Also: SMH: UN & World Bank in Bitter Row Over Aid Deal for E Timor

World Bank grants $21.5 million to rebuild E.Timor

DILI, East Timor, Feb 21 (Reuters) - World Bank president James Wolfensohn announced $21.5 million in reconstruction aid for East Timor on Monday, amid criticism it had dragged its feet in providing funds to help rebuild the ravaged territory.

``I've had...some of my colleagues here living in tents wherever they could get cover, 24 hours a day to get this project going and I frankly find it incomprehensible that people don't recognise that everybody is working their tails off here to get money to East Timor,'' Wolfensohn told a news conference.

He added the bank had not expected to launch any programmes until May.

Wolfensohn earlier visited the coastal township of Manatuto, east of Dili, where there were impassioned pleas for help from church and local political leaders.

``The people sitting here have no food, so can you help us in our plantings?'' said Catholic priest Padre Domingos.

Wolfensohn said the World Bank was ``anxious'' to help the East Timorese and announced 600 million rupiah ($80,000) for six villages in the Manatuto area over the next two to three months.

``This is my first visit to East Timor I have been to other war zones and I have been to other countries that have been ravaged, but the sheer scale and the depth of the destruction was something that surprised me,'' he said.

The $21.5 million -- jointly agreed to by the World Bank, the Asia Development Bank and the United Nations -- will cover two and half years and will be handled by locally-elected East Timorese representatives.

The first $7 million will be disbursed by September.

($1-7420 Rupiah)

Sydney Morning Herald Tuesday, February 22, 2000

UN and World Bank row over aid deal

By MARK DODD, Herald Correspondent in Dili

After a bitter wrangle with the United Nations mission in East Timor, the World Bank has signed off on a $US21.5 million ($34 million) economic grant to help rebuild the devastated territory.

Funding for the Community Empowerment and Local Governance Project (CEP), will be given only if elections are held at village and sub-district levels. The elections are aimed at "taking power away from the centre", said one senior UN official.

But the World Bank's first attempt at rebuilding in the new East Timor has attracted furious opposition from the body overseeing its transition to nationhood, the UN Transitional Administration in East Timor (UNTAET).

The first payment of $US15,000 to each sub-district will be made immediately after councils are established. The election process gets underway from March 1, according to the agreement signed yesterday by the head of the World Bank, Mr James Wolfensohn.

Sources close to the World Bank and UN told the Herald there had been bitter debate over the agreement's wording, with UNTAET preferring "democratic selection" over "elections".

East Timorese sources said relations between independence leader Mr Xanana Gusmao and UNTAET head Mr Sergio Vieira de Mello became increasingly strained as a result.

"It is a small start to building grassroots democracy. It seems like something you would be delighted at and not suspicious," said one World Bank official.

"The UN did not accept it because it would weaken their power over administration and their ability to direct events as a government body," the official told the Herald.

After months of negotiations, the final draft was agreed late on Sunday night.

At least $US18 million in community grants will be available for East Timorese communities and reconstruction projects via the democratically elected community councils.

Another senior official close to the project said he was stunned at the attitude of certain "UN czars".

"This is about giving power to the East Timorese to make decisions as opposed to the UN making decisions for them ... about trying to change the mindset so there is accountability."

Mr Vieira de Mello denied he was opposed to handing power back to the East Timorese.

"It is premature to enter into the political phase. That will come later," he said. -----

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