Timor-Leste

For Timor-Leste, 2014 began with looming political uncertainty. In November 2013, Prime Minister José Alexandre “Xanana” Gusmão announced that he intended to resign from office in the coming year, with September floated as a possible date, ostensibly in order to promote generational renewal of national leadership. According to some accounts, Gusmão’s plan was to establish a small council of senior advisors (of which he would be a member) drawn from across the political spectrum that would provide direction to his hand-selected replacement and new government. But September 2014 passed with Gusmão still in office and continuing to trumpet the benefits of major development projects while dismissing criticism of corruption within his government and passage of new restrictions curtailing basic rights. After a flurry of new rumors in early 2015, Prime Minister Gusmão did in fact tender his resignation to President Taur Matan Ruak on 5 February. A week later, the president approved the appointment of former Minister of Health Dr Rui Maria Araújo, from the opposition party Fretilin, as prime minister, and a slimmed-down new cabinet was announced.

The state budget is the fulcrum around which almost all aspects of politics, development, and social debate in Timor-Leste now revolve, so it is with an overview of the budget that any review of the previous year’s events must begin. The proposed 2014 state budget totaled $1.5 billion—representing a slight decrease from the budget proposed for 2013 ($1.67 billion) but an increase over the amount actually executed the previous year. When the budget was ratified in early 2014, the breakdown by major category was as follows: salaries and wages $167 million (11.1%); goods and services $476 million (31.7%); public transfers $292 million (19.4%); minor capital $40 million (2.6%); and development capital $526 million (35%) (all budget figures are from La‘o Hamutuk 2015).

Development capital, which includes the infrastructure fund, accounted for one-third of the total budget. Within this category the largest allocation was for repair or construction of roads and bridges ($90 million), including a Japanese-supported project to improve the main road from Liquiçá District to the Indonesian border and a World Bank–assisted project to rebuild the major north-south road through Ainaro District to the south coast. Plans for the development of a so-called Petroleum Corridor along the south coast, once promoted through flashy public presentations, wisely has been curtailed, with only $52 million budgeted (out of a total projection of $291 million) for the Tasi Mane supply base near Suai. The proposed new national airport in Dili and the new port facility in Tibar are still in the planning stages so received relatively modest allocations.

The most dramatic—indeed fantastical—addition to the long-term national development plans was passage of Law 3/2014 making Oecusse District a special administrative region and the announcement that the enclave would be the recipient of a huge makeover, including the development of a new port and airport, an industrial zone, and an entirely new planned city called the Special Zones of the Social Market Economy of Timor-Leste (known by the Tetum-acronym zeesm). This project has been handed to former Fretilin Prime Minister Mari Alkatiri, effectively buying off the only serious political opposition. While the long-term planning is for a joint public-private investment of $4.1 billion, the immediate focus is on preparation of infrastructure for the five-hundred-year anniversary of the first arrival of Portuguese explorers later this year and the hope of attracting a visit by Pope Francis in the near future (Yoder 2015).

While much of the discussion by both the government and its critics has focused on the feasibility and utility of these major infrastructure projects, another line under “public transfers” in the national budget has quickly emerged as a mega-project of its own: payments to veterans. Over the past several years the government passed legislation for veterans’ pensions and cash transfers for widows and children of fallen veterans, at staggered rates depending on the number of years of service...