Media Release: FRETILIN: Growing opposition to Gusmão's maladministration and bad governance

FRENTE REVOLUCIONÁRIA DO TIMOR-LESTE INDEPENDENTE

FRETILIN

Media Release

July 19, 2007

FRETILIN: Growing opposition to Gusmão's maladministration and bad governance

There is growing opposition to the misadministration and corruption of the Gusmão government with members of a key parliamentary committee and a key independent parliamentary consultative body rejecting the government's request to withdraw from the Petroleum Fund an amount greater than the benchmark "sustainable income"*.

The defacto Gusmão government wants the additional money from the Petroleum Fund for its revised budget.

FRETILIN parliamentarian and leader in parliament Aniceto Guterres said, “The Economy, Finance and Anti-corruption parliamentary committee met yesterday (Friday 18 July) and delivered a report on the mid year budget recommending against the government’s request to withdraw USD$290 million in excess of the sustainable income amount.

“The decision of the parliamentary commission comes in addition to the Petroleum Fund Consultative Council’s recommendation to National Parliament that it refuse to authorize the transfer of funds from the Petroleum Fund to the government budget, because the government has failed to justify that it needs the extra money from the Fund.”

The Petroleum Fund Consultative Council is an independent body that is legally mandated to oversee the workings and future of the fund and is made up of civil society and representatives of religious confessions.

The members of the Council are independent from any political party.

Guterres said, “The decisions of the parliamentary committee and the Petroleum Fund Consultative Council reflect the wide spread and growing concern and suspicion about misadministration and corruption within the Gusmão government.

“Even members of Gusmão’s own CNRT party who sit in the parliamentary committee voted against the government's request”.

Guterres added, “The Gusmão government has only actually spent 22%, or USD$77.3 million, of this year's annual budget of USD$347.7 million, which is the largest in Timor-Leste's history and far greater than any of the budgets of the previous FRETILIN governments.

“It is ludicrous that a government that is incapable of spending even a fraction of the budget, and who is also the subject of many allegations of maladministration and corruption, would ask for a mid year budget increase in the amount of USD$425.6 million (taking this year’s revised budget to USD$773.3 million).”

Guterres said that if the excessive withdrawal from the fund is approved by parliament, the government would have used over USD$1 billion in just one year, when you take into account that the government also had a transitional budget of in excess of $300 million for the period between September 2007 to 31 December 2008.

“This will mean that 43% of the Petroleum Fund's current reserves of USD2.3 billion will be spent in just one year.

“We call on other members of parliament and civil society to follow the lead of the Economy, Finance and Anti-corruption parliamentary committee and the Petroleum Fund Consultative Council in expressing their opposition to this irresponsible budget.

“It is not only them or FRETILIN which have expressed concern. Other political parties, including the National Unity Party, ASDT and KOTA/PPT, as well as business groups and civil society in general have expressed their opposition to this irresponsible and questionable budget. But mostly they question the raiding of the petroleum fund, which has been acclaimed around the world.

“If the AMP members in the parliament authorize the withdrawal, then they will be flying in the face of overwhelming public opinion in this country. We urge them to question this government’s direction, just as they did with the government’s ludicrous gun laws that were defeated in this parliament, which was out of step with public opinion on the issue,” said Guterres.

The Timor-Leste parliament began debate on the government's proposed budget revision yesterday (Friday 18 July).

Background notes:

* The Sustainable Income (known formally as the “Estimated Sustainable Income”) is calculated under the Petroleum Fund Law and informs the Government, National Parliament and civil society of the maximum amount of money that should be withdrawn from the Petroleum Fund in any given year to fund government spending. The Estimated Sustainable Income for the 2008 budget is USD$396.1 million.

If the government wants to withdraw more than the Estimated Sustainable Income it must first obtain the approval of National Parliament. As part of that approval process, the Government must set out its reasons why its total annual withdrawals from the Petroleum Fund should exceed the Estimated Sustainable Income and present them to the Petroleum Fund Consultative Council, who in turn provide their opinion to National Parliament. The aim of the Estimated Sustainable Income is to assist Timor-Leste avoid the “resource curse” experienced by other Third World resource rich nations. It does this by acting as a guide to Timor-Leste on how to spend its petroleum wealth sustainably, with the aim of creating inter-generational equity so that both current and future generations can enjoy the benefits of the petroleum resources.

For more information, please contact: Jose Teixeira +670 728 7080