Subject: LUSA: First Independence Budget Features Higher Taxes, Spending Cuts

23 Apr 02 12:49 East Timor: First Independence Budget Features Higher Taxes, Spending Cuts

Dili´s interim government has approved a USD 75 million budget, euros 84.5 million, for East Timor´s first year an an independent state.

The budget, approved Monday, centers on increased taxes, tightened public spending, subsidies to local administrations and the creation of a special fund to lessen the impact of the end of the United Nations transition administration, according to a cabinet statement released Tuesday.

The territory gains its independence May 20.

The biggest slice of the budget pie goes to education, health and public works, and includes a request for a USD 10 million supplement which will be presented to international donors during a May 14-15 meeting in Dili.

The cabinet also decided to create a so-called Petroleum Resources Investment Fund, with the aid of the International Monetary Fund, to define strategies for saving and applying future revenues from oil- and natural gas-operations in the Timor Gap.

Estimates indicate Dili will garner more than USD 300 million yearly, beginning about 2004, from the offshore fields.

The 800,000-population territory´s villages, towns and infrastructures suffered immense destruction in violence unleashed by vengeful Indonesian forces at the time of the 1999 independence plebiscite.

SAS/ASP -Lusa-

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