Associated Press July 16, 2000

Land Disputes Disrupt E. Timor

By DANIEL COONEY

DILI, East Timor (AP) - No one knows who really owns the blackened, burned-out building where Canadian businessman Kirk MacManus is trying to set up East Timor's first supermarket.

A Portuguese man claims it, saying the army threw him out when Indonesia invaded in 1975. Later, it housed an Indonesian bank. Then came East Timor's secession last year.

Dozens of East Timorese moved in soon afterward, claiming that since their country had been illegally occupied for centuries, the building and land rightfully belonged to them.

U.N. administrators in East Timor don't know who to believe.

This half-island's layered history, as colony, territory and now nascent nation, means that land disputes are proving to be one of the greatest stumbling blocks to the economic development needed to sustain it as an independent country.

Without clear ownership laws and with many government records destroyed in a rampage by pro-Indonesian militias, businesses are reluctant to invest in long-term projects.

The precedents are unsettling for potential investors. In December, the United Nations ordered an Australian businessman to close a hotel he had just built in Dili, because it stood on disputed land.

After centuries of colonial misrule by Portugal and 25 years of corrupt and repressive Indonesian occupation, newly independent East Timor is one of the poorest places in Southeast Asia.

Much of its infrastructure and most of its buildings and homes were destroyed by pro-Indonesia militia after an overwhelming majority of East Timorese voted to break away in August 1999.

Apart from a handful of service companies setting up shop in Dili, hoping to profit from the United Nations' short-term presence there, East Timor's private sector barely exists.

Unemployment runs at about 80 percent and there is little hope that things will improve soon. Most jobs in the cities disappeared when existing businesses were destroyed last year.

Foreign investment, considered vital to reviving the shattered economy, is only trickling in, U.N. officials say.

``Who is going to invest in East Timor if we are unable to provide them with guarantees that the land on which they will be establishing their head office or their business is theirs, or can be leased to them for an acceptable period of time,'' said Sergio Vieira de Mello, the U.N.'s top administrator.

Many Portuguese, Indonesian and East Timorese citizens have lodged claims for the same farm, shop, house or vacant plot of land, he said.

U.N. administrators have no land ownership records for the territory and De Mello said neither Indonesia nor Portugal have been forthcoming with copies of theirs.

Until the problem can be solved, the world body is only granting leases of up to 12 months to incoming companies.

A handful of businesspeople are gambling that they'll be able to turn a profit within that time.

MacManus, whose Australian-owned company, Supreme Boot Service Ltd., plans to invest about $300,000 in turning an almost totally destroyed building into a supermarket, said he stands to lose most of it if the lease isn't extended.

``We have no idea if we can keep the property for a second year,'' said MacManus, walking around the charred remains. ``It's a real big risk for anyone trying to do business here and scares away many people.''

Unless U.N. officials quickly resolve the problem, the new nation risks being left without a functioning economy when the transitional administration pulls out in about two years' time.

The United Nations intends to set up an independent tribunal in the next few months to arbitrate claims. But with hundreds of cases in the pipeline, that could take years.

A Portuguese woman who returned to Dili decades after fleeing the Indonesian invasion said the disputes are not just limited to commercial property.

``No one knows who owns what,'' Alice Xavier said. ``The house I grew up in and was later forced out of by Indonesians now has East Timorese people in it. So who owns that?''

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