Subject: Ramos Horta and Helen Hill on Radio National

Transcript of an interview with Ramos Horta and Helen Hill (Victoria University) on Radio National (Geraldine Doogue) last Saturday morning.

Transcript can be found at 

[NB: this interview is at the beginning] Anticipated File size:18MB

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Itís been four years since Timor-Leste, formerly known as East Timor, gained full independence from Indonesia. And according to a recent World Bank assessment in Dili, this tiny nation of 1 million inhabitants is one of the only post-conflict countries that has been able to maintain peace and stability during that period.

But so far this stability has not translated into an economic one. But how do you build a nation's economy from scratch?


Geraldine Doogue: Now thereís a really forbidding list around at the moment from a new United Nations report, cataloguing all the things that are not thriving in post-independent East Timor, which is just celebrating its fourth birthday. They range from poor life expectancy to high illiteracy rates to high infant mortality rates, and so on.

But thereís another list as well, of less tangible measurements, thatís available, which is related to the relatively peaceful climate thatís quite rare in countries that have been torn by war, and occupation, as Timor has experienced for 30 years. And that bad dispute with us, Australia, over how royalties from big developed and potential oil and gas fields would be used, that has now been settled. Revenue is set to grow to maybe $280-million this coming year, up from $80-million.

So where does the verdict come down on the fate of East Timor? You be the judge.

On this Easter weekend, we thought weíd invite two people to join us to have a bit of a good conversation on how best to encourage this new nation-state to thrive, not just to survive. And Iíd like to welcome now the Foreign Minister, Dr Jose Ramos Horta, well known to Australians, and also from Melbourne, Dr Helen Hill, from the School of Social Sciences at Victoria University, and also the author of an upcoming book on Timor-Leste. Welcome to you both.

Helen Hill: Thank you, Geraldine.

Jose Ramos Horta: Thank you, Geraldine.

Geraldine Doogue: Minister, youíve just had the Development Partners Conference in Dili, or the ĎDonorsí conference to shorten it, looking at the steps taken so far to develop the county. What would you say were the key outcomes from those talks?

Jose Ramos Horta: Well I would say that we are all very proud of the fact that the Donors unanimously, and that includes the World Bank and the IMF, the International Monetary Fund, praise our government performance in the last four years, since the transfer of sovereignty. And contrary to obviously what the media usually pick, they pick on the difficulties or the failings, the reality is that if we can make an assessment, an evaluation of four years, much has been achieved. Maybe not enough to compensate for the growing population, because we have a population growth of almost 4%, the highest in the world, but at the same time the number of children enrolled in schools, the number of students going to universities here in Timor-Leste and abroad, the number of water supply delivery to people, electricity, or communications like telephones, today we have a mobile connection and land connection from that chain almost every district and sub-district, the first time ever in the history of this country.

Of course we do have still daunting challenges to reduce or eliminate poverty altogether, and we are conscious of that, and because of that, the government for this fiscal year, 2006-2007, our budget is now $230-million plus roughly $100-million of Donors support, we have at our disposal $330-million to invest across the board including in infrastructure development, like roads and bridges that will create thousands of jobs this year and next year.

Geraldine Doogue: Tell me, you spent so many years going around the world trying to secure East Timorís independence. Now that you are in government, what has been for you the most surprising thing about that transition that you werenít expecting? Whatís been hardest?

Jose Ramos Horta: Well definitely the most difficult challengeÖand that is the lack of qualified, trained, experienced people in the government who can make decisions and implement the decision when theyíre made, to execute the programs, the budget, that is available to them. We cannot complain, we do not have a lack of money. But until we have experience, qualified, hardworking people in the administration who can expeditiously, efficiently execute the budget, no matter how much money we allocate for development, for infrastructure development, we will continue to face problems. Problems in that money that has been allocated to a particular sector has not been spent, or wisely spent.

Geraldine Doogue: And is there a fast track way you can improve personnel?

Jose Ramos Horta: Yes, we have had a number of capacity building programs carried out with the help of the UN or bilaterally by countries, we are hiring international advisers to assist through the World Bank or through the United Nations system but also we are conscious that because now weíre going to invest substantial amounts of money in infrastructure development such as roads and bridges, in smaller schools; every year we will build about 100 new schools. Well we will need to open the tender process to international contractors. And they, the international contractors should be able to bring in foreign workers so that theyíre able to execute their projects in a timely and professional fashion. As long as, obviously, they would hire a percentage of Timorese workers, 50% Timorese workers, and to the extent possible, involve a local partner. But involving of local partners is not compulsory, we can have an entirely foreign company operating as long as they train our people and use local workers.

So we hope that through this process we can have a more efficient and a timely completion of tasks or projects. Geraldine Doogue: Dr Jose Ramos Horta:, the Minister for Foreign Affairs and Co-operation in Timor Leste, speaking to us, and maybe I could draw in Dr Helen Hill: here. Dr Hill is senior lecturer at Victoria University and passionately interested in East Timor. What sort of report card would you give this newly-emerging country, Dr Hill?

Helen Hill: Well I think in many ways itís been quite exemplary, particularly in wanting to keep its hands on the steering wheel you could say, of its own economic direction, which many small countries I think, get overwhelmed by and almost give up on, and I think the general outline of policymaking and the way that the Timorese government has been able to negotiate with its Donors, including Australia over the Timor Sea oil and gas, and with the World Bank over whether or not to take loans, has been quite exemplary, because they do have a philosophy and an understanding of how they would like to see the country develop.

But I think on the other hand, thereís been a bit of a tendency to be dragged into the discourse which sees the money as the main thing, and as the Minister rightly said, our problem now is not the money, itís actually human resource development. And I think that it was a pity that particularly during the years when the UN was there, that there wasnít more done on actually reorienting the education system away from being a small remote province of Indonesia, to where people could, when they graduate, go and get jobs in Indonesia, to a small country which now the people have to be multiskilled. The education system, particularly the higher education system, is training people at too high a level of specialisation whereas what is really needed is a lot of people at the middle level with some academic skills, some organising skills, ability to implement and also to be very multiskilled, particularly in agriculture and food processing, food preservation and thinking about creation of markets.

Geraldine Doogue: Itís a form of really clever, utterly clever bureaucracy, isnít it, that then empowers others. I mean youíre talking about very, very good leadership. Can you think of anyone who could offer that? Have you seen providers who can offer that sort of assistance? Should we be doing more on that front? Helen Hill: I have seen in New Caledonia a rural education system called the Maison Familiale Rurale, which teaches people straight out of junior high school, on their own farms, how to grow crops, but teaches them science as well. It amalgamates the academic and the practical knowledge, and one of the things I notice in Timor which is a bit sad in a way, is that the education system in a sense is dragging people out of the productive economy, because once people reach a certain level of high school in Timor, they more or less say to ≠ their family says to them ĎYou donít need to come and do any more work on the farm. Youíre going to be an urban worker.í And skills that they may even have had when they were young, they lose. And this happens in many other countries too, of course, Timorís not the only country. Geraldine Doogue: This is a rural-city divide really. Helen Hill: It is, and itís the way that because education came in as a colonial thing which was to create an elite most people it was assumed would fail and drop out, and then the elite would be there at the top. Now itís my observation that a lot of agriculture in Timor at the moment is actually done by people whoíve failed in the formal schooling system. And therefore canít read and write. And therefore are not a good basis for the improving the productivity of agriculture without a very different sort of training.

Geraldine Doogue: So do you agree with that Dr Ramos Horta?

Jose Ramos Horta: Yes, generally, yes. For instance our national university has something like 8,000 students, and quite a lot of them are in the area of Humanities, and quite a lot of them are in a particular degree that was invented by the Indonesian side, and is almost useless, and they call it Social Politics. Well I donít know exactly what one does with that course. In my own ministry I have already said, no-one with that degree will be allowed into the Foreign Ministry.

Geraldine Doogue: Youíve decided that, have you?

Jose Ramos Horta: Yes, Iíve decided that as warning to students, Donít pick this course. But of course we have now technical college emerging as private ones. There had been some older technical colleges, institutions that have been started in this country going back to the Ď60s that have trained people in agriculture, in electricity and so on. The government is now determined to support vocational schools. Even though right now, we have a significant unemployment level, we believe that in the next few years, as we develop the country with hundreds of millions of dollars of investments, we are now going to start talks with the Kuwait fund, as well as with China for very soft loans to Timor, which coupled with our own revenues, we will be able in the next ten years to transform the country.

Geraldine Doogue: Let me ask you if you wouldnít mind me asking this ≠ can a viable economy that is not in effect a rent-seeking economy, or relying on welfare from others, can a viable economy be created in Timor Leste?

Jose Ramos Horta: Absolutely. Obviously, precisely because the government has made as one of its key goals, is to reduce, eliminate poverty in ten years from now, according to the United Nations established human development goals. And to do that, we have to invest seriously in, for instances, infrastructure like roads, if we want to develop our agriculture, we have to improve the roads and bridges, so that farmers can bring their goods to the cities, to the markets and so on, so that students can have an easier access to the schools. So there is no way around one thing, and that is we need the roads, we need better telecommunications, and that can be achieved only through massive investment.

Geraldine Doogue: Well of course the Chinese are putting an enormous amount of precisely this type of money into the Laotian and the Myanmar and the Thai economies, to build these huge highways linking north and south Asia, and East and West Asia, so I mean, thereís the prototype for you.

Jose Ramos Horta: Well I wouldnít know whether that is a prototype for us. Our plan, which has been helped by different expat groups including from India, on how to improve our road network, that is based on our own understanding of the needs of the country. But at the same time, these will create thousands of jobs, and that means money that weíve injected into the pockets of families, in the economy and so we believe, I believe, that in five, ten years from now, you will see unemployment significantly reduced, you will see poverty significantly reduced. All of this obviously with a big question mark in the context of having to be able to produce people with experience, with the proper degrees, but also in conditions of peace and stability in the country.

Geraldine Doogue: Iíve just to ask you: what if Indonesians want to come in and take up some of these jobs? Are they going to be the sort of people whom you will welcome?

Jose Ramos Horta: We do not have a policy of discriminating against any particular country. The law states very clearly that companies investing here, companies that will win the bid for building roads and other infrastructures, will be able to bring up to 50% of labour in case we do not have it here. And if they are to be Indonesians, they are most welcome. We have the best possible relationship with Indonesia, but also we are happy to welcome from any other country, if they are needed as I said earlier, to execute the projects in an efficient, professional, timely fashion. The governmentís considering hiring companies that will supervise and monitor projects. We will not tolerate companies that have won a particular bid to build a road and then they fake and theyíre dishonest, and introduce a very poor quality result. We are having a very, this problem here, with a particular foreign company, of course the project was paid for by their own country, one major country in Asia to build some roads, and my Prime Minister simply refused to inaugurate that road because it was poor quality.

Geraldine Doogue: Letís just go to a couple of specific areas, Helen Hill:, that I know that youíve looked at. Coffee, a very important crop for the Timorese, and a great deal of work needs to be done to revive it. I think itís the third most significant legally traded commodity around the world after oil. Now might it be best developed in Timor, do you say?

Helen Hill: Yes, I think itís interesting to note that the Timorese learnt a lot about the international oil marketing in doing their negotiations with the Australians, and that probably an equivalent amount of work needs to be done to get on top of how exactly it is that the Timorese can make the most out of their coffee crop, because several things had happened over the period of the occupation, and during most of the occupation, the Indonesian Generals were actually making a lot of money out of that coffee, and it was the NCBA, the National Co-operative Business Association, coming in from the United States and providing a bit of competition, which actually led to the Timorese getting a better price for a period of time for that coffee. But unfortunately, I think what appears now to be happening is that there is not really a free market in who the Timorese can sell their coffee to, because the overwhelming majority of it goes to this one buyer, and the other thing, if you compare it with other small countries that produce coffee, and the one I went to last year and was very surprised to see, was Norfolk Island, where they actually roast and produce all their coffee on the island, and only allow it out of the country as finely processed packets of coffee.

Geraldine Doogue: So they do the secondary processing as well.

Helen Hill: They do the whole thing, and the processing of coffee is a relatively simple technology. Itís the marketing thatís the difficult thing, and because of commodity chains, now what is happening is the primary producer who grows the actual crop gets a much smaller percentage of what people pay. I mean in Brunswick Street, Fitzroy, we pay say nearly $30 for a kilo of Timorese coffee. Now the Timorese grower gets about one of those, and all the rest of it goes to other producers and suppliers along the commodity chain.

Geraldine Doogue: You havenít mentioned the word ĎStarbucksí, Helen Hill:, I was waiting for you. Itís a bit of a bum word, isnít it. Because isnít in fact Starbucks - in effect the Americans control the National Co-operative Business Association of the USA, which is heavily - and Starbucks buys two-thirds of that coffee, doesnít it?

Helen Hill: Starbucks is able to get a huge amount of the Timorese coffee, partly through the activity of the NCBA which also runs clinics. So the Timorese who produce the coffee are enticed to sell their coffee to NCBA in order to be able to use the clinics. It creates a whole sort of environment.

Geraldine Doogue: What sort of clinics?

Helen Hill: Medical clinics. But of course theyíre now less needed, because the Timorese Ministry of Health has built a lot of clinics, and is beginning to provide a good service.

Geraldine Doogue: Now I think Ramos Horta, you supported, didnít you, this ≠ why? What sort of benefits would you say that co-operation has delivered the Timorese?

Jose Ramos Horta: Well going back to the past, during the Indonesian time, it was important to have some independent entity that would break the monopoly on the coffee by the Indonesian military. And I have to say over the years, this was tremendously helpful to the Timorese farmers. Now of course, our Ministry of Agriculture, our government is looking at ways. First we have to renovate the coffee plantations. Our coffee plantations are old. In the course of 24 years of Indonesian occupation there was no new planting. The coffee was left, up and gone. And now we have to look at, and the government is already working with support from Brazil and scientists from Australia and the US looking at ways to renovate not only the coffee trees, but also the trees that provide shade to our coffee. Our coffee is unique in the world, in that it does not have fertilizers. All the generations it produced a very special flavour, a very special taste, because of the soil and because of the shade provided by these gigantic trees. But these trees, in themselves, lately have been targeted by a particular fungus. So now we are struggling how to attack this fungus that can destroy the trees that provide the shade.

Geraldine Doogue: Youíre such a good salesman Jose Ramos Horta:, truly you are, I can almost taste this coffee. But look, can I just move on to one more example, because Iím afraid weíre running out of time. What about banks? This is another very basic, filthy lucre and all that. Your banking system was essentially destroyed wasnít it, after independence, and a lot of people lost their savings. Now thereís a real sense that you need a rural development bank, you need the capacity to allow people to transfer money, even from Dili to the provinces.

Now Helen, before I come to you for a final remark, Helen Hill:, how important is this rather basic need?

Helen Hill: Look I think this is really basic. One of the things that Iím always amused by: economistsí way of talking about creating wealth is that almost none of them seem to mention the need for the two important things to create markets, are communications, ability to get money around the place, and a transport system to get the goods about the place. And all three of these were sadly destroyed by the Indonesians and in a sense ignored in the UNTAET period. There is no cheap, easy place for, as there was under the Indonesians actually, a Post Office savings bank. And there is in most Pacific Island countries, people can go to the local Post Office and send money to their relatives around the countryside. There is a phone system and there are discussions about prices so that the creation of markets requires an awareness that you need a Parcel Post system based on a Post Office, that goes to all the districts. You need money to be able to be transferred, such as through the Post Office bank, and then you need a good phone and radio system. You need wider knowledge of people so that they can get a feeling for the nature of the market in various products.

Geraldine Doogue: Iíll give you the final word Dr Jose Ramos Horta:, by way of summary. What do you think is the top priority in all that weíve talked about, so that we can see a difference in ten years time?

Jose Ramos Horta: Well if I were to talk on the basis of what our government program is for the next five, ten years. It is a very, very ambitious one, and I believe it is do-able. And that is massive investment in infrastructure development, in education, in health, benefiting from the oil and gas revenues from Bayu-Undan as well as from development assistance, as well as from some new possibilities of assistance from the United States. Because of a very good performance on our side, the US so-called millennium challenge account, this is a very innovative far-reaching program that was established by the Bush Administration to assist countries in transition, countries who had good governance, respect for human rights and democracy, to get out of poverty. So Timor Leste is now fully eligible to this account, which we can obtain up to $300-million in the next two years from the United States to develop the country. So in all of this, I believe that in the next five, ten years, in conditions of peace and stability, we will see this country radically transformed from today one of the poorest in the world, to I believe one that will be modestly prosperous, where you will see much, much less poverty, much, much less malnutrition, much less illiteracy and much less malaria, dengue and so on. And Iím very optimistic, and Iím not saying this as a government official doing propaganda, but Iím very independent-minded as you know, and Iím optimistic from what I see my government doing and from what I observe in the country so far.

Geraldine Doogue: Well look, we all wish you luck. thank you very much indeed. I think there are all sorts of facts there that none of us in this country knew readily, so Dr Jose Ramos Horta, thank you for joining us from Timor.

Jose Ramos Horta: Thank you, Geraldine, itís very kind of you.

Geraldine Doogue: And Dr Helen Hill from the School of Social Sciences at Victoria University, thank you very much for joining us too.

Helen Hill: Thank you, Geraldine.

Guests on this program:

Dr Jose Ramos-Horta Minister for Foreign Affairs and Co-operation Timor-Leste

Dr Helen Hill Senior lecturer School of Sociology Victoria University

Story Producer: Dai Le

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