East Timor needs more than peaceful elections to survive

East Timor needs more than peaceful elections to survive

The successful conclusion of East Timor’s 2017 presidential election has been lauded as another positive milestone for the country’s fledgling democracy. The recent election was the first to occur without assistance from the international community, and the first since the departure of the UN mission in 2012. Since 2008, East Timor has also been named the most democratic nation in Southeast Asia by the Economist. Such credentials would appear to indicate clear sailing, yet there are growing political risks that need to be addressed if long-term stability is to be realized.

The victory of Francisco Guterres in the 2017 presidential elections highlights several interconnected issues facing East Timorese politics going forward. The first of these is East Timor’s increasing tendency towards a one party state with no effective opposition. Since the National Congress for Timorese Construction (CNRT) and Freitilin parties entered into a power-sharing agreement after the 2012 election created a hung parliament, the country’s two largest parties have enjoyed an effective monopoly on political power. By mutually supporting each other’s candidates and implementing a non-compete agreement, the coalition has been able to maintain control, and is likely to remain in power after the upcoming July 2017 parliamentary elections.

Growing generational divide

With 57% of the vote, Guterres was far ahead of his closest competitor, Antonio da Conceicao at 32.5%. Both the CNRT and Freitilin are composed of revolutionary-era leaders from the region’s long struggle against Indonesia. At 70, Guterres’ victory reinforces the status quo and highlights the growing lack of consensus between Generation 75 (older, Portuguese speaking leaders who were already established when Indonesia invaded in 1975), and Generation 99 (leaders who came of age in the 1980s and 1990s during the independence struggle).

With the election of Guterres, East Timor’s government continues to be dominated by aging Generation 75 leaders, many of whom entered democratic politics after directly transitioning from being armed rebel leaders. Since independence in 1999, resistance-era leaders have used their rebel credentials to attain political office for themselves and their allies. While this trend is understandable, with the country coming up on 20 years of independence, there is growing pressure for a generational shift in leadership, especially among the burgeoning youth demographic.

Generational clash: Francisco Guterres (left) and Antonio da Conceicao (right)

The 2017 presidential election pitted Generation 75 Gutteres against Generation 99 Conceicao, 53. One of the drafters of the East Timorese constitution who supported Conceicao is Aderito Soares, who explains the results of the 2017 election: “Antonio did very well and it shows that there is a bit of a change in the minds of voters as well. I think Antonio is a new generation from [previous] small political parties […] I think in the previous election their Democratic Party only got 10 percent, something like that, so I think is a big jump [sic].”

Generation 99 leaders are itching to make their mark on East Timor, and have criticized the direction the country has taken under the leadership of the older cohort. These disagreements were played out during the election campaign, with the opposition emphasizing the need for more sustainable growth and economic diversification. This in contrast to the emphasis on oil over the past two decades, and the government’s focus on energy and infrastructure mega-projects.

East Timor’s development strategy undermines accountability

Many Timorese are concerned about the country’s dependency on oil, with accounted for 60% of GDP in 2014, and 78% of the state budget in 2017. Consequently, “the next five years with new leadership is a critical time because the currently used oil fields are mostly depleted,” notes Charles Scheiner, of La’o Hamutuk, a Dili-based think tank. As things stand, the country is on the road to bankruptcy as the government increasingly dips into the national petroleum sovereign wealth fund to cover fiscal shortfalls. At current rates the fund will be depleted within a decade.

The government has in turn set its sights on resolving an outstanding maritime border dispute with Australia, with some positive developments coming over the past 18 months. If this issue can be quickly resolved, East Timor will gain access to the $40 billion Greater Sunrise oil field. The problem is that the cost of developing said field – $2 billion – dwarfs the $1.39 billion 2017 state budget. Critics point that this money could be better spent elsewhere, with the development of the Greater Sunrise field only further entrenching the country’s resource curse.

Alongside the Democratic Party, the newly formed People’s Liberation Party (PLP) is advocating for more sustainable development, and is calling for a departure from the personality driven politics of CNRT and Freitilin. This call finds fertile ground in the country’s growing youth population who have come of age post-1999: two-thirds of the population is under 30. East Timor’s youth have no connection to the revolutionary era, and instead see aging former rebels dictating their future, while unemployment stands at 60%, illiteracy at 30%, 70% of the population lacks health care access, and 40% of the nation lives below the poverty line. Moreover, the government’s focus on mega projects such as the industrial processing and special economic zone in the Oecusse exclave clash with everyday concerns and needs. Indeed, some 70,000 people, the majority of Oecusse’s population, face relocation as the mega-project sprawls across the region.

The focus on oil and gas, as well as mega projects in general does little to improve accountability and transparency in East Timor, which currently ranks 101st in the 2016 Corruption Perception Index. While East Timor made an impressive jump from 132nd to 101st between 2015-2016, the country’s score is still dismal, and in line with results from a corruption perception survey which saw 77% of respondents describe corruption in East Timor as ‘serious’. While the country legislatively enshrined its Anti-Corruption Commission, the nature of political-economy in East Timor does not remain conducive to good governance. As in other petrostates, a focus on oil and gas concentrates economic power and decision-making, preventing robust oversight and encouraging abuse and rent-seeking.

Revolutionary leadership ill-suited to civilian governance

Similarly, a focus on mega projects over more diversified development further centralizes economic power and provides fertile ground for clientelism and collusion between developers and government, especially in the absence of strong oversight. This is further accentuated by the fact that many top posts are filled by individuals with revolutionary, instead of practical credentials. These leaders, accustomed to leading by force of personality, often forgo formal conventions and regulations, instead preferring to rely on personal discretion in decision making and planning.

Many of these leaders have not successfully transitioned from clandestine to institutional leadership, and as such are ill-suited for bureaucratic postings. This trend is exemplified in the office of the president, which while constitutionally a largely ceremonial role, has seen past occupants regularly overextend beyond their mandate, as they work within a network of fellow revolutionary comrades. This leads to informal and semi-formal mutual understandings and other agreements that blur the boundaries of government posts.

Add to this the expectation of providing for familial connections and nepotism becomes endemic. Another issue is the East Timorese custom of gift-giving, which can morph into corruption when it intersects with government administration. Moreover, corruption is highly apparent in the public financial management sector, something that does not bode well for a country navigating declining revenue streams. These short-comings have been seen in an increase in high-profile corruption trials in recent years, involving a former justice minister, minister of education, finance minister, and vice health minister, to cite a few.

Many of the problems East Timor faces are not unique to the tiny nation, as few leaders have successfully made the leap from guerilla to governor. That being said, the problem is especially pressing in East Timor as the country faces a narrow window in which to transition to more sustainable development practices before it marches off the fiscal cliff.

Categories: Asia Pacific, Politics

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Jeremy Luedi

Jeremy is a widely referenced political risk expert and weekly columnist for Global Risk Insights (GRI). Jeremy’s writing has been featured in Business Insider, Huffington Post, Nasdaq.com, The Japan Times, MSN Money, and Yahoo Finance. His work also has been quoted and recommended by Time Magazine, Politico, Transparency International, and Greenpeace, among others.