STATEMENT OF THE LEADER OF THE FRETILIN PARLIAMENTARY BENCH ON THE CLOSING OF THE FIRST READING OF THE 2012 STATE BUDGET LAW

FRETILIN – PARLIAMENTARY BENCH

STATEMENT OF THE LEADER OF THE FRETILIN PARLIAMENTARY BENCH ON THE CLOSING OF THE FIRST READING OF THE 2012 STATE BUDGET LAW

Dili, 11 November 2011

Mr. President of the National Parliament,

Distinct Deputies,

His Excellency Mr. Xanana Gusmao and delegation,

People of Timor-Leste.

Annually the government led by his Excellency Mr. Xanana Gusmao, have presented budget proposals to this noble chamber that have greatly increased, and this National Parliament has approved the government’s budgets allegedly with the view of moving development forward and to better the lives of our people.  

The rate of execution of these annual budgets have also said to have increased and said to have constantly improved.  From 2007 to October 2011 the Government has only spent US$3 billion from a total of the US$5 billion approved by the National Parliament, all said to be to aimed at financing programs and fulfilling all sorts of promises made to our people by them.

“During the time of struggle we spilt blood, but now we spill money,” this has been the motto of his Excellency Mr. Xanana Gusmao.  But what has been the result from this?

The indicators show that “many things” have been done during His Excellency Xanana Gusmao’s governance, but there have not been any significant results.

Any results have not been in proportion to what should have resulted from the very large amounts of money that have thus far been poured out, nor has it brought any positive impact to our peoples’ daily lives.

Reality shows, Timor-Leste has indeed had peace and stability in these last years, but attaining such peace and stability has also depended largely on the political good will and cooperation that FRETILIN, as the de facto opposition has shown.  

The FRETILIN bench anticipates that the 2012 election will indeed be a democratic feast for our people that the outcome from the final votes cast by our people will be respected, and that whoever becomes the opposition will maintain the culture that has been built over the last four years, so that our people can live in peace.  That the future opposition will guarantee a normal governance cycle, so that political stability can be realized as a condition sine qua non for national development.

Because, reality has already shown, despite being a small opposition, when the opposition does not want to cooperate to undertake its opposition in the right place, but instead the opposition mobilizes demonstrations everyday, it will not contribute to fostering stability.   Similarly, when the President of the Republic as head of state fails to conduct himself in accordance with the constitution but instead becomes leader of the opposition, then there will not be the environment for stable and peaceful governance.

Excellences,

The “Unprecedented Economic Growth” that is said to be the successful result of this governance, has come from budgetary growth and large spending and quick spilling out of public investment especially on infrastructure.  However, private foreign investment does not exist.  Similarly, there is no permanent employment, foreign workers dominate everywhere, and our youth unemployment keeps growing. Investment in the productive sector, such as agriculture is less and less. There is total dependence on imports, with inflation uncontrollable, and the price of goods rising beyond the affordability of our people.  

The agricultural sector has no productivity. Despite mechanization (distributing tractors and all sorts of machinery, but even those who are not farmers also receiving these), as Mr. Gil Alves, Minister for Commerce has said, agricultural production has not even reached 10% of the national food security needs, and we are still heavily dependent on foreign imports of produce such as rice, fruit, poultry, eggs, etc.  It shows that the government has lied to the people with the numerous statistics on agricultural production.

The budget policy has been more oriented towards infrastructure with various megaprojects, annually increasing, all said to be in order to maintain “economic growth.”  In the meantime the investment base in health and education continues to be fall, as we can again see from the 2012 budget proposal.

Lost of money has been poured out but roads continue in a poor condition everywhere.  Lots of money has been spent just on filling potholes.  Because of the problems of impassable roads, some sucos and sub districts, for example Laclubar, Alas and others, that previously had good access, are now isolated.  Potable water continues to be a problem for the population both in urban and rural areas.

Electricity is still going on and off, despite annually large amounts of money being allocated to generators and fuel, but because of mismanagement, the people continue to complain because of shortages and cuts.  A lot of money has been spent on the megaproject Power Station but we do not know the actual total cost of this project, nor the projected budget that will be needed for the operational servicing and maintenance in the future, nor its sustainability.   

In health and education, investment has fallen.  Because of this there has been no significant improvement in these two areas.  Pharmaceuticals are lacking in the hospitals, and the quality of general health care has fallen.  Many schools do not have conditions for our children to learn, because schools are degraded, there are insufficient classrooms, chairs and tables are not available, and not to speak of no libraries or laboratories in schools.  All schools lack in basic sanitary needs (toilets and potable water), and many school children still do not have access to the school-feeding program.

This is how you pour out huge amounts of money, but as the President of the Republic recently told the national media, many of our rural population have to date not benefitted in terms of development, and continue to live in difficult circumstances.

Much of our population continues to be unable to access to basic needs (food, clothing and housing).  There is still hunger and malnutrition, and they are growing. Chronic malnutrition and infant mortality continues to remain unacceptably high.  Inequality continues to grow in our society because the majority of our people remain in poverty, and in fact increasing poverty, whilst a small group of people that have access and knowledge, or know how to steal, have become very rich and are becoming richer and fatter by the day. 

The FRETILIN bench is very concerned with the actual living conditions of our people, and perhaps this is the result of the petroleum curse that other petroleum producing nations have also faced.  Huge amounts of money are allocated to infrastructure to “waste” or pour out on the ground uselessly, and in the end no benefit brought to our people.

Mr. President,

People of Timor-Leste,

An evaluation of the five years of His Excellency Xanana Gusmao’s government has brought us to this 2012 budget, his final budget.  In this proposal, the de facto government has increased the budget by 35% compared with the 2011 budget, a budget increase in uncertain circumstances, given that the system of controls and management of public finances are poor. 

The last five years has shown us what can happen, as has happened, that the budget that has increased in a short time, has not been in keeping with the capacity of the machinery of the state to prepare itself to manage and control it effectively.  This has created the opportunity for bad administration, diversion of large amounts of state funds, wasteful spending, and growing corruption.

The annual budget has grown, but because of a lack of capacity to absorb minimally has resulted in 70 % of the budget fly out of the country, with only 30% staying in the country. But because of bad management and lack of control, 15% has gone straight into the private pockets of some people, according to the statement of His Excellency Mr. Xanana Gusmao himself at the Dili Convention Centre on 1 August.  The remaining 15% from this huge amount of money has gone into projects around the country that have no quality.  So, every year the money increases only to make the corrupt richer.

But the government is not coherent with the allocation of this large amount of money, because attention is not given to state institutions that have the function of controlling and strengthening justice, such as the Inspector General, the Anti Corruption Commission, the Ombudsman for Human Rights and Justice, the Prosecutor General’s Office, and the courts.  Even with these institutions the government has cut their budget, as an attempt to weaken their ability to safeguard our peoples’ money. There is no political will to secure a system of controlling and fighting corruption, not just establishing institutions, but more importantly the political is not reflected in the budget allocation priorities to these institutions to enable them to function effectively.

This budget also has proposed increases claimed to be to meet the peoples’ needs in the MDGs, of building houses in the villages.  This money should really be invested in the villages but instead it has been turned into a megaproject of pre-fabricated housing that will benefit a small group of people who will simply skip away from our country with huge amounts of money.  It is a project that has inadequate planning and design, has weak quality control, and has involved a tender that has not been transparent.  Because of the problem with land ownership, the government has decided that in 2012 it will merely move ahead with pilot projects.  If that is the case then why have they budgeted the whole amount of the proposed project for this coming year?

The increase in the 2012 budget includes authorization for US$33.1 million in proposed external loans.  Some may say this is a small amount of money, but the problem is that we will begin to accumulate debt, and the experience is that once you start to owe you never stop. We will be leaving a heavy burden for future generations.  Limited institutional capacities to manage, resulting in wasteful spending as has already happened with the Petroleum Fund, will mean that in the end it will deliver nothing for our people.

If we look at the current global situation, we need to contain some areas of our public spending, such as the proposed spending of US$4 million on festivities on historic events next year, which do not call for big parties, where our leaders can shower themselves with champagne, as we have all seen recently on TV.

The proposed budget allocation for acquiring motor vehicles for members of national parliament and other state institutions can also be cut. The acquisition of more vehicles will only increase the budgetary burden on the state’s “goods and services” for maintenance and fuel costs, and will in turn become a huge opportunity for corruption in our state institutions as has been reported by the Anti Corruption Commission in its recent investigation where 51% of state fuel coupons have been used to fill private motor vehicles.

This parliament also needs to reform the law regarding former elected officials and the pensions to former members of government and members of parliament to correspond with current circumstances, and that will also be more socially just, as the FRETILIN bench has demanded be done several times to date.

Excellences,

The proposed state budget for 2012 has been brought to the parliament with a huge increase for megaprojects and many new physical projects, but as we all know, in two or three more months, we will all be entering presidential and parliamentary election phase.

The FRETILIN bench is concerned that the government will not have sufficient time to implement the budget.  This is clear evidence that this government has been unrealistic in its budget elaboration and has merely sought to tie up a future government that will shortly be elected in the upcoming elections.  Perhaps it is an election budget to benefit one particular political party?

Just like every year, because there is no integrated planning and there is no technical rigor nor professionalism in the planning and budget forecast process, this government will not be able to execute the planned 2012 budget that this National Parliament will approve.  The government will instead improvise as usual and will transfer the budget allocations here and there, and will incur debts everywhere, a situation that has been publicly acknowledged by Mr. Xanana himself at the Dili Convention Centre last August.

So the 2012 state budget, as well as being unrealistic, just like the previous budgets, it is not credible, and will merely be a budget for festivities, and to pay debts that the government has incurred.

Thank you.

Deputado Aniceto Guterres

Leader of the FRETILIN Parliamentary Bench