidarity.

Parliament added or increased transfers on seventeen budget lines, totaling $64 million. The largest are:

• $20m (new) to capitalize the Central Bank of Timor-Leste under Whole of Government
• $20m (4000% increase) for the Oecusse Special Economic Zone, under the Ministry for the Presidency of the Council of Ministers
• $5m (242% increase) for the Timor-Leste Cooperation Agency in the Foreign Ministry (to demobilize armed forces in Guinea-Bissau?)
• $5m (200% increase) for the g7+ under Whole of Government
• $5m (67% increase) for Financial Contribution under Whole of Government (to pay IMF dues?)
• $1m (new) for the Directorate of Gender Policy and Development in the State Secretariat for Promotion of Equality
• $1m (28% increase) for the Directorate of Physical Education and Sports in the State Secretariat for Youth and Sports (for the Football Federation of Timor-Leste?)
• $1m (new) for the office of the Minister for Social Solidarity
• $1m (12% increase) for the Ministry of Petroleum and Mineral Resources (audit services for the National Petroleum Authority?)
• $1m (20% increase) for the National Elections Commission (to give to political parties?)
• $1m (20% increase) for pensions for former high office-holders under Whole of Government
• $0.8m (new) for the Secretary of State for Institutional Strengthening.

Unfortunately, these allocations were not included in the detailed budget the Government proposed to Parliament at the end of October, and Parliament’s rushed “consensus” process this week does not provide for sufficient consideration.  Easy come, easy go.

Halo buat barak, iha tempu uitoan de’it nia laran, no laiha ema ida mak tau matan

Buat ne’ebé mak “Komisaun Eventual” halo durante semana ne’e

Link to this blog in English

Parlamentu Nasionál kria ona “Komisaun Eventual” ida ne’ebé taka ba públiku atu hare alterasaun ba proposta Orsamentu Jerál Estadu 2014 ne’ebé Governu halo ho montante biliaun $1.5. Komisaun ne’e hala’o hela sira nia enkontru daudauk ne’e ba loron 3-5, atu analiza ba alterasaun 426 ne’ebé Deputadu sira propoin ba orsamentu, no atu hetan konsensus entre deputadu sira. La’o Hamutuk sente katak ida ne’e nudár pasu ba kotuk ida ne’ebé sériu teb-tebes ba ita nia demokrasia, tanba sidadaun sira iha direitu atu rona diskusaun no votasaun ba asuntu importante barak. Públiku mós presiza atu hatene saida mak Deputadu sira dada ba mai, saida mak Deputadu sira hakarak atu goza no kompromisu hirak ne’ebé sira halo ona... no mós saida mak Deputadu sira deside atu la ko’alia sai.

Iha tempu ida ne’ebé badak teb-tebes nia laran, La’o Hamutuk koko analiza ba alterasaun proposta 426, no buat hirak ne’ebé ami foka liu mak ba alterasaun 92 ne’ebé bele muda dollar tokon ida ka liu. Buat hirak ne’e inklui:

• Alterasaun 59 mak ko’a orsamentu ho valor tokon $1 ka liu, hodi halo redusaun hamutuk tokon $467
• Alterasaun 33 ne’ebé aumenta tokon $1 ka liu, hodi halo aumenta hamutuk tokon $260
• Lina orsamentál 17 ne’ebé duplu ka liu
• Lina orsamentál 33 ne’ebé sei ko’a metade ka menus

Alterasaun hirak ne’e mai hosi deputadu sira hosi partidu polítiku sira hotu. Deputadu balu iha hanoin atu kansela projetu orsamentu sira ne’ebé ho planeamentu fraku liu ka projetu sira ne’ebé nia kustu as demais; no deputadu sira seluk hakarak atu aumenta projetu ne’ebé mai hosi motivu pesoál ka rubrika sira ne’ebé Governu haluha durante preparasaun orsamentu nian.

Proposta boboot sira ba aumenta nian mai hosi deputadu sira hosi Partidu CNRT, inklui:

• Tokon $60 atu kria Fundu Finanseiru Internasionál ida hodi fó empresta osan ba governu Cabo Verde
• Tokon $30 ba kapitaliza Banku Central Timor-Leste ne’ebé haluha durante preparasaun orsamentál
• Tokon $26 ba Transferénsia Públiku ba Zona Espesiál Oe-Cusse
• Tokon $15 ba sentru dadus nian ba Ministériu Finansa
• Tokon $14 iha Kapitál Dezenvolvimentu nian ba Zona Espesiál Oe-Cusse
• Tokon $14 tan ba Fundu Kontrapartida iha Ministériu Obras Públiku
• Tokon $10 hodi suporta desmobilizasaun grupu armadu iha Guinea-Bissau
• Tokon $10 tan hodi suporta atividade sira g7+ nian
• Tokon $10 tan ba Ministériu Obras Públiku nian ba estrada rural, ne’ebé foti hosi SEPFOPE
• Tokon $8.3 tan ba konstrusaun edifísiu Ministériu Finansa
• Tokon $6.9 hodi selu quota membru nian ba FMI
• Tokon $5.0 tan ba servisu legal nian
• Tokon $2.5 tan atu sai uma na’in ba simeira CPLP nian

Besik ko’a boot sira ne’e mai hosi proposta deputadu FRETILIN nian:

• Tokon $86 hosi projetu kapitál barak iha Fundu Infrastrutura
• Tokon $55 hosi Transferénsia Públiku, inklui Diresaun Nasionál ba Terras no Propriedade, SEPFOPE, ADN, Fundu Sosiedade Sivíl nian
• Tokon $43 hosi Bens e Servisu, inklui servisu profesional nian, seguransa alimentar, eletrisidade
• Tokon $26 hosi Ajénsia Dezenvolvimentu Nasionál (ADN)
• Tokon $19 hosi Dezenvolvimentu Distritál nian (PDID) (alterasaun hat)
• Tokon $14 hosi projetu Oe-Cusse nian iha Fundu Infrastrutura
• Tokon $13 hosi programa uma MDG-Suco
• Tokon $9.9 hosi Kapitál Minor iha Ministériu balu
• Tokon $9.8 hosi Fundu Dezenvolvimentu Kapitál Umanu iha rubrika balu
• Tokon $7.5 hosi Dezeñu Projetu Foun iha Fundu Infrastrutura
• Tokon $6.0 hosi aeroportu Suai

Maioria proposta alterasaun iha de’it sentensa uitoan ba esplikasaun no justifikasaun. La’o Hamutuk hakarak Deputadu sira iha Komisaun Eventual hodi susesu iha sira nia servisu ida ne’ebé kontroversial, barak liu, ne’ebé halo ho lalais, no importante teb-tebes ne’e. Rata-rata, sira iha de’it tempu menus minutu tolu atu deside kada alterasaun hosi mudansa 700 iha orsamentu estadu 700.

Karik hakarak atu hatene liu tan informasaun kona-ba Orsamentu Jerál Estadu 2014 nian, ita-boot sira bele vizita ami nia pájina web.

So much to do, so little time, with nobody watching

What the “Eventual Committee” is doing this week

The biggest addition would lend $60 million to cash-strapped Cabo Verde.

Liga ba blog ida ne'e iha Tetum

Timor-Leste's National Parliament has created a closed-door Ad hoc Committee ("Komisaun Eventual") to consider amendments to the Government’s proposed $1.5 billion General State Budget for 2014. This Committee is meeting now, for three to five days, to analyze and reach consensus on the 426 amendments which Members of Parliament have proposed.

La’o Hamutuk feels that this is a serious setback for democracy, as citizens deserve to hear the discussion and voting on many significant issues. The public also needs to know what trade-offs, horse-trading and compromises are being made … as well as what the Members have decided not to talk about.

In the short time available, La’o Hamutuk has tried to analyze the 426 proposed amendments, focusing our attention on the 92 amendments which would change a million or more dollars. These include:

• 59 which cut the budget by $1 million or more, totaling $467 million in reductions
• 33 which add $1 million or more, totaling $260 million in additions
• 17 budget lines which would be doubled or more
• 33 budget lines which would be cut by at least half

Amendments come from members of all political parties.  Some are intended to cancel poorly planned or over-budgeted projects; others are to add pet projects or items which were forgotten during the Government’s preparation of the budget.

The largest proposals for additions come from CNRT Party members, including:

• $60 million to create an International Financial Fund to lend money to Cabo Verde’s government
• $30 million to capitalize the Central Bank of Timor-Leste, which was overlooked earlier
• $26 million for Public Transfers for the Oecussi Special Economic and Social Zone
• $15 million for a data center for the Ministry of Finance
• $14 million in Development Capital for the Oecussi Special Economic and Social Zone
• $14 million more for the Counterpart Fund in the Ministry of Public Works
• $10 million for equipment for the new Ministry of Finance Building
• $10 million to support demobilization of armed groups in Guinea-Bissau
• $10 million more to support g7+ activities
• $10 million more to the Ministry of Public Works for rural roads, to be taken from SEPFOPE
• $8.3 million more for the Finance Ministry office building
• $6.9 million to pay Timor-Leste’s membership quota for the IMF
• $5.0 million more for legal services
• $2.5 million more to host the Lusophone (CPLP) summit

Nearly all the large cuts were proposed by members of FRETILIN:

• $86 million from various capital projects in the Infrastructure Fund
• $55 million from Public Transfers, including DNTPSC (Land and Property), SEPFOPE (Vocational Training), ADN, and the Civil Society Fund
• $43 million from Goods and Services, including professional services, food security, electricity
• $26 million from the National Development Agency (ADN)
• $19 million from District Development (PDID) (four amendments)
• $14 million from Oecussi projects in the Infrastructure Fund
• $13 million from the MDG-Suco housing program
• $9.9 million from Minor Capital in various ministries
• $9.8 million from the Human Capital Development Fund in various items
• $7.5 million from New Project Design in the Infrastructure Fund
• $6.0 million from Suai airport

Most of the proposed amendments have only a few sentences of explanation and justification. La’o Hamutuk wishes the Members of the Commission Eventual success in their controversial, huge, rushed and critically important task. On average, they will have less than three minutes to decide on each of the proposed 700 changes to the budget.

See La'o Hamutuk's web page for more information on the budget process.

Presumption of violence

On Thursday, 5 December, about 20 students and activists peacefully protested across the street from the Australian embassy in Dili to urge Australia to respect Timor-Leste's sovereignty and rights to its undersea oil and gas. In their statement (original Tetum), they urged Australia to "stop stealing and occupying the Timor Sea, but show your good will as a large nation which follows democratic principles to accept a maritime boundary based on international legal principles." They were gradually joined by about 20-30 parents and children from the nearby community.

The nonviolent and nonthreatening demonstration was assisted by four Timor-Leste National Police (PNTL) officers who kept the protesters and the traffic separate. After about an hour, the PNTL "Task Force" arrived and, without talking with anyone, immediately fired tear gas to disperse the protesters. The article at left from Diario Nacional describes the excessive force used by police without provocation.

Unfortunately, a Timorese stringer for Agence France-Press (AFP) falsely reported that "About 100 protesters in East Timor have thrown rocks at the Australian embassy," a slander eagerly propagated by media in Australia and around the world. As Mark Twain wrote long before the internet was conceived, "A lie can travel halfway around the world while the truth is putting on its shoes."

On Friday morning we asked AFP to issue a retraction, telling them "We are disappointed that this news report criminalizes the nonviolent acts of Timorese people to ask for our sovereignty and dignity. And we are disappointed that the media in Australia and elsewhere so readily propagate a false report without a single confirmation, photo or byline." AFP took eleven hours and police confirmation that the protest was peaceful before they retracted the slander.

Their revised article is more accurate, but more than 24 hours after it was issued, Google found it on the internet only 17 times, while the original one still shows up more than 2,000 times.  Australian radio (audio) also corrected the false stoning report, creating a new controversy by contrasting the facts with police claims that no tear gas was used.

On Friday afternoon, about 100 people joined a three-hour nonviolent demonstration across from the Embassy, with full cooperation of the police. Two representatives were invited into the Australian embassy to give their statement to Ambassador Miles Armitage, who told them he respects their right to demonstrate and will communicate their concerns to Canberra. Although this demonstration was covered by Timor-Leste television and Tempo Semanal, it was largely ignored by the international media, perhaps because all parties behaved peacefully and responsibly.

Today marks the 38th anniversary of Indonesia's invasion of Timor-Leste, beginning a quarter-century of illegal military occupation which killed more than 100,000 Timorese people. The Indonesian military's horrendous violence, abetted by Australia and the United States, was rarely covered by international media and most people around the world were oblivious to it until the 1991 Santa Cruz massacre.

Why are the world's media so eager to report lies about violence committed by people from Timor-Leste, but so reluctant -- in the past and still today -- to report truthfully on those who commit violence against them?

Follow this link for more information about the maritime
boundary dispute between Timor-Leste and Australia.

As others see Timor-Leste

November-December is scorecard time, as international organizations publish their annual ratings of various nations.  Transparency International just released their 2013 Corruptions Perceptions Index, the U.S. government’s Millennium Challenge Corporation released their FY 2014 Scorecards, and the World Bank published its Doing Business 2014 Report, each of which compares Timor-Leste with the world. Earlier this week, the IMF released its 66-page Article IV Staff Report (including statistics and a Debt Sustainability Analysis) on Timor-Leste. Many of these indicators reflect a neoliberal, corporate-oriented, pro-globalization perspective which La’o Hamutuk doesn’t agree with. Nevertheless, they are important to understand in this largely unregulated economy which seeks investor-driven economic growth.

This article summarizes key points from each report, with links to the originals. It is not a pretty picture.

Corruption Perceptions Index by Transparency International (TI)

Timor-Leste scored 30 out of 100 this year, ranking 119th out of 177 countries. This is a little worse than last year, when our score of 33 earned us a rank of 113th out of 176. TI uses “a combination of surveys and assessments of corruption, collected by a variety of reputable institutions” to develop its index, although Timor-Leste’s score is calculated from only three sources. For more information and graphics, see Transparency International’s website.

Timor-Leste Scorecard from the Millennium Challenge Corporation (MCC)

The MCC is a U.S. government agency which enters into long-term “Compact” aid agreements with developing countries which meet certain criteria. Although Timor-Leste has not passed the “compact-eligible” hurdle for many years, we are nearing the end of a three-year MCC Threshold Program which is designed to raise our scores on the Child Health and Control of Corruption indicators. Although both of these scores improved slightly compared with a year ago, they are still far from passing, which would require that we do as well as at least half of the 26 other Low-Middle Income Countries.  In the new scorecard, Timor-Leste passed the same indicators as last year. We improved (+) on nine indicators (most of which we already pass), dropped (-) on six, and were unchanged on three, as follows:

Passed
• Fiscal Policy
• Freedom of Information (+)
• Political Rights (+)
• Natural Resource Protection (+)
• Health Expenditure (-)
• Civil Liberties (+)
• Inflation (+)
  Failed
• Trade Policy (-)
• Regulatory Quality (+)
• Control of Corruption (+)
• Access to credit (-)
• Land rights and access
• Child health (+)
• Immunization Rates (+)
• Business Start-Up (-)
• Government Effectiveness (-)
• Rule of Law (-)

For more information, history and links, see La’o Hamutuk’s web page on the MCC or MCC’s website.

Doing Business Report from the World Bank and International Finance Corporation (IFC)

Every year, Doing Business rates every country on how easy it is for businesses to operate, such as taxes, business registration, contract enforcement, bankruptcy procedures, construction permits, registering property, credit, protection for investors and other regulatory issues.

Earlier this year, Doing Business published a special report comparing g7+ countries with data from DB 2013, as in the graph at right.

They published their DB 2014 global and Timor-Leste reports last month.  In spite of much effort by the IFC, Bank and Government to make Timor-Leste more business-friendly, Timor-Leste dropped five places, from 167th to 172nd out of 189 economies.  We improved slightly in the Paying Taxes indicator but worsened or remained the same in all other categories. For more information, see the Doing Business website.

Article IV Consultation from the International Monetary Fund (IMF)

The IMF sends an assessment team to almost every country almost every year. About a week ago, they released their detailed report from an assessment conducted last June, which had been summarized in an October press release. In addition to describing IMF and Government views about macroeconomic and budget issues, the report includes a Debt Sustainability Analysis, Statistical summary, and updates.  The IMF raised many points – La’o Hamutuk agrees with some but not with the ones in orange:

• As “one of the most natural resource dependent countries in the world with large developmental needs,” Timor-Leste needs to diversify its economy to generate jobs and reduce poverty, while preventing “rent-seeking behavior.” The “many uncertainties” about future oil revenues after Bayu-Undan production ends in 2024 make diversification crucial. [After the IMF report was written, Bayu-Undan projections were sharply downgraded; production will now end in 2020.]

• Growth in the productive, labor-intensive sectors of the economy, such as agriculture and manufacturing has been weak, with government spending leading to high imports and inflation. Medium-term growth should be led by the private sector, which must move away from government projects to agriculture, manufacturing and private services.
• Public spending should be limited to sustainable levels, targeted on projects with high socio-economic returns. The ‘Yellow Road’ scenario presented by the Ministry of Finance should be followed, to achieve “substantial moderation” in “high levels of government spending.” [When the IMF team visited in June, they were told the state would only spend $1.2 billion in 2014 and $1.3b/year in the medium term, but the 2014 budget proposed to Parliament in October will spend $1.5b, so many of the IMF’s projections are already inaccurate.]
• Petroleum Fund withdrawals should not exceed ESI.
• The currency should remain the US dollar for the medium term.
• Borrowing should be coordinated with Petroleum Fund balance, but the Fund should not be used as collateral for debt.
• Hidden debts, such as those which could be incurred by TimorGAP, should be avoided. Public-Private Partnerships (PPPs) and Special Economic Zones should be approached with caution.
• Management systems in the Government and Central Bank should be strengthened, as should statistical data collection and knowledge transfer to reduce dependence on foreign staff.
• The budget gap should be filled by concessional borrowing.
• Minimum wages should be lowered to be in line with ASEAN.