Subject: RT: Free ETimor would struggle but survive
Date: Thu, 28 Jan 1999 10:04:50 -0500
From: "John M. Miller" <>

ANALYSIS-A free E.Timor would struggle but survive 07:56 a.m. Jan 28, 1999 Eastern

By Terry Friel

JAKARTA, Jan 28 (Reuters) - Four centuries ago, the Portuguese sailed halfway around the world to plunder the sandalwood riches of East Timor, trading for fabulous profit in the markets of India and Persia.

Now, the bloodied territory would be pushed into subsistence survival for years, living on foreign charity, if Indonesia ever lets the eastern half of Timor island go it alone, diplomats and analysts said on Thursday.

Decades of torpor under the Portuguese after World War Two and 23 years of iron-fisted military rule under Indonesia, have left the impoverished territory of 800,000 people with no industry to speak of, a poorly educated workforce and high unemployment.

But analysts believe an independent East Timor could survive economically, albeit with foreign help, to eventually develop a tourism industry and lure foreign investment.

That is, if it can keep a lid on simmering rivalries dating back centuries and fostered by the Indonesian armed forces (ABRI) to help control opposition to Jakarta's rule.

``I have no doubt that it can support itself,'' said Australian-based Indonesian academic Arief Budiman. ``They won't be rich, it might be hard work, but they could do it.

``The real problem is not economic, it's political because of the past conflict between those who want independence and those who support Indonesian rule,'' the Melbourne University professor told Reuters.

Indonesia, bowing to world pressure, said on Wednesday its top legislative body might consider independence for East Timor. It offered the territory special autonomy. But if this offer were to be rejected, Foreign Minister Ali Alatas said the granting of independence could be considered after the June 7 national election.

In addition to its oppressive military presence, Indonesia has exploited tribal rivalries in East Timor, pitting Timorese against Timorese to help suppress the pro-independence movement.

``There's more than a small chance that this sort of thing could blow up as soon as the last one (soldier) leaves,'' said a Western diplomat.

Many fear a return to the bloodshed of the mid-1970s when civil war erupted after the Portuguese colonial rulers left suddenly following a change of government in Lisbon.

Most of the recent violence -- the government's human rights commission says 50 people have died in six months -- has been between rival Timorese groups. Many, including the Human Rights Commission accuse ABRI of arming pro-Jakarta gangs.

``My main concern is whether East Timor can survive by itself,'' Indonesian political analyst Mohammad Hakim told Reuters.

``I'm afraid an internal uproar will erupt because the political infrastructure is not ready for independence.''

Under Indonesian rule, millions of dollars have been pumped in for infrastructure but few Timorese have received university education or risen far in business or government ranks, starving the community of the experience needed to run a country.

Indonesians from Sulawesi or from Java dominate many of the local small businesses.

Even with peace, it would take years for East Timor to build any worthwhile industry.

East Timor's main resources are coffee, sandalwood, marble and copra. But sandalwood is depleted.

And East Timorese Arabica coffee, although among the best in the world, does not even figure in production statistics for Indonesia, the world's third-largest coffee producer.

Australia and Indonesia do have a production-sharing agreement for an oil and gas zone between Timor and northern Australia, but this Timor Gap has so far failed to meet the high expectations many had when the treaty was signed in 1989.

But East Timor has rich fishing stocks which could be exploited. And its clear tropical waters, sandy beaches and striking inland mountains, along with its proximity to Australia, offer big potential for tourism.

Budiman also sees potential for business in the long term if East Timor can capitalise on its cheap labor.

``If they put sound laws in place, if they can maintain political stability, they could attract a lot of foreign business, from Taiwan, from South (Korea), from Australia,'' he said.

``They will have to rely on foreign aid for quite some time.

``But it's a lot more manageable than some African states.''

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