Timor-Leste, formerly East Timor, saw a new round of political turmoil in February after the government coalition collapsed and the prime minister resigned. While the tiny Southeast Asian nation is no stranger to political upheaval, these latest developments come at a time of increased tension and economic uncertainty across the region.
The trigger for the latest crisis was the budget failing to pass in the parliament. This was despite the ruling Alliance for Change and Progress coalition having an outright majority.
The Alliance for Change and Progress had governed since the May 2018 election. The coalition included the National Congress for Timorese Reconstruction (CNRT) party led by Xanana Gusmao, the Popular Liberation Party (PLP) of Taur Matan Ruak, and Khunto, which is a party with connections to martial arts groups.
When the Alliance for Change and Progress first came to power it was expected that Gusmao from the dominant CNRT would be the prime minister, but instead Ruak was selected. This was explained as a concession to help give the coalition stability, but it’s clear that tensions have simmered, and differences over the country’s economic direction have not gone away.
Adding to the tensions, the president, from the opposition Fretilin, refused to install nine CNRT and Khunto nominated ministers. This meant that Ruak’s smaller PLP dominated the cabinet.
In a major rebuff to Ruak, Gusmao’s CNRT abstained from voting for the 2020 budget. This brought the Alliance for Change and Progress coalition to an end, and effectively forced Ruak to resign as prime minister.
Gusmao has now brought together a new parliamentary coalition and asked for it to be recognised by the president. It includes the CNRT, Khunto, the Democratic Party, the United Party for Development and Democracy, Frente Mudanca and the Timorese Democratic Union.
Gusmao himself is expected to be the new prime minister but it remains to be seen if the president will budge on the question of ministerial appointments. If he doesn’t budge it could trigger a new political stalemate and become a major drag on the economy. Recession looms and a new election may need to be called.
The economy in Timor-Leste is hugely dependent on government spending and in the absence of an agreed budget the state is forced onto a reserve system of monthly extensions to the 2019 budget. This means that new programs and initiatives cannot be pursued. Of particular concern to big business interests is spending on new projects related to the fossil fuel sector.
While the dispute over the budget is a power struggle between the main parties, at base it’s about who has control of the country’s main economic levers. At the centre of the debates about the nation’s economic direction is the Tasi Mane infrastructure project, which is linked to an estimated $50 billion worth of reserves in the Greater Sunrise oil and gas field in the Timor Sea.
The area in the Timor Sea between Timor-Leste and Australia was long the subject of a maritime border dispute. For years Australia had the upper hand and took the majority of the resources from the area, but a new settlement was reached last year that vastly increased Timor-Leste’s share.
The Timor-Leste government now wants to pipe gas from those fields to a new $12 billion liquefied natural gas plant which would be connected to an industrial complex called Tasi Mane. Parts of the complex are already under construction on Timor-Leste’s southern coast.
But Australian big business interests, led by Woodside Petroleum, want the gas piped to existing refineries in Darwin. So far, no agreement between the parties has been reached. While billions of dollars are at stake for Australian energy companies, and the Australian state, there are also major political considerations.
Gusmao’s pet project
Xanana Gusmao sees Tasi Mane as his pet project. In the recent past he has collaborated closely with the Australian government, who are politically aligned with the US. But now he is threatening to lean on Chinese interests to help finance Tasi Mane. The opposition Fretilin has been even more open to Chinese cooperation.
While Gusmao may well be using the ploy as bargaining chips in negotiations with Canberra and Woodside, there are clearly others in the Timor-Leste parliament that have no hesitation in building closer links with the Chinese state and corporations.
This worries Canberra, and many in the Australian ruling class, as they scramble to find their place amidst the wider US/China conflict that is engulfing the world.
For Timor-Leste, Chinese funding could enable them to deliver a new onshore liquefied natural gas plant that could help underpin government spending. That said, it would come at a cost. The Timor-Leste government would end up heavily indebted to China, and an inability to pay those debts could risk having to give up control of the project. This has happened in other countries like Sri Lanka.
Given that the economy is so dependent on oil and gas this could curtail Timor-Leste’s sovereignty further. It’s with this in mind that some in the Timor-Leste parliament are weary about putting all their eggs in the Tasi Mane basket, preferring to pursue investment in a more diversified economy. But this is also fraught with problems, and there is a real prospect that the economy could tank in the meantime.
The alternative of letting Australia get its way in relation to the Greater Sunrise would mean Timor-Leste being indebted to Australian imperial interests, and probably the effective continuation of unfair resource-sharing arrangements.
Canberra is desperate to try and block significant Chinese investment in Timor-Leste, a country that it has long seen as a sort of client state. In addition to the financial considerations, it could even lead to the prospect of a permanent Chinese naval presence on the south coast of Timor-Leste, just 450 kilometres from Darwin.
While the US/China conflict is the backdrop to the jostling for power in Timor-Leste, the roots of the crisis stem from the inability of this tiny nation to develop on the basis of capitalism.
For years the masses struggled for independence from Portugal, and then against Indonesian occupation. The country was formally recognised as independent in 2002 but since then it’s been unable to break the imperialist shackles that remain.
End capitalist looting
For the working class and the poor in Timor-Leste choosing between one form of imperialism or another is a dead end. The only solution is to break with the system of capitalist looting and corruption and for the masses to take control of their own affairs and resources.
The billions in profits currently being stolen by the big energy companies and foreign capitalist states could instead be used to create jobs by improving housing, healthcare, education, agriculture and basic infrastructure.
Only a system based on the collective ownership of wealth and resources, democratic control and sustainable planning could raise the living standards of ordinary people, and transform what is still one of the poorest countries on earth. Given this type of vision is at odds with the outlook of all the parties in the parliament, a political alternative for the masses is needed.
Even the leaders of the main parties in Timor-Leste know that people won’t be lifted from poverty via corporate interests in either China or Australia. They are just manoeuvring to get their own piece of the action. All they care about is power, prestige and building their own mini fiefdoms.
The opposition Fretilin, for their part, will be waiting and hoping that Gusmao’s new six-party coalition will be beset by crisis leaving them in a position to pick up the spoils at the next election. But politically Fretilin have very few differences with the CNRT. If they do manage to come to power nothing fundamental will change.
The future for small, poor countries like Timor-Leste lies in the fight for a socialist future, where workers and the poor from all right across the region cooperate to put an end to exploitation and oppression of all kinds.
By Anthony Main