Timor-Leste: The Challenges of Democracy and Development

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Timor-Leste: The Challenges of Democracy and Development

Timor-Leste needs to exemplify in practice the values preached by its leaders to international audiences.

Timor-Leste: The Challenges of Democracy and Development

East Timorese independence hero Xanana Gusmao, center, waves a national flag upon arrival in Dili, Timor-Leste, Sunday, March 11, 2018.

Credit: AP Photo/Valentino Darriel

Timor-Leste has held a series of successful and competitive elections in the last year; one for president, and two separate parliamentary elections. The country also has gone through peaceful transfers of power despite experiencing political impasse since July 2017.

This chain of events has promoted international perceptions that democracy is maturing in the country. The Grupo Iberoamericano de Observadores Electorales (GIOE), in a statement typical of the views expressed by several international election observer missions, noted that:

The Early Parliamentary Elections that took place last May 12 were conducted within democratic principles and with the genuine participation of the voters that exercised freely their rights to vote; contributing to the peace and stability of the country.

The Economist Intelligence Unit’s Democracy Index 2017 ranked Timor-Leste as the most democratic country in the Southeast Asia region, based on 65 indicators including, among others, political participation, electoral process and pluralism, political culture and civil liberties, and the functioning of government. Timor-Leste scored notably highly in the indicator of electoral process and pluralism. This reflects the fair and free elections, universal suffrage, and freedom of voters that are guaranteed by the constitution.

Timor-Leste also saw its status upgraded from “partly free” in 2017 to “free” in Freedom House’s Freedom in the World 2018 index, a rating reflecting political rights and civil liberties. Despite being a fledgling democratic country, the principles of democracy that are proudly treasured in its constitution are upheld and respected.

Few would deny that Timor-Leste’s experience of nation-building, despite setbacks in 2006-2007, has become an exemplar of determination and commitment: a country that has ascended from the barren dust of conflict and fragility to follow a transitional path of development. Drawing from this experience, Timor-Leste pioneered “g7+,” a voluntary organization of post-conflict and fragile countries that seeks to promote country-owned and country-led development.

Xanana Gusmão, regarded by some as a national hero, is an architect of g7+, and has consistently expressed support for peace, dialogue, and reconciliation as a means of conflict resolution both at home and internationally.

However, as in some other post-conflict countries, the actions of and disputes among the major national leaders still overwhelm political undertakings. Such rivalries have notoriously played out in public. Gusmão, as president from 2002 to 2007, locked horns with Prime Minister Mari Alkatiri, culminating in the 2006 internal crisis, which brought the country into civil conflict and caused great misery to many ordinary people. Gusmão also found himself in conflict with President Jose Ramos Horta in 2012, with Ramos Horta’s successor Taur Matan Ruak during the latter’s five-year presidency, and with Alkatiri again in 2017-18.

In parallel with and reflecting this pattern, there has been a concentration of wealth and power among a small elite that has raised widespread worries about cronyism and corruption. Furthermore, the dominance of major national personalities as sources of political influence undermines the independence of other state institutions such as the judiciary. There was an especially blatant example of this in 2014, when Gusmão’s government revoked the visas of five international judges, two foreign prosecutors, and a foreign citizen working at the Anti-Corruption Commission, giving them 48 hours to leave the country.

As leader of the alliance that has just won the 2018 parliamentary election, and as an architect of g7+, there is now a heavy responsibility on Gusmão to avoid honing the politics of exceptionalism and exhibiting double standards. While he has passionately preached about conflict resolution through dialogue, reconciliation, and peace, the reality over which he has presided contrasts with his flamboyant expression of those values. Timor-Leste cannot afford another power quarrel among the elites of the type that led to the 2006 crisis, as those events not only retarded state and peace building, but also held back opportunities for economic development. Timor-Leste needs to exemplify in practice the values preached by its leaders to international audiences, and especially to fellow g7+ countries.

In the period from 2007 to 2015, the government of Timor-Leste led by Gusmão spent the staggering amount of $14 billion, and also took out hundreds of millions of dollars worth of loans from international institutions such the World Bank and the Asian Development Bank, from the Japanese government, and from Chinese banks. But too much of this money has been wasted on projects such as roads, which are already decaying through lack of proper maintenance. Furthermore, loans, whatever their short-term benefits, run the risk of adding to the economic burden and debt which will be borne by future generations.

Worse, during that period cronyism and corruption became rampant as a result of poor governance, wastefulness, and inefficiency. Just a couple of individuals, mostly well connected to the families of elites, benefited richly from government contracts through patron-client relationships, while the public at large continued to suffer from poor education, a low quality health service, bad roads, lack of satisfactory water and sanitation, childhood malnutrition, and high youth unemployment. The fact that the expulsion of judicial officers in 2014 took place immediately before the scheduled start date for the trial on corruption charges of the then-finance minister, a close ally of Gusmão, attracted comment at the time.

Instead of focusing on developing human capital and the non-oil economy, the Gusmão-led government’s major spotlight was on significant infrastructure projects relating to roads and electricity, and multi-billion dollars “megaprojects” such as the “Tasi Mane” developments on the south coast and the establishment of a Special Economic Zone in the Oecussi enclave (ZEEMS) . Numerous economic analyses, including from the World Bank, have cautioned that the expected returns of these mind-boggling multi-billion dollars ventures are insubstantial for poverty reduction and improving people’s wellbeing.

Experience to date has been that the millions of dollars spent on these megaprojects have done very little to lift local economies, as money has gone to foreign companies and their partners among elite families. Furthermore, these foreign companies only provide low level of labor and limited employment. The transfer of knowledge to local people is very limited.

Having missed most of the development targets set out in the nation’s Strategic Development Plan 2030 for the years from 2011 to 2018, Timor-Leste is running short on time. In order to avoid the calamity that looms as oil reserves and revenue are exhausted, the country needs to reprioritize its development, focusing more on human capital development, social capital development, and the non-oil economy.

If Timor-Leste cannot place its economic development on a sounder footing, the maturing and consolidation of its democracy is likely also to be jeopardized in the longer run. Seymour Martin Lipset noted in his influential 1959 book, Some Social Requisites of Democracy: Economic Development and Political Legitimacy, the significant role played by economic development and education in buttressing democracy.

In the context of Timor-Leste, the policy prescriptions that flow from Lipset’s insight make eminent good sense: investing in human capital will be essential for boosting productivity, pivotal for economic growth, and vital for democracy. Human capital can mainly be built through the education system that is funded by the state budget.

Timor-Leste’s most valuable asset is not oil, coffee, or sandalwood, but its people, a potentially unlimited development resource. The government must not only invest more in education, but also invest it more efficiently. Investment in human capital is the most genuine and decisive public investment, because the expected returns are quite high and typically materialize over the long period of time. Such investment has underpinned the rise of the Asian tiger economies of the late 20th and 21st centuries.

The Timor-Leste National Human Development Report 2018 by the United Nations Development Program (UNDP) found that under-budgeting in education and training contributes significantly to high unemployment, as most youth are not highly skilled, and are unprepared for the job market and decent employment. This highlights again that investing in education and training is key for not only for individuals but also for society at large, driving economic growth, productivity, and innovation. Furthermore, education is also a viable solution to poverty, social injustice, and unequal distribution of wealth.

If Timor-Leste wants to live up to its aspirations as a model for new democracies, then it has to move from a paradoxically colonialist mindset, which sees the country’s main assets as oil, coffee, or sandalwood, rather than people. Otherwise it faces an exceptionally high risk of becoming just another resource-cursed nation.

Jonas Guterres is an anti-corruption practitioner. He is former Advisor to Office of Commissioner at Anti-Corruption Commission of Timor-Leste (CAC), and former recipient of United States Timor-Leste (USTL) scholarship funded by the State Department. This article does not represent the views of any institutions that the author is affiliated with.