Subject: SMH: Gusmao Wary of World Bank's Policy Push

Sydney Morning Herald 10/11/99

Gusmao wary of bank's policy push

By PAUL DALEY, Herald Correspondent in Dili

East Timor can expect to be self-sufficient in the medium term and has good prospects for economic growth, a World Bank official has predicted.

But Ms Sarah Cliffe, a bank official who has just completed an appraisal of the East Timorese economy, warned the administration of the newly independent nation should be much leaner than under the previous Indonesian system.

''It's likely the World Bank recommendations will focus on a much more streamlined public service with a smaller recurrent budget,'' Ms Cliffe said.

Ideally, the country's new administration would be more decentralised with greater emphasis on service delivery, she said. The World Bank team identified agriculture - particularly coffee - as central to the country's economy.

Mr Mario Carrascalao a former East Timor Governor, and Ms Cliffe dismissed suggestions the World Bank was ''pursuing its own economic agenda'' in East Timor.

Mr Jose ''Xanana'' Gusmao, widely expected to become the first president of East Timor, said yesterday he feared the bank and the United Nations were pushing their own policies and not listening to the people.

He criticised UN efforts to disarm pro-independence Falintil guerrillas.

''The UN has to recognise that the UN is not the saviour,'' he said last night in East Timor's second city, Baucau. ''We want to make clear Falintil is the liberation army and that they have to respect our history and our struggle.''

Mr Gusmao accused the World Bank of at times trying to impose its own views on how the ravaged territory should be rebuilt. But he said the East Timorese could not ''expect to get everything we want, and I can accept that''.

Mr Carrascalao and Ms Cliffe said the World Bank mission to East Timor had been assisted by representatives of the East Timorese, including members of the National Council for East Timorese Resistance (CNRT).

''I think the situation in Timor is tragic in many ways ... the people had to go through this period of destruction after already having suffered a great deal in the previous decade,'' Ms Cliffe said.

''But on the economic side, we don't see the situation as being so severe ... East Timor will be an economically self-sufficient country in the medium term. It has strong potential economically - we certainly can't expect it to be Singapore or Hong Kong overnight. But there is potential for economic growth.''

Mr Carrascalao said there would be significant debate over who had legitimate right to claim ownership of large tracts of commercial and agricultural land in East Timor. A number of people and companies close to the Indonesian Government had gained property illegally after Indonesia annexed East Timor in 1975, he said.

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