Subject: East Timor to focus on renewable resources -Gusmao

East Timor to focus on renewable resources -Gusmao

MACAU, Oct 27 (Reuters) - Tiny East Timor, due to gain independence next May, will have to focus on renewable resources such as fishing, farming and tourism in order to develop its economy, leader Xanana Gusmao said in Macau on Saturday.

East Timor's infrastructure was battered in 1999 when militias trained by the Indonesian army unleashed a campaign of violence after the territory voted to end more than two decades of Indonesian rule.

Gusmao is a former anti-Indonesian guerrilla leader widely expected to become impoverished East Timor's first president.

He said the economic system of East Timor should be left to the private sector but education, public health and infrastructure should stay with the public sector.

"We will have to concentrate our efforts on developing renewable resources, such as fishing, tourism and agriculture," Gusmao told a briefing at the sixth Macau International Trade and Investment Fair on economic opportunities in his homeland.

Exports of coffee, sandal and teak wood, marble and manganese would also play a prominent role, he added.

Gusmao said a social benefits system would aid democracy.

"There can be no development without democracy, but also no democracy without stability, such as new employment and social benefits for the population," he said.

The Asian Development Bank says East Timor's per capita gross domestic product amounted to US$395 last year.

The territory has been administered by the United Nations since October 1999, following 24 years of occupation by Indonesia and four centuries of colonial rule by Portugal.

Gusmao vowed that the future Democratic State of Timor Lorosae would avoid "big government" and steer clear of the "temptations" posed by the multi-million dollar revenue from oil and gas expected to come in from the Timor Gap in coming years.

He said the departure of foreign residents, who had created what he called a fictitious economy, would trigger a shock.

Gusmao was referring to thousands of foreign aid workers and military personnel in East Timor, many of whom are expected to leave the half-island off northern Australia after it gains independence on May 20 next year.

Gusmao said East Timor's Constituent Assembly was expected to pass a constitution in December. Legislation on investments would possibly only be drafted next year, he said, adding that for the time being there are no rules on capital flows.

Gusmao said East Timor would continue to use Portuguese, as a way of keeping its identity distinct from Indonesia.

Macau and East Timor share a common history as former Portuguese colonies.

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