East Timor: Xanana Gusmão’s Party Wins Most Seats

Wednesday, 11 July 2012

Background

The National Congress for Timorese Reconstruction has secured the majority of seats in East Timor’s parliamentary polls. Led by charismatic former resistance leader, Xanana Gusmão, the party will require the support of a coalition to secure a majority to govern. With his nation at a crossroad, Prime Minister Gusmão can no longer capitalise on his reputation alone. To reach ambitious targets, such as joining the Association of South-East Asian Nations, fundamental economic, social and security challenges must be resolved.

Comment

Prime Minister Xanana Gusmão and his party have secured the most votes in the weekend’s parliamentary elections. As expected, however, his centre-left National Congress for Timorese Reconstruction (CNRT) failed to secure an absolute majority. It secured 31 of the 65 parliamentary seats, two shy of the number required to govern alone. 

As a result, the Prime Minister’s most immediate challenge will be to form a coalition. The nation’s main opposition group, the left-wing Fretilin party, is expected to win 24 seats, while CNRT’s previous coalition partner, The Democratic Party (PD), will take 8 seats. The remaining two seats are expected to be held by Frente-Mudanca.

Monitors characterised the elections as organised, transparent and peaceful. Additionally - as was the case in Presidential elections held in March and April - the latest poll was largely run by the East Timorese themselves, an important litmus test for the fragile democracy. Analysts fear, however, that drawn-out negotiations to form a coalition and protracted post-election wrangling, could lead to scenes reminiscent of the traumatic events of 2006-07. Such violence would seriously undermine the United Nation’s plan to withdraw its 1,300 peacekeepers by the end of the year.

In addition to political wrangling, Prime Minister Gusmão faces fundamental economic challenges, particularly improving economic management. Energy rich and with a considerable sovereign wealth fund of $11 billion, East Timor is an ostensibly wealthy state. Yet, this petroleum fund finances almost all of government expenditure, and, in reality, given the undeveloped nature of East Timor’s economy, almost all non-government economic activity as well.

Recently, the Prime Minister has sought to use the cash reserve to fund ambitious infrastructure projects. Opposition figures argue, however, that rather than using the capital, the Government should use only the interest the fund produces. Similarly, the fund has also been used to appease resistance veterans and militia, providing them with lucrative pensions in exchange for laying down their arms.

Understandably, analysts contend that East Timor is falling prey to a resource curse. Corruption is increasing, with graft cases bought against members of the Cabinet. Artificially inflating the small, underdeveloped economy has also produced an inflation rate of 17 per cent. Resolving these challenges, will be an immediate priority for the new coalition. 

Linked to this, the most significant challenge for the new government will be developing immediate and long-term policy to increase economic opportunities for the island’s population. Fifty per cent of East Timor’s 1.1 million people are officially classified as living in poverty. According to a recent assessment by the Economist: “malnutrition among children is common, maternal mortality is one of the highest in Asia, and infectious diseases such as tuberculosis and hepatitis-B are endemic.”

In many ways, Xanana Gusmão’s election is a continuation of decade-long post-revolutionary euphoria. Importantly, however, with the withdrawal of UN observers and the decision on the Greater Sunrise hydrocarbon project, East Timor is at a crossroad. Within this term, the credibility of Prime Minister Gusmão and the very future of East Timor may well be decided.

Liam McHugh

Research Manager

Northern Australia/ Energy Security Research Programmes