Subject: Return to Rai Ketak: Not so fast (budget ruling)

<> Return to Rai Ketak

<> Not so fast

November 15, 2008

his week’s ruling of the Court of Appeals, rendering the AMP government’s budget unconstitutional, has to be the biggest single decision made by the judiciary since independence.

Three justices, including decision-writing justice Ivo Rosa, ruled that any transfer of more than $391 million (a figure called the Estimated Sustainable Income or ESI) from the Petroleum Fund is not permissible given the context and the letter of the law.

A number of issues are at stake here, but the biggest issue ( <> as even the World Bank sees it) is how East Timor’s national survival will be brokered, with all of the implied difficult present/future trade-offs.

<> I mentioned the questions around the Budget in late August , shortly after three parties (FRETILIN, PUN and KOTA) came together to file a petition with the courts challenging the constitutionality of the Midterm Budget. <> For background please consult Lao Hamutuk’s site .

The plaintiffs threw a number of arguments at the Court, which the Court rationalized into four main lines of argument, and only some of them “stuck.” (Excuse my lack of legal knowledge, this is a lay-person’s analysis of <> 54 page judgment .)

(1) The decision of the Court of Appeals states that it is not the competence of the Court to decide on whether the internal proceedings of Parliament were legal or not. (2) The Court ruled with the plaintiffs on their second argument, which is that the Economic Stabilization Fund represented in essence a “blank check” to government, which is not allowed in the Constitution. The Court found that in approving the Budget, parliament is not a merely authorizing, but instead, is participating in a political decision which “sets out certain lines of policy” and guarantees certain rights. The Court decided that the Timorese constitution foresees a “discrimination of expenses” and seeks to prevent “secret funds.” It found that the Economic Stabilization Fund ($240 million) was indeed in violation of the spirit of Article 145 (N. 2) of the Constitution. (3) The Court rejected the argument that the Budget disturbed the balance of powers by allocating the Economic Stabilization Fund to the Executive Branch. (4) On the last argument of the plaintiffs, the Court found illegal a withdrawal in excess of that set out by the Petroleum Fund Law. The Court ruled that the Petroleum Fund Law has the status of a “reinforced law” ­ that it in effect outranks the Midterm Budget Law in question.

The AMP coalition has reacted by questioning the legitimacy of a decision made by foreigners (all have Portuguese citizenship, one is also Timorese). This is particularly ironic because Xanana has been one of the greatest advocates of the Portuguese language in Timor, and the orthodoxy of language usage has left the Timorese judiciary dependent on Portuguese judges. AMP has also claimed that all of their spending is legal, until the day that the decision is published in the Diário da República (expected to be November 17).

<> Xanana and Emília Pires were featured on an Al Jazeera programme defending their budget, Xanana saying that the AMP “had to buy the peace” ­ the money was for IDPs and to fill people’s bellies in hard times. It’s true that at a certain point in the year, rice prices presented a major challenge to the government.

In some sense, the issue was not so much with the idea of spending more to “buy the peace” but it was the way in which the AMP went about it ­ no transparency, no debate, no deliberation. That in the end, is what the law requires.

Much is made of the unpredictability of Timorese politics and statecraft. But what about the unpredictable and positive developments in Timorese democracy? Outside people are quick to speak of “crisis” ­ <> like BBC, which already concludes “if this row escalates, East Timor could face another political crisis.”

Let’s not jump to the conclusion that this decision renders Timor ungovernable, or that the judiciary has overstepped its bounds. Only a truly participatory democracy will allow for confrontation and contestation. I would be more worried if Timorese democracy were consolidated in a silent and consensual manner, hidden from public view, like a Cambodia or a Mozambique.

In how many post-conflict countries do you have such a vigorous, public negotiation over the people’s resources? I hope this is a precedent, and that this is just the beginning of more real debate about Timor’s future.

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