also: Is Aid Doing More Harm Than Good?; and Starting Over:

TIME Asia March 20, 2000 -Cover Story-

Rising From the Ashes

Charismatic former guerrilla leader Xanana Gusmão brings hope that his beloved

East Timor will finally be freed from centuries of fear

By TERRY McCARTHY Dili

The woman in black is waiting for him. Xanana Gusmão, East Timor's poet-revolutionary and de facto leader, is working his way through a crowd of admirers. When he reaches her, she throws her arms around him and sobs uncontrollably on his shoulder. Her husband and brother were killed by the Indonesian-backed militia last September, she says, so what should she do with her five children? Gusmão holds her for an age, all the time talking in a low, soothing voice. Then he reaches up and gently wipes tears from the woman's face, kisses her on both cheeks and moves on. The mass of people around him have backed off and gone silent.

Gusmão's life is full of such religious moments these days. Minutes later the crowd has raised him on their shoulders, and Gusmão is pumping them up again with his trademark rallying cry: "Viiiiva East Timorrrr, Viiiiva Independencia." They have no food in this village of Padiai in Oecussi district, 175 km west of the capital, Dili. Most of their houses are still charred ruins from the militia's rampage six months ago, and all have tales of torture, rape or murder. But Xanana Gusmão has come to them as a savior and a healer. After 500 years of Portuguese colonialism followed by the 24 years of Indonesian occupation that the East Timorese have endured, Gusmão is promising them freedom from fear--and the crowd is delirious.

When 80% of East Timorese voted for independence from Indonesia last Aug. 30, many outsiders thought it made neither political nor economic sense: 850,000 people living on half an island (Indonesian West Timor occupies the rest), a thousand kilometers from nowhere. The humiliated Indonesian military did its best to make the predictions of disaster come true. As they killed, burned and looted all they could on their way out, they left graffiti on the walls of Dili promising, A FREE EAST TIMOR WILL EAT STONES. East Timor joined the world's list of nations at the very bottom: the World Bank estimated per capita GDP at $240, down among the poorest of the poor along with Mozambique and Ethiopia.

But something remarkable is happening in that half of the island. Gusmão, 53, a former guerrilla leader and political prisoner, has tapped into reserves that are out of reach of the World Bank or the International Monetary Fund, reserves of willpower and pride the people themselves barely knew existed. Combining the authority of Nelson Mandela and the charisma of Che Guevara, Gusmão has been traveling the country, spreading his vision of the future. "All of us must let go of the bad things they have done to us," he said in his first speech after returning to Timor in October, "because the future is ours." The romance of the revolutionary is irresistible to the masses, and he gets rock-star adulation wherever he goes. Timorese may be hungry, but for the first time they are learning to stand on their own feet. Gusmão in turn draws strength from the crowds that surround him. "The man is shaping the nation," says Father Filomeno Jacob, a Jesuit priest in Dili who worked secretly with the resistance from the 1980s. "He believes he is the embodiment of people's hopes."

The cult of Gusmão is not without its detractors. "Like all humans, there are positive and negative factors," says Bishop Carlos Belo, Nobel laureate and head of East Timor's Catholic Church. "He is not 100% savior or hero." The air around Gusmão is musky with the appeal of the poet-warrior, and some of his fellow leaders in the National Council of Timorese Resistance (CNRT), the umbrella group that campaigned for independence last year, are envious of the attention he receives.

Others criticize his personalized, highly emotional approach to politics. "If people saw the way he handles meetings," says Jose Ramos-Horta, who shared the 1996 Nobel Peace Prize with Belo and represented the East Timorese cause overseas for 24 years, "he screams and shouts and pounds his fist on the table--but then he smiles and jokes. He can do it because of his authority."

At the grass roots, this authority is unchallenged. Last month during the visit of Indonesia's reformist President Abdurrahman Wahid, an angry crowd gathered to protest the disappearance of their relatives during the Indonesian occupation. Gusmão immediately jumped off the podium and plunged into the crowd, arguing, calming, pleading and reasoning until, single-handedly, he had pacified several hundred people. Then he led three of the protesters in to meet Wahid, including the widow of David Alex, a resistance leader who was captured by Indonesian troops and presumed executed in 1997. "It was amazing," says Peter Galbraith, former U.S. ambassador to Croatia and now in charge of politics for the United Nations in East Timor, who was present at the meeting. "There was this woman, politely asking Wahid where her husband was buried, and he replied that he would do what he could--and Xanana sitting beside them, smiling."

Stories about the demonstration and how Gusmão had turned it into a form of reconciliation quickly spread through Dili. By nightfall everyone knew how Wahid, charmed by Gusmão, had later gone on to the Santa Cruz cemetery and apologized on Indonesia's behalf for "the things that have happened in the past."

Gusmão's background may not contain much economic theory or public administration know-how. He says he is not suited to the job of running the country. But his ability to reach out to people and bring them together is unmatched. In battered, directionless East Timor, that is the kind of leadership the people need. "This man knows what suffering is," says Father Jacob. "It is not theory."

According to his 1994 autobiography East Timor, One People, One Homeland, Xanana Gusmão was born in Manatuto, 50 km east of Dili "either on the night of the 20th or in the early hours of the 21st of June, 1946, in the scorching heat that ripens the rice." East Timor was a harsh place then, still recovering from the wartime Japanese occupation and laboring under a heavy-handed Portuguese colonial regime. From his childhood Gusmão remembers the groans of prisoners being whipped in public, and early on he learned how the colonials discriminated against those with darker skin.

An unruly pupil, Gusmão was regularly beaten in elementary school. By the age of 12 when his parents dispatched him to a seminary to prepare for the priesthood, he says, he was "already a rebel." After four years of studying with the priests, Gusmão ran away. He ended up teaching Portuguese at the Chinese school in Dili and working for the provincial government as a surveyor--a job that ended when he threatened to punch his boss in an argument over racial discrimination by the Portuguese overlords.

Burning with resentment at colonial rule, Gusmão became a journalist in 1974 and watched with satisfaction as the Portuguese finally decided to leave East Timor. But the following year Indonesia invaded, and Gusmão joined the resistance. He fled into the mists of the mountains that run the length of East Timor and would hide the guerrillas for a quarter of a century. Indonesia's annexation of East Timor was not recognized by the United Nations and virtually all of its member countries, with the notable exception of nearby Australia. Some 200,000 Timorese would be killed by the Indonesians, and the occupation was to be former President Suharto's single biggest foreign policy liability.

The dangerous, romantic life of the revolutionary appealed to the bearded young rebel, as he and his men in the falintil (or Armed Forces for the Liberation of East Timor) resistance tried to stay one step ahead of Indonesian troops. "Sometimes in the mountains a lot of people died, suffered--but we never forgot to sing," he says. "Music for us means many things, but most often it expresses sorrow." In 1975 Gusmão had given up his family, including a wife and two young children: from then on, the struggle for East Timor would fill his life.

Back in Dili, his family was harassed by Indonesian intelligence. "I felt very scared," says his mother, Antonia, now 77. "Sometimes they would come and say he was dead. All I could do was go to church and pray for him." Occasionally intermediaries would smuggle letters to her from her son. She would memorize them quickly and burn them. The Indonesians tried to pressure Gusmão's father, Manuel, to persuade his son to surrender. He told them, "A lion is a wild animal, but he never eats his own." They gave up. By 1981 Gusmão had become the leader of the armed resistance and the most wanted man of the Indonesian special forces. But the steep mountains covered in thick foliage were perfect cover for the guerrillas. It was not until 1992 when Gusmão was on a secret trip to Dili to liaise with the urban underground that he was betrayed by a friend and arrested by the Indonesians.

It may have been the best thing that happened to him. Not only was Gusmão sick from living in the mountains, with their dengue and malaria-carrying mosquitoes. He was also isolated from the outside world. Now he had a platform. At his trial in Dili he used his defense statement to call for a vote on East Timor's future: "Whoever is afraid of the referendum is afraid of the truth." He was sent to Jakarta and quickly became one of the world's most prominent political prisoners, and the campaign to get Indonesia to withdraw from East Timor began to attract attention internationally. Nelson Mandela visited him in 1997 and called for his release. "When I was in Cipinang jail, we started making contact with the pro-democracy movement," Gusmão recalls. "Our independence was not something we could force, but we could perceive it as coming." Although the guards monitored his mail, his sister Armandina sent him Christian prayer cards with key words underlined to spell out secret messages. He replied in kind. To pass the time he wrote poetry and painted from memory the landscapes of East Timor he could not see from his cell.

With the downfall of Suharto in 1998, the new government in Jakarta began talking seriously about some form of autonomy for East Timor. Gusmão himself would have accepted that, had not President B.J. Habibie surprised everyone--particularly his own military--by taking up Gusmão's challenge from six years before of a referendum on full independence. The Indonesian military felt betrayed by Habibie, and they armed and trained militia groups in East Timor to terrorize the population against voting for independence. Gusmão was confident the elections would go his way, but he then faced one of the most difficult decisions of his life. Still nominally head of the falintil resistance guerrillas, he had to give the order for them not to intervene in the massacres that followed the elections.

"Of course it was very difficult, knowing that our people were being killed," he says now. "But we knew the strategy of the Indonesian generals, and we wanted to avoid falling into their trap. They wanted to show East Timorese were fighting each other, so no U.N. intervention would have come." As the killings and burnings by Indonesian-backed militias went on in the early days of September, falintil guerrillas were watching from the slopes over Dili--but they obeyed orders and did not intervene. Three weeks after the independence vote, an Australian-led force sanctioned by the U.N. landed in East Timor to reestablish order and security. One month later Gusmão himself, newly released from house arrest by the Indonesians, arrived back in his homeland. In his first speech in Dili, he had tears in his eyes as he told the crowd: "We knew we would suffer, but we are still here."

Gusmão now works in uneasy alliance with the U.N., which has been criticized by many Timorese as hopelessly slow in delivering economic aid. Six months after the burning of Dili, the majority of the buildings are still without roofs for lack of construction materials. The problems in starting a country from scratch are mindboggling: everything is up for grabs. An initial proposal to use the Portuguese escudo as the currency has been scrapped in favor of the U.S. dollar. Gusmão is still holding out for Portuguese as the official language, although many in the younger generation think English would be more appropriate. An international country code--670--has been approved for East Timor's telephones, though this is still academic since most phone lines were ripped out by the Indonesians last September.

But the single biggest issue will be the political transition--at the moment the U.N. is legally the holder of East Timor's sovereignty, the first time in its history the world body has played such a role. So far no date has been set for elections for the presidency, although the chief of UNTAET (U.N. Transitional Authority in East Timor), Sergio de Mello, says he favors elections by the summer of next year. Gusmão has said repeatedly he does not want to be president. "Our struggle is not for us, but for the young people. Independence needs more capacity than I have."

Gusmão's aides and family believe he really does not want the power. After 25 years of struggle, says his sister Armandina, "he has done a lot for East Timor. As a human he needs to rest." But in East Timor today, Gusmão is more than a human--he has become an icon of a new freedom, bitterly won and still fragile and unsure of itself. The brains, the technical skills for reconstruction--Timorese can get these from elsewhere. Gusmão is their heart, and now, more than ever, they need him to keep beating strongly.

With reporting by Jason Tedjasukmana/Dili

TIME Asia March 20, 2000 -Cover Story-

E A S T T I M O R ' S R E C O N S T R U C T I O N

Is Aid Doing More Harm Than Good?

By JASON TEDJASUKMANA Dili

Full of hope: East Timor's economic future depends in part on the skills of its fishermen. John Stanmeyer/Saba for TIME

The spirits of East Timorese may have revived, but restoring life to their economy may take longer. Nearly 80% of the population is unemployed. So far, the territory's only private businesses--a few bakeries, restaurants, hotels and rental companies--have been opened by foreigners attracted by low costs. Electricity and water are free, and save for a controversial tax on coffee exports, no regulations have been set up to cover taxation, investment and workers' compensation.

East Timorese themselves face limited options. An agreement signed last week by the United Nations and Australia to recover oil and gas from the Timor Sea promises to generate millions of dollars in foreign exchange. But production won't begin before 2004. In the meantime, East Timorese leaders and World Bank officials are pinning their near-term hopes on agriculture and fishing. Mild weather and seasonal rains should ensure that this year's harvest of coffee, at nearly 8,000 tons, will be as good as if not better than previous years'--good news for the one-quarter of the population who depend on the territory's key export. Successful harvests of vanilla, rice, corn, soybean, cassava and sandalwood are also expected to bring in desperately needed foreign exchange and ensure food self-sufficiency. "Agriculture will lead economic growth for some time," says Sara Cliffe, the World Bank's chief of mission for East Timor.

Locals, however, expected more from the millions in international aid promised after the territory voted for independence last August. The armored personnel carriers brought in by Australian-led peacekeepers have torn up East Timor's already poor roads. Rural areas, still subject to blackouts and shortages of water, complain that reconstruction funds have mainly been directed toward the capital, Dili. "All of this money is being poured in, but it's not being distributed properly," says aid worker Galu Wandita. Towns like Gleno, Suai and Oecussi have been so devastated that aid workers privately question whether the $520 million pledged by donors in December will even begin to cover the most basic requirements of sanitation, housing and education.

More worrisome, local resentment has begun to build over the dominant role being played by outsiders in the rebuilding process. Former colonial overlord Portugal has set up postal services, while Australia is providing a mobile phone network. Both have opened banks in Dili, the only two branches operating in the territory. Four currencies--the Indonesian rupiah, Portuguese escudo, Australian dollar and U.S. dollar--are in circulation, baffling local traders trying to keep up with daily exchange rate fluctuations. The U.S. dollar won out over the escudo as the territory's official currency, yet only a select group of Timorese working for the U.N. earn their pay in dollars.