Timor-Leste in 2012: The Harsh Reality of Independence

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Overview

In April 2012, Timor-Leste elected its third president and, not long after celebrating its tenth anniversary of independence on 22 May, elected its third government. After a tumultuous beginning, elections and anniversaries in Timor-Leste had, like the process and problems of development, started to become routine. It could be said that, ten years after independence, Timor-Leste was beginning to consolidate as a democratic state.

The reappointment of Xanana Gusmao as Timor-Leste’s Prime Minister in 2012 confirmed what was becoming a “business as usual” approach to the tiny state’s development. His appointment reflected a broad measure of public intention and reassured most of Timor-Leste’s international partners of its continued stability. Increasingly confirmed as the power broker of Timor-Leste’s politics, Gusmao’s reappointment as the head of the “most voted party” as well as his role in forming a majority coalition fulfilled each of Weber’s three criteria for legitimacy. He had assumed much of the mantle of traditional leadership through appeals to military leadership in combination with a liurai-type¹ status, which, although damaged by the rough and tumble of day-to-day politics, helped him retain considerable charismatic authority and increasingly, if sometimes problematically, helped him to construct his authority based on a rational-legal appeal to improved material conditions, public order, and state building.

The people of Timor-Leste broadly responded in kind. Many identified with appeals to pre-colonial traditions² and unabashed displays of military heroism which often accorded Gusmao a larger than life status and, rationally, responded to a series of economic and other material benefits that came from high albeit uneven flows of government spending. Gusmao was not alone in appealing to tradition, with most political leaders at times presenting themselves in the traditional liurai attire of tais,³ a feathered kaibauk⁴ and a belak⁵ on the chest in recursive complimentarity, as well as a surik⁶ without which no traditional leader would be complete. Other candidates and parties, primarily Fretilin, were less successful in their charismatic campaigns and instead appealed mainly to a rational-legal framework based on sustainable economic development. Timor-Leste was establishing a political style that marked it as being in transition to more or less conventional democratic politics but, after Portuguese colonialism, Indonesian repression and international modernism, one that is also deeply imbued with a series of local identifiers.

Economics, Politics, and Security

Timor-Leste’s transition through the electoral period of 2012 towards the drawdown of UN presence and the complete withdrawal of international security forces raised three key sets of interconnected issues. These three issues were the status of its economic development, the embedding of its political processes, and the country’s increasing sense of stability.

Timor-Leste’s economic development over 2012 also continued to reflect, in line with the reappointment of Gusmao as Prime Minister, “business as usual”. The newly elected government continued to endorse the country’s Strategic Development Plan (SDP) first presented in July 2011 and continued with high levels of government spending, notably on infrastructure — deriving overwhelmingly from the country’s Petroleum Fund. As of mid-2012, the Petroleum Fund was capitalized at US$10.2 billion, with an estimated sustainable rate of withdrawal of 3 per cent.⁷ The Parliamentary Majority Alliance (AMP) government’s budget of US$1,736.4 billion (of which US$33 million was in borrowings)⁸ carried forward under the newly elected government. This expenditure exceeded the sustainable drawdown of Timor-Leste’s capital reserves by approximately five times. Of the budgetary allocation, US$746 million was directed towards infrastructure development, US$200 million for the capitalization of the Timor-Leste Investment Company, and US$52 million for Decentralization Development Programs I and II. Of the government’s budget, approximately 92 per cent was sourced from the Petroleum Fund, with the government in turn providing the overwhelming source of capital for economic growth.

This expenditure was justified by Prime Minister Gusmao on the basis...