Southeast Asia’s newest nation faces an election that could make or break its future

With much of the population living in poverty and oil wealth running dry, Timor-Leste’s upcoming elections could be the public’s most important decision since independence

Originally published by Southeast Asia Globe (January 16, 2017)

“Our people need money,” said then-President Xanana Gusmão the day after Timor-Leste gained independence from Indonesia in 2002. “They need to sell their products. They need to have money to send their children to school and to start improving their daily lives.”

When the East Timorese head to the polls in a few months’ time, in what could be the country’s most important elections to date, money will be the major talking point: how to end corruption; how the country’s petroleum wealth should be invested; and whether there will be enough money for future generations. The answers are far from simple.

Timor-Leste’s politics have typically been a contest between the two major parties, Fretilin and the National Congress for Timorese Reconstruction (CNRT), both of which trace their origins – and disputes – to the country’s 24-year independence struggle against Indonesian occupation. The last elections in 2012 saw a further 19 parties compete, with the Democratic Party garnering 10% of the vote to finish in third.

Last year, Southeast Asia Globe reported on the growing cooperation between Fretilin and the CNRT, a rapprochement that led pundits to speculate that the parties had reached a power-sharing agreement, meaning the country was without an effective opposition to the CNRT majority government. In this void, President Taur Matan Ruak, a former military commander who took office running as an independent, assumed the mantle as the government’s chief antagonist.

A new political party, the People’s Liberation Party (PLP), was also formed last year – by the former corruption commissioner Adérito Soares – and it is all but certain that Ruak will resign his presidency and run on the PLP’s ticket for prime minister. According to Michael Leach, a professor at Swinburne University, Australia, the combined appeal of the “popular” Ruak and Soares means “the PLP is in a very strong position to make a mark in the 2017 elections”. Both presidential and parliamentary elections are set to take place some time between the middle of March and early July.

The PLP is expected to overtake the Democratic Party in the ballot – the latter has been flailing since its leader, Fernando de Araújo, passed away in June 2015 – and seize the more established party’s traditional third place. It has also “already developed a strong critique of the current development focus on large ‘megaprojects’, and has also raised allegations of patrimonialism”, said Leach. Both of these issues are expected to be important to the electorate.

However, while few expect the PLP could win a majority, it has positioned itself as a viable option for protest votes – and a potential thorn in the side of the next government.

Core to the PLP’s and Ruak’s message is that the government has forgotten ‘the people’, focusing instead on issues that have no bearing on ordinary lives. As the president said in parliament in February: “The state of Timor-Leste is far too centralised. It centralises skill, power and privileges. It excessively wastes resources, allowing thousands of Timorese to become second-class citizens.”

By taking a strong populist stance, the PLP is challenging what some perceive to be the consolidation of power among the traditional elite who focus on large, costly development projects and aggrandised state budgets that are leading the country to bankruptcy. By doing so, it hopes to provoke the two main parties into reassessing the direction they are taking Timor-Leste.

Perhaps a good representation of the government’s alleged misdirection is its focus on joining Asean – a cornerstone of the country’s foreign policy since independence. Debates linger over how much this will affect economic development, and ascension to the body seems little more than symbolic for Timor-Leste, as the only Southeast Asian country yet to be admitted. However, according to Charles Scheiner, an analyst at La’o Hamutuk, a local development NGO, joining the body is not particularly “significant for people’s lives in Timor-Leste”.

“It would be better for the leaders to devote their energies to reducing poverty and malnutrition, and investing in education, healthcare, water, sanitation and other things which are more immediate and connected more closely with the citizens,” he added.

While there may have been improvements in quality of life and development advances in Timor-Leste, there is a risk such progress could become overstated. The government quite rightly says it has reduced poverty, but an official report from 2014 stated that 489,000 people, almost half of the 1.1 million population, were living in poverty in that year – only a small decrease from 509,000 in 2007.

In recent months, there has been a slew of optimistic output from the government. A press release, dated 17 November, bears the headline: “Timor-Leste’s economic outlook positive as reforms begin to show results.” In an email to Southeast Asia Globe, Agio Pereira, minister of state and the government’s spokesperson, further extolled the country’s progress and hit back at naysayers.

“The government is focused on creating conditions for sustainable economic growth and economic diversification,” he wrote. “We are building essential economic infrastructure, reforming systems to encourage private sector growth, strengthening the capacity of our human resources and supporting priority sectors for development.”

However, as a recent report from La’o Hamutuk opined, this is little more than pre-election posturing. “Any government entering an election cycle will spin the facts to convince voters that they are doing a good job,” it reads. “We hope that Timor-Leste’s decision-makers don’t believe their own propaganda.”

The main economic issue facing the country relates to its oil and gas reserves. Kitan, the smaller of Timor-Leste’s two producing oil fields, ended production in 2014. And if government spending continues on the same trajectory, the country’s sovereign wealth fund – designed to save oil revenues for future generations – could be empty within 12 years, according to La’o Hamutuk figures.

Damien Kingsbury, professor of international politics at Australia’s Deakin University, says this has placed corruption and economic planning at the forefront of this year’s election, “because the first is getting much worse and is draining the country’s limited resources, and the second because the government does not have a Plan B for when the oil runs out”.

Indeed, if the most pessimistic estimates of state revenues are correct, then it will fall upon the next government to make what could be the most important decisions the country has faced in its short history since independence. Taking the wrong course could spell disaster.

“Timor-Leste has consolidated its democratic processes, and the 2017 elections should further confirm that,” said Kingsbury. “However, even the most entrenched democracies can be subject to change in times of crisis, which the country is likely to face when the money starts to run out.”

Predictions for any election are difficult, but the commentators Southeast Asia Globe spoke to offered up a few opinions. Most agreed that Fretilin and the CNRT will compete separately but, post-election, are likely to return to their power-sharing agreement. In none of the country’s three parliamentary elections has any party other than Fretilin or the CNRT won the most votes, and it is highly unlikely this trend will change. If the PLP manages to gain 20%, said Kingsbury, it would have done a good job.

As for the presidential race, there are unconfirmed rumours that the Nobel Prize-winning former president José Ramos-Horta will return. When Pereira was asked about this, he did not deny it but said: “Timor-Leste is fortunate to have highly qualified, capable and committed people to stand for this role.” At the time of writing, the CNRT was yet to announce its candidate, but another major question – which could go some way toward demonstrating how the two main parties might cooperate post-election – is whether the CNRT will back Fretilin’s candidate, Francisco ‘Lu Olo’ Guterres.

“One key question facing the second- and third-largest parties after the election may be whether to accept ministries, or to instead act as an independent parliamentary opposition,” said Leach. “In general, ‘grand coalition’ arrangements are good at promoting stability and reducing political conflict, but weaker on providing adequate parliamentary oversight and effective opposition.”

When the people of Timor-Leste go to the polls, they will have their say on whether to back political stability and the status quo, or reconsider how the country moves forward. With pressure mounting on authorities as oil funds run dry and their approach to development comes under increasing attack, the most important outcome could be that the country gets a strong, committed opposition to effectively challenge government decisions. 

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