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.

Audiensia ba Proposta Orsamentu 2014 hahú ona

Link to this blog in English

Maski governu tarde loron sanulu atu aprezenta nia Proposta Orsamentu Jeral Estadu 2014 ba Parlamentu Nasionál, sira hakarak Parlamentu sei aprova orsamentu ne’e molok loron Natal no Deputada/u sira hahú ona audiensia “públiku.” Bele asesu oráriu ba audiensia públiku iha ne’e.

Iha mudansa pozitivu katak Ministériu Finansas publika versaun eletróniku ba livru OJE neen iha sira nia pájina web iha loron 25 Outubru, loron hanesan sira mós haruka orsamentu ne’e ba Parlamentu Nasionál. Loron ida antes Ministériu ne’e mós publika sira nia aprezentasaun no matéria seluk iha semináriu Parlamentár. Dokumentu sira ne’e, ho análize kle’an iha Ingles no Tetum, iha La’o Hamutuk nia pájina web kona ba OJE 2014 ne’ebé sempre atualiza.

Ami apresia ho envelope fiskál tomak ne’ebé hatún hosi billaun $1.65 iha OJE 2013 ba billaun $1.5 iha proposta orsamentu agora. Boot liu hamenus hosi alokasaun orsamentu ba projetu infrastrutura boot ne’ebé dala ruma labele implementa tuir tempu. Maibé alokasaun rekurente kontinua sa’e, no ezekusaun gastu durante tinan 2013 sei atinje dala ruma menus hosi billaun $1.2, nune’e proposta OJE 2014 sei aumenta despeza 25%. La hanesan ho tinan 2013, iha OJE 2014 nafatin foti liu Rendimentu Sustentavel Estimativa (RSE/ESI) hosi Fundu Petrólifeiru, tokon $903 (tokon $632 iha RSE). Espetasaun ba reseita petrólifeiru iha futuru sei tun liu tanba produsaun no mós presu estimadu sei menus, kampu Bayu-Undan no Kitan sei maran molok tinan 2020.

La’o Hamutuk kontente atu haree kreximentu alokasaun ba saúde no edukasaun, maibé setór hirak ne’e nafatin ki’ik liu tuir padraun internasionál. No mós setór agrikultura nudár vida moris maioria povu Timor-Leste ladún hetan atensaun maka’as iha Timor-Leste. Maski auto estrada iha Kosta súl hasai ona, maibé parte balu hosi Projetu Tasi Mane ne’ebé sei nafatin hela iha orsamentu.

Infelizmente, Parlamentu sei rona testemuña hosi Organizasaun Naun-Governmentál uitoan liu duke iha tinan pasadu. Maski La’o Hamutuk hetan konvite hosi Parlamentu Nasionál halo aprezentasaun no observa iha audiensia no seminar iha prosesu orsamentál hitu ne’ebé hala’o dezde tinan 2009, tinan ida ne’e sira la konvida ami, maibé ami sei kontinua análiza ba impaktu proposta orsamentu ba Timor-Leste nia futuru. La'o Hamutuk haruka ona karta ba Deputada/u sira. Ami esplika asuntu balun, hanesan karik PN konvida ona ami atu fo submisaun.

Ami espera katak sidadaun no organizasaun sira seluk mós komunika ho Parlamentu Nasionál, no katak debate tuir mai sei bazeia ba faktu, ativu, transparente no hetan rezultadu di’ak.

Hearings begin on 2014 budget proposal

Liga ba blog ida ne'e iha lingua Tetun.

Although the Government was ten days late in submitting its proposed 2014 State Budget to Parliament, Parliament still hopes to approve it before Christmas and has begun "public" hearings. Download the hearing schedule here.

In a positive development, the Ministry of Finance posted electronic versions of the six budget books to their website on 25 October, the same day they sent the budget to Parliament. The Ministry also released their presentation (Tetum) to a Parliamentary seminar the previous day. These and other materials, with deeper analyses in English and Tetum, are on La'o Hamutuk's frequently updated web page on the 2014 budget.

We appreciate that the overall fiscal envelope has been reduced from $1.65 billion in the 2013 budget to $1.5b in the proposed one, largely by cutting funding for infrastructure mega-projects which were unlikely to be implemented on schedule. However, recurrent appropriations continue to go up, and executed spending during 2013 will probably be less than $1.2b, so the 2014 proposal still represents a 25% increase. Unlike in 2013, the 2014 budget again spends more than the Estimated Sustainable Income from the Petroleum Fund, $903 million (ESI is $632 million). Expected future oil revenues have dropped markedly due to lower production and price forecasts; the Bayu-Undan and Kitan fields will by exhausted by 2020.

La'o Hamutuk is glad to see increased appropriations for health and education, although they remain below international norms.  However, agriculture, the livelihood of most Timorese people, is still under-served. Although the South Coast Highway has been cut, other parts of the questionable Tasi Mane project remain in the budget.

Unfortunately, Parliament will hear from many fewer non-state witnesses than in past years. Although Parliament has invited La'o Hamutuk to present or observe at hearings and seminars for all seven budget processes conducted since 2009, they did not do so this time. Nevertheless, we will continue to analyze the impact of this budget on Timor-Leste's future, and have written to Members of Parliament (Tetum original) explaining some issues we would have discussed if they had invited us to testify.

We encourage others to study the budget proposal and to share their thoughts with Parliament. We hope that the upcoming debate will be fact-based, lively, transparent and productive.

[This post was updated on 11 November 2013.]