FRETILIN PARLIAMENTARY GROUP
SPEECH BY LEADER IN THE NATIONAL PARLIAMENT
CLOSING OF DEBATE ON FIRST READING OF 2011 BUDGET LAW
14 January 2011
Mr. President of the National Parliament,
Honorable Members,
All Visitors to this noble parliament,
Maubere People,
To begin, we think it is worthwhile to take in what the Bishop of the Diocese of Baucau Dom Basilio Nascimento said when asked what he thought of the proposed 2011 national budget:
“……as a citizen, I am await it, when so much is spoken of , then there should be some results for Timor, that is all I am asking.”
“Every year we talk about it, the opposition screams, the people scream, the experts scream, but it is like trying to eat buffalo hide because nothing comes of it, so I await to see how this money will be used, if it is for the stealing then go ahead and steal it, if it is to waste it then waste it.”
“I will be happy when I see good roads, electricity available, when there is food for everyone.”
This statement by the Bishop of Baucau to the Timor Post soon after the Council of Minister’s approved the 2011 National Budget, was an expression of his concern, and the concern of many Timorese with this national budget.
As a citizen and a leader of the Timnor-Leste Catholic Church, Bishop Dom Basilio Nascimento has the moral obligation to his congregation, to speak out, to say something, especially for those who for one reason or another are the voiceless, to speak up for what is really happening, tell it the way the people see it and how they feel about the direction of the development of this nation.
As the de facto opposition, very year during the budget debate FRETILIN has continued to raise its same concerns because the large amounts of money that have been proposed in annual budgets has not brought any significant change for the better in the lives of the bulk of our people.
During this period of governance by the AMP, from 2007 to 2010, the de facto government has spent US$1,8 billion on funding programs and trying to fulfill its many promises made:
1. to reduce poverty;
2. to fight corruption;
3. to erect infrastructure such as; electricity throughout the whole of Timor-Leste, roads to every suku and village, running water for everyone;
4. to fix education, health, agriculture, transport and communications;
5. to reform the public administration, public finance management and budget management;
6. to bring in large investors and create jobs for our young people. Many other promises.
But there have been no significant results in these areas because the Government does not have an integrated or consistent plan to govern for the five years of their mandate; it does not have an annual plan with clear objectives to implement the state budget to improve the lives of our people, resulting only in projects without quality. Budgets destined merely to be wasted arbitrarily. This government only knows how to throw money out. They know how to spend money without properly implementing the budget programs. There is no fiscal discipline; they only know to move money around in an ad hoc manner with all sorts of “packages” (with the parliament approving money for one thing today, but tomorrow the government doing something else with that money), which in the end makes it very difficult for the parliament to exercise oversight of the budget implementation.
For four years they have been crowing about the same successes, the have solved the problem of the internally displaced, paid pensions to veterans and ex-combatants which has been full of collusion, corruption and nepotism, and that the have resolved the problem of the petitioners with money, but as we have all recently heard again the petitioners are starting to mobilize themselves again, including mobilizing their claim that they are still members of the F-FDTL.
Annually they bring the budget to the national parliament with macro economic projections that are not solid because they are based on statistics that are not credible or are overtaken.
Annually they boast about 12% economic growth, but fail to explain the quality and substance of this growth. Which sectors contribute to this growth and how much? What regions enjoyed this growth? The AMP government misrepresented the World Bank report that there has been a reduction in poverty, boasting and publicizing incorrect information that poverty had reduced 9% in Timor-Leste.
The reality of the economic situation is this. This economic growth has not created real long-term job prospects for our young people. There have only been a small number of work places created from temporary employment from the private sector as a result of public infrastructure projects. There is no foreign direct investment, but all investment is dependent on public investment, but investment in the productive sectors such as agriculture and education is low.
There is almost no domestic production whatsoever. Our petroleum revenues come out of the Timor Sea and all flies out into the seas in the North of our country. The cost of domestic public works projects are artificially inflated beyond their real cost values and are extremely costly. Because of inflation the price of everyday commodities are expensive and rising constantly, and the government has no idea how to contain imports. In 2007 Big Brother Xanana promised that the price of a small packet of noodles would be five cents, but now it costs 25 cents. The price of a sack of rice has risen to US$20, but the Minister for Tourism, Commerce and Industry says it is normal.
Despite injecting a lot of money into the market through public investment, because there is no absorptive capacity by the domestic economy, most of the public investment moneys fly straight out of the country to other countries (as Ms. Emilia Pires has stated 70% of each dollar spent in public investment all goes out). Meanwhile, our people continue to live in abject poverty, whilst a small group in our society who have access and know how to take advantage of the system or know how to steal, have and are becoming much richer and fatter each day. There are many public investment projects but the money mostly goes upwards and very little ever trickles down to the people. This has increased economic inequality in our country.
The consistent increases in public spending have fuelled inflation with the price of commodities in the market rising, whilst the purchasing power of our people has fallen because their average incomes have remained the same if not fallen.
Although it has been four years, the AMP has failed to meet many of the promises made by Big Brother Xanana. Lots of money has been dissipated, but most of our people continue to complain, because they do not have access to water, the roads are bad an getting worse, and now there is a new promise that on the 28th of November 2011 electricity from the power stations using heavy fuel oil will be available, but the people already know that the AMP are full of just that promises. Tractors and all manner of other equipment have been distributed yet agriculture has gone backwards, with production falling. The quality of the education system is poor, and the health system is deteriorating more and more. Free medication for the sick is not available.
Corruption is flourishing within the government. Members of government, directors general, directors and civil servants are accumulating personal extraordinary wealth beyond their income capacity. Reforms have become a euphemism for wildly and spontaneously changing from one policy and system to another, these always being referred to as innovative measures or initiatives. Ultimately, the result is the same, no progress.
Mr. President,
People of Timor-Leste,
In 2011 the Xanana government has asked for even more money than before for the national budget, a global sum of US$985 million, split into two portions: one, called a consolidated fund or functional budget, for $642.7 million, and two, Special Funds totaling $342.3 million. This global amount still does not include funds from Timor-Leste’s development partners of $195 million. This means that in 2011 the amount of money to be poured out will total US$1,18 billion.
It is clear from the pattern of budget implementation for previous years that the government has been incapable of spending the moneys allocated in the budget especially in the category of capital development, yet the most worrying thing for FRETILIN is precisely this category in the proposed 2011 budget and the proposal for the creation of two special funds.
We are concerned because the moneys to be allocated for development capital and human capital development will be transferred from the line ministries and centralized in special funds, that will be under the power and control of the office of the prime minister and administered through a National Development Agency as the administrative council for the funds. This will be the replacement of the function and responsibility of the respective ministers and secretaries of state in the management of projects and centralize them in the office of the PM. Ministers and secretaries of state will be like directors general who will merely exercise managerial functions. In this way His Excellency Mr. Xanana can be come the supreme commander again as he was during the guerilla period. This will retard the development and maturation of good governance and decentralization of powers and functions in the public administration of our state.
This trend to centralization in this and previous budgets can also be seen in the allocation of other expenditures. There is a large proposed increased in the budget for the Office of the PM and the Presidency of the Council of Ministers, the secretaries of state and ministries who are dependent on the office of the Prime Minister himself. Together with the special funds, the total amount allocated directly under the control of the PM is close to 50% of the total national budget. Just in terms of development capital, 92% of this development budget will be under the control of the PM.
What does this trend say to us? 1. Distrust and the removal of responsibilities from ministers and secretaries of state, as well as from the other AMP parties; 2. It shows a failure or the weakness of the AMP government; 3. It is clearly a policy of establishing a CNRT Investment Fund for the 2012 elections, which is just a year away.
This government exists because of an alliance but with each party having its own separate policy programs, its own interests and objectives. Each minister or secretary of state does as he wishes, and there is no coordination within the government. This is the principal problem with this AMP government. The ineffectiveness and absence of synergy in the activities and projects of the government, stems from the dysfunctional policy base of and the way the alliance itself is managed. If the issue is that the ministries, departments and component services are too bureaucratic, this must refer to the result of the so called administrative reform that the AMP has been boasting about for years, which has in fact been a total failure.
Despite having extreme doubts about the capacity to execute, FRETILIN understands why the de facto government ‘s intent in proposing the creation of these two funds. Above all it is to support the National Strategic Development Plan (NSDP). But we think it is utterly premature to create these funds in the national budget thus compromising future governments, and it should not become a tool for anyone or any group to renew their promise of miracle making, which have previously been made but not delivered on.
If it is to support the NSDP, the special funds must also have their own detailed investment plan, with their specific cost benefit analysis, included projected economic and or social returns, not a case of merely providing a list of projects. It will be the only way of bringing credibility to this national budget and avoid ad hoc and arbitrary transfers, or for another package such as the referendum package to emerge from these funds.
According to the Public Finances Management Law number 13/2009, funds can only be established through legislative authorization by way of a law of the national parliament, not just by the national budget of the state law.
Over and above the legal question, these funds also fly in the face of good practice established by law 13/2009 such as the principles of specifying clearly budget allocations and their objectives encompassing all the state’s appropriations and expenditures.
The general budget of the state is unique and is one legal instrument that encompasses all of the entities and services of the state and all their revenues and expenditures. Most importantly it has to detail specifically all items of revenue and expenditure according to article 145, number 2 of the constitution of the republic.
Otherwise, this government will be in breach of the constitution and will not be a proper budget, but just a wish list or a shopping list. This will be another disaster for public finance management in this country, and this is what is worrying FRETILIN. Because of this the proposed budget for 2011 will not have the support of the FRETILIN parliamentary group.
Mr. President
People of Timor-Leste,
It is because of this danger that some of FRETILIN’s MPs tabled a proposal two days ago that this parliament return the proposed budget law to the government, giving it the opportunity to amend it and return it to the national parliament for its approval. The proposal was tabled with the intention of repairing the budget, through dialogue and discussion before resorting to legal options. However, perhaps because the president of the parliament failed to understand our intention, he refused to accept the tabled proposal or to allow debate of the proposal that was tabled.
We have now registered the opinions expressed and suggestions from AMP MPs and the de facto government that FRETILIN should take all questions of legality and constitutionality to the constitutional court instead of raising them in the parliament. However, we ask that when FRETILIN does take this matter to court and there is a favorable ruling for FRETILIN, we ask the AMP MPs and the government not criticize FRETILIN for having taken it to court, nor the courts for their decision as has previously occurred.
Just as FRETILIN has shown consistently its desire to reject violence and promote peace and stability, FRETILIN will also do all within its powers to advance the development of our nation and people.
Thank you Mr. President.
Aniceto Guterres
Parliamentary Leader of FRETILIN
