Subject: LUSA: Dili Insists Aid, Rather than Credits, Finance Budget Deficit

19 Feb 02 11:55 East Timor: Dili Insists Aid, Rather than Credits, Finance Budget Deficit

East Timor´s transition government, with little more than three months left before independence, insists that international donors cover its budget deficit over the next three years, estimated at USD 170 million, or euros 195.5 million.

"We do not want in any way to take out credits because one thinks that in three years there will be (oil and gas) revenues from the Timor Sea to pay back the credits", Chief Minister Mari Alkatiri told Lusa in Dili Monday.

Saying future revenues from offshore oil and natural gas fields, expected to begin in 2005, should be considered as "credits of future generations for the current generation", Alkatiri stressed that the "donor community" should cover the projected deficit.

"There is money, it´s just poorly distributed", Alkatiri said. "We´re not asking for billions and it´s not because of 80 million that problems should be raised".

Donor sources, consulted by Lusa in Dili, said the international community appeared unlikely to provide more than USD 90 million of the estimated USD 170 million deficit over three years.

While recognizing there were pressing aid demands elsewhere in the world, Alkatiri insisted that East Timor not be made "a victim of our success" in the transition to independence, set for May 20.

He said reducing the budget was not an answer for the deficit because cuts would represent "the collapse of this country".

A decision on financing the deficit must be taken soon, observers said, as the new fiscal year begins in July.

SAS/ASP -Lusa-

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