Media Release: FRETILIN welcomes President's call for respect for Petroleum Fund, commits to cooperation

FRENTE REVOLUCIONÁRIA DO TIMOR-LESTE INDEPENDENTE
FRETILIN

Media Release
May 26, 2008


FRETILIN welcomes President's call for respect for Petroleum Fund, commits to cooperation

Dili: The leader of the FRETILIN parliamentary group, Aniceto Guterres, has welcomed calls from President Jose Ramos-Horta for the de-facto AMP government to operate within the existing petroleum fund laws and not to unnecessarily and unilaterally withdraw additional revenue from the Fund.

"FRETILIN supports the president and what he said regarding the management of petroleum receipts and budget preparation and execution," said Guterres. FRETILIN is the largest party in the National Parliament.

In his speech to the nation on the sixth anniversary of Timor-Leste's restoration of independence on 20 May 2002, President Ramos-Horta praised the work by the Alkatiri government in establishing a strong petroleum revenue stream for the people of Timor-Leste.

This was President Horta's second major address since returning from Australia after having survived an attempt on his life on February 11, 2008

Dr Ramos-Horta said: "…we should acknowledge the success of the negotiations regarding petroleum, which culminated in the Timor Sea Treaty and the creation of the Petroleum Fund, an institution recognized internationally as among the best in the world.

"At this time, we have a Petroleum Fund with nearly USD$3 billion that can be utilized by the current government, without needing to amend the law in force, as long as the government can demonstrate its capacity to bring about good budget management and execution, and it can put forward convincing plans and programs to the mandated institutions," President Ramos-Horta added.

Mr Guterres commented: "These are very clear and strong indications of the President's desire to see a responsible, inclusive and consultative approach to ongoing management of the National Petroleum Fund establishment by the FRETILIN government. It reflects what we have been saying since the fund began in 2005 and when we opposed Mr Xanana Gusmao's calls for amendments and more money to be used from the petroleum fund. These statements by the President clearly support our prudent and realistic approach to revenue management and budgeting."

In November 2007 Timor-Leste's much praised Petroleum Fund was ranked No. 3 in the world out of 32 similar state-owned funds in 28 countries, by the renowned Washington think tank, the Peterson Institute for International Economics. It has been widely acclaimed by international donors, the multilateral institutions such as the World Bank and IMF and other international experts, for its transparency, accountability and security.

The current Petroleum Fund Law is also domestically valued and respected, having attained national consensus in its establishment. It won unanimous approved in the previous parliament, with every political party (except CNRT) which is now represented in today's parliament voting in favor of it, though current CNRT members of parliament who were in the last parliament (as members of other parties) also voted for it.

"No changes should be made to this petroleum fund institution and petroleum revenue management framework without undertaking an equally wide public consultation process over the same period of time. Any legislative amendments without this will lack legitimacy. However, we also believe that the de-facto government would find it hard to get the numbers to make any of the proposed changes," added Gueterres.

One changes would allow the government to take more revenue annually to have a larger budget. The current budget is already twice the last FRETILIN government budget and four to five times the average budget FRETILIN had available for 2004-2006.

"FRETILIN stands by its election promise to strongly defend Timor-Leste's Petroleum Fund from irresponsible and wasteful spending raids by the de-facto AMP government. They have delivered nothing for the poor of our country despite having had two huge budgets between August 2007 and today. But what we now see are only a lot of new cars, a lot of corruption, a lot of handouts that do not benefit all of the very needy in our society, and a very few from the business and political elite getting very rich. We see the diversion of resources away from those who truly need them, but little for the people," said Guterres.

"As President Ramos-Horta said, they have to demonstrate better budget execution and acceptable plans and programs to the parliament and society. We agree with that. It is too dangerous to the Petroleum Fund to do otherwise until these assurances are in place. We will hold the de-facto government accountable in the parliament on this," added Guterres.
In his first address to the National Parliament on his return from Australia after the February 11 attempt on his life, President Ramos-Horta asked the AMP de-facto government to utilize the extensive governance knowledge and experience of former FRETILIN ministers, such as Dr Mari Alaktiri, Estanislau da Silva, Jose Teixeira and Ana Pessoa to address the critical question of how to ensure the petroleum fund revenues are used to help the poorest of the poor in Timor-Leste, in light of the current world food price crisis.

"FRETILIN has stood ready to work together with all the political forces in our country to find a consensus-based approach to try to resolve the nation's problems and overcome the challenges before us all as Timorese," said Guterres.

"In his May 20 address to the FRETILIN faithful, which also included the presence of a number of foreign ambassadors, our Secretary General, Dr Mari Alkatiri, publicly stated that he is prepared to meet at any time with Mr Xanana Gusmao to discuss how we can all move the country forward. He awaits Mr Gusmao's response," concluded Guterres.

Contact: Jose Teixeira +670 728 7080;
Nilva Guimaraes +670 734 0389