Political Economy of Global Change and Security
‘UN Intervention in East Timor’
Author: Tomas Freitas
Background
After the referendum of 30 August 1999, East Timorese become the newest country of the 21st century. The riots and burnings occurred around the whole country from 4th of September 1999 after hearing the results of the voting. The International Force for East Timor (INTERFET) led by the Australian Defence Force arrived in Dili on 20 September 1999. The crisis began then: no food, no clean water, and no shelter for almost three months before the United Nations Transitional Administration in East Timor (UNTAET) officially opened and run from 2000 to 2002.
This learning journal will analyse the elements of the United Nations intervention with regard to conflict and violence post-referendum.
Intervention and Aid Industries
The UN intervention has enabled aid industries to absorb aid money for their own pockets. UNTAET itself spent US$1 billion just in operating the UN office in Dili and the other 13 district. Bilateral projects came to about US$180 million, the Trust Fund for East Timor (TFET) spent US$168 million, the Consolidated Inter-Agencies Appeal spent US$156 million, local and international spent US$50 million, and the Consolidated Fund for East Timor (CFET) spent US$50 million, in addition to which there was US$25 million from the Timor Sea revenue, (La’o Hamutuk, 2001). The total of this money is around two billion US dollars.
It is clear that intervention has become a great opportunity for aid industries to exercise and implement their own agenda. Many times they have overlapping programs and activities; even if this is realised, it cannot be changed because it is already designed from their own headquarters which not based in Dili. As an example, one of the international agencies delivered dozens of colourbond roofs to the community in Manatuto District, and at the same place two weeks before, another International NGOs also delivered the same products to the same families. Such an incident happens not only because of lack of coordination but also related to budget execution, in which the budget must be spent before the end of the financial year.
Intervention and the Neoliberal Agenda
The International Monetary Fund (IMF) has been appointed for the development of East Timor’s future economy. During the transition period from 2000 to 2002, the IMF recommended two proposals for the establishment of the Central Payments Office which became the Banking and Payments Authority, and the Central Fiscal Authority became the Ministry of Finance. According to an IMF report, this established East Timor’s economic framework based on macroeconomic management (Valdivieso et al, 2000). Implementation of one of the policies involved future spending cuts, which resulted in a reduction of 6.5% being spent on wages and salaries, and a 13% cut on goods and services, for example wages for civil servants was reduced from US$123 per month to US$85 per month during the transition (La’o Hamutuk, 2001).
Deregulation is one of the critical recommendations that the IMF always provides for its clients, which includes cutting taxes, and cutting spending on public services. The reduction in wages has affected the efficiency of public services; corruption has grown because the small salary is not equivalent to the cost of living. However, this kind of deregulation only applies to local staff not international staff, the lowest of which receives above US$3000 per month.
The World Bank had the responsibility of managing donor’s contributions to rebuilding the country with a total of US$166 million for two and a half years. That money has been divided into several projects including 23% being allocated for health sector rehabilitation and development, 14% for community empowerment and local government, 12% for agriculture rehabilitation, 8% for emergency school readiness, 6% for small enterprise, 5% for microfinance development, 2% for capacity-building for economic institutions and support for budget preparation, less than 1% for Dili community employment generation, and the Asian Development Bank separately has managed 18% of the fund for emergency infrastructure rehabilitation (La’o Hamutuk, 2001).
Although it has some genuine programs, the World Bank never forgets its own principle in driving neoliberal ideas; one of the programs called ‘small enterprises’ which is worth about ten million US dollars has been given to a Portuguese commercial bank called Banco Nacional Ultramarino (BNU). The program is to provide loans to East Timorese small business groups with ‘viable business plans’, which can receive loans worth US$500 to US$50,000, on a 36-month term, (La’o Hamutuk, 2001). Those who can repay the loan will have another chance at additional loans.
However, in one of the districts, Bobonaro, west of Dili, the program failed - most of the small businesses do not have any experience in doing business. A large number of kiosks were opened up within 20 meters from each other, all kiosk selling pretty much the same products such as cigarettes, soft drinks, canned food, noodles and others basics, (Moxham, 2005). Because they could not repay their loans, some of them lost property including land and homes as they had used these as warranty for the loans.
Intervention and Inequality
The UNTAET budget for the fiscal year 2001 with a total amount of US$563 million included an allocation of US$199 million for wages and salaries for the UN staff, including 1350 UN Police, with living expenses calculated at US$95 per person per day and with wages at US$3,000 per person per month, and also receiving a salary form their national governments. The budget also has used to pay 1200 international staff salary with an average pay of US$7,800 per person per month and also including their per diem at approximately US$3,000 per person per month. The budget also paid for approximately 800 UN volunteers with a living allowance of US$2,250 per person per month. The 1% of the budget which was allocated to local staff totalled US$5.5 million, paying for 2,000 local staff with an average wage of US$240 per person per month (La’o Hamutuk, 2001).
US$5.5 million for local staff and US$194 million for international staff shows a huge gap. The concern is not only about discrimination, but about the functioning of the transitional administration. Let’s take an example, a local staff who is working in the political affairs division is supposed to provide accurate data and information to the head of the UN mission in regarding to a plan for an upcoming protest rally. How seriously will this local staff provide this very important information, if he or she is living on only US$240 a month? With such gaps in benefits, it is no wonder that the UN mission in East Timor many times responded late to crises.
Conclusion
The aim of the intervention is to prepare a new country as a nation and as a state. Generous contribution of tax payers from each country has become an aid industry, which is supposed to be in the form of grants, not small loans. Some people say the variable of wages is determined by level of skill and background of education. Yes, perhaps that is rational but these matters are not brought to attention when fundraising for aid is happening.
The Political Economy of Oil:
‘East Timor Natural Resources’
Author: Tomas Freitas
Introduction
Despite some arguments stating that the war in Iraq is not because of oil, it is indeed the case because the international oil companies prefer to deal with a stable and secure country in order to extract the resources (Zadeh, 2006). The notion that the presence of giant oil companies such as British Petroleum, Exxon Mobile, Chevron, Conoco Philips, Woodside, Shell and others around the world has nothing to do with any conflicts, invasions or economic changes has to be re-examined. This learning journal will analyse this statement in relation to the political economy of oil in East Timor (Timor-Leste) and try to illustrate the interconnection between oil companies, states and conflicts around oil issues.
Historical background
The Indonesian military invaded East Timor in 1975 with United States supplied weapons (Burr & Evans, 2001), and the official visits by United States President Gerald Ford and Secretary of State Henry Kissinger in early 1975 gave a green light to Soeharto to kill thousands of civilians during the invasion. The Carnation Revolution in Portugal 1975 and the issue of communism silenced the Australian government during the assault from Indonesia. And on 20 January 1978 the Australian government officially recognised that East Timor is part of Indonesia, a state of affairs which continued until the referendum in East Timor in 1999.
The question is: Why did the Australia government remain silent?
Conflict of interest
There are several facts that might justify Australia’s position. Let’s start with the treaty of the Seabed Boundary between Indonesia and Australia which was signed in 1972; the boundary itself at that time could not be finalised because at that time East Timor was still under Portuguese territorial administration, which is why this area of sea was known as the ‘Timor Gap’. According to Woodside, Greater Sunrise was discovered in 1974 (Woodside, 2011), the location of which is exactly at the end of the seabed line boundary, the east coast of the island of Timor (La’o Hamutuk, 2008). According to petroleum geologists, there are several steps before production of the first barrel of oil, starting with exploration, appraisal, development, and production (O’Connor, 2011), and the exploration stage normally takes 3 – 5 years before the announcement of a new discovery. In the case of the seabed boundary treaty, it is hard to ignore the proposition that this period of time brought to light some of the information in regard to oil and gas fields which would economically benefit both parties (Australia and Indonesia) in the future.
The Timor Gap Treaty was signed in 1989. After the Santa Cruz massacre in November 1991, and in December, Australia and Indonesia awarded production sharing contracts to one of the U.S. based companies Philips Petroleum (which later become Conoco Philips) and after four years; in 1995 Philips Petroleum announced a new discovery, of the Bayu Undan fields. Conoco Philips has a majority share (56.7%) of Bayu Undan, together with IMPEX (12%), ENI (12%), and Santos (10%), (Wilkinson, 2006). Besides that, Conoco Philips also has a 30% share of Greater Sunrise, which is in a joint venture with Australian based company Woodside, as operator with a 33.44% share, Shell (26.56%) and Osaka Gas (10%).
Generally, oil companies are considered to be one hundred percent profit-seeking ventures which are not related to local or global geopolitical tension. However, let’s have a look some of the members of the board of directors inside Conoco Philips, such as Stapleton Roy, Managing Directors of Kissinger Associates in 2001, Assistant secretary of state for intelligence and Research in 1999 to 2000, and former ambassador of U.S. to Singapore, Indonesia and China(Conoco Philips, 2004); Kenneth Duberstein, former White House Chief of Staff and Deputy Chief of Staff to President Ronald Reagan and Deputy Under-Secretary of Labour during the Gerald Ford administration (Conoco Philips, 2006); Richard Armitage, U.S. Deputy Secretary of State from 2001 to 2005, Assistant Secretary of Defense for International Security Affairs from 1983 (Conoco Philips, 2009); and Charles Krulak, former Commander of the U.S. Marine Corps and member of the Joint Chiefs of Staff from 1995 to 1999 (Conoco, Philips 2006).
If we consider the profiles of the members of the Board of Directors above, it is hard to avoid the conclusion that their military knowledge and political experience can influence the company direction.
Conclusion
The issue of communism in South East Asia, especially in East Timor, has become a key issue for the United States and its cronies like Indonesia and Australia, to expand their economic interests. Invasions, treaties, and contracts are the usual strategies for exercising their economic profits; and through their military knowledge and political experience, they are able to maintain their economic benefits.
The Political Economy of ‘Interventions’
‘Australia’s Second Intervention in East Timor’
Author: Tomas Freitas
Background
The dismissal of six hundred troops from the East Timor Defence Force in early 2006 was the precursor to major unrest in Dili that year. In May 2006, the East Timor government officially requested international military assistance; troops were provided by Australia and New Zealand, and police by Malaysia and Portugal. The Australian government willingly deployed a 1300-strong battalion of the Australian Defence Force (ADF), with the aim of re-establishing and maintaining public order.
This learning journal will analyse the interest of the Australian government in intervening in the 2006 political crisis in East Timor.
One month after the arrival of Australian troops, Prime Minister Alkatiri resigned from his position, and according to an ABC television program, President Xanana Gusmao accused the Fretilin leader that he had armed militias and asked him to step down (Thompson, 2006).
Reasons behind the Intervention
However, according to Tim Anderson’s articles on Australia’s second intervention in East Timor (2006), the main reason that the Australian government cited for the intervention was to use Australian assistance to stop East Timor from disintegrating into a ‘failed state’. Tim Anderson has analysed that there are three reasons behind the intervention - firstly the issue of oil and gas in Timor Sea, secondly Ausaid’s contribution in consolidating the neoliberal agenda through collaboration with the World Bank and their allies, and thirdly that East Timor’s bilateral cooperation with China and Cuba had caused concern for the Australian government.
These reasons make sense: in the first issue, Australia rejected the settlement of the maritime boundary according to the United Nations Convention on the of Law of the Sea (UNCLOS), withdrawing from the International Court of Justice and refusing to accept the median line as an equitable solution – if not, all of the natural resources inside the Joint Petroleum Development Area (JPDA) would belong to East Timor.
In regard to the second reason, the Ausaid contribution for the period 2008-2012 which will total AUD$250 million in commitment, as well as funding already promised, would be managed by several agencies, Australian agencies (25%), World Bank (18%), United Nations agencies (8.5%), Asian Development Bank (4.9%), and the remainder (43.6%) divided between several international agencies (Ausaid, 2011). Even though the implementation of the program would be coordinated with the East Timor government as a counterpart, the East Timor government receives nothing from this funding.
The third reason, that Australia is suspicious of the relationship between China and East Timor, in which China has promised US$1.5 billion to East Timor (Macauhub, 2011), also building the palace of the President of the Republic, the new foreign affairs building and the military training centre for the Timorese Defence Force. The Australian Government is also concerned regarding the relationship between East Timor and Cuba, and under the Alkatiri government, the Cuban government provided 1000 scholarships for Timorese students to study medicine. In comparison, each year eight Timorese students receive scholarships from Ausaid to study at Australian universities. Why can the Australian government not provide a similar number of scholarships as the Cuban government? The answer is the Cuban education system is free because they are a socialist economy, whereas Australia has a capitalist economy. This means that in Australia universities are businesses, meaning that Ausaid has to pay huge amounts of money, just for bringing one international student, costing twenty to thirty thousand dollars.
After Mari Alkatiri resigned in 2006 and after the coup of the Fretilin government in 2007, which was replaced by the Gusmao government, what has changed? The answer is not much, the Gusmao government is still resisting the gas pipeline to Darwin, the Gusmao government still supports medical students in Cuba until their graduation, and the Gusmao government still accepts Chinese bilateral contributions to infrastructure. Prime Minister Xanana Gusmao felt very upset when, as President, he asked John Howard and Alexander Downer to open up TAFE positions for Timorese students, and to allow Timorese to pick fruit in Australia, without a favourable response. Even after a change of government from Fretilin to AMP, Ausaid still does not trust the Timorese government to manage the funds, and the numbers of scholarships are still the same as under the previous government.
What does Australia actually want from this intervention? Oil, perhaps yes, but this is not one hundred percent true, because Australia also has bigger fields like Gordon, Evan Shoals, and hundreds of oil and gas fields around Australia both offshore and onshore, which provide billions of dollars of revenue to the government. If it is not about oil, maybe the intervention is to prevent Alkatiri government from turning towards communism? This cannot be true because the Fretilin Party itself has declared their ideology to be social democrat and practically speaking also the Fretilin government has in that period provided space for private business to be involved in the development of infrastructure.
The only possible answer is that Australia wants to create a ‘puppet government’ which can be commanded by ‘remote control’ from Canberra. The latest issue of a detention centre in East Timor, which the Gusmao government has not accepted, could affect the relationship between the two countries, and it will then be even harder for the Timorese government to advocate for more scholarships for Timorese students.
Conclusion
External intervention by the military is always a chance for a change of government, even with or without being forced. Canberra’s strategy in removal Alkatiri has been successful, with ABC television playing a very important role as a tool in displacing Alkatiri from the Prime Minister-ship. However, Canberra failed in programming the Gusmao government and Prime Minister Gusmao has maintained the relationship with China and Cuba and is still thinking of new strategies of how to win and bring the pipeline to East Timor. The neoliberal ideas of free market, privatisation, deregulation etc, can be more advanced in practicality if the ruling government shows willingness, and only a ‘puppet government’ can guarantee this willingness.
References
Anderson, T., 2006. ‘Timor-Leste: The Second Australia Intervention’, Journal of Australian Political Economy, Vol 58, pp 62-93
Australian Agency for International Development., 2011. ‘East-Timor Country Profile’, Available at http://www.ausaid.gov.au/country/country.cfm?CountryID=911&Region=EastAsia
Burr, W., & Evans, M., 2001. ‘Ford and Kissinger Gave Green Light to Indonesia’s Invasion of East Timor, 1975: New Documents Detail Conversations with Soeharto’, The National Security Archive. Available at http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB62/press.html and http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB62/doc3a.pdf
Conoco Philips., 2004. ‘Annual Report 2004’, Available at http://wh.conocophillips.com/about/reports/ar04/index.htm
Conoco Philips., 2006. ‘Annual Report 2006’, Available at http://www.conocophillips.com/EN/about/company_reports/annual_report/Documents/2006%20Annual%20Report.pdf
Conoco Philips, 2009. ‘Annual Report 2009’, Available at http://www.conocophillips.com/EN/about/company_reports/annual_report/Documents/2009%20Annual%20Report.pdf
La’o Hamutuk., 2001. ‘Funding East Timor’s Reconstruction’, The La’o Hamutuk Bulletin, Vol 2, No 1&2, Part 1. Available at http://www.laohamutuk.org/Bulletin/2001/Apr/bulletinv2n1.html
La’o Hamutuk., 2008. ‘Sunrise LNG in Timor-Leste: Dreams, Realities and Challenges’, Available at http://www.laohamutuk.org/Oil/LNG/chap1.htm#fig1
Macauhub, 2011. ‘China has promised US$1.5 billion to East Timor’. Available at http://www.macauhub.com.mo/en/
Moxham, B., 2005. ‘The World Bank’s Land of Kiosks: Community driving development in Timor-Leste’. ‘Development in Practice, Vol 15, No 3-4’.
O’Connor, S., 2011. ‘Oil and Gas Industry: Fundamentals of Petroleum Exploration, Appraisal, Development and Production’, Petroleum Skills Association. Available at http://new.pepanz.org.nz/psaNewsFile/Petroleum%20fundamentals%20of%20exploration,%20appraisal,%20development%20and%20production%20course%20feb%207.8.2011.pdf
Thompson, G., 2006. ‘Crisis talks continue as East Timor tensions intensify’, Australian Broadcasting Corporation. Available at http://www.abc.net.au/lateline/content/2006/s1650340.htm
Valdivieso, M, L., Endo, T., Mendonca, V, L., Tareq, S., Lopes-Meljia, A., 2000. ‘East Timor: Establishing the Foundations of Sound Macroeconomic Management’, International Monetary Fund. Available at http://www.imf.org/external/pubs/ft/Etimor/timor.pdf
Wilkinson, R., (2006). ‘Darwin a Natural Selection for LNG’, SEAAOC Petroleum News, www.seaaoc.com, retrieved 15 August 2011.
Woodside., 2011. ‘Our Business: Sunrise’, Available from http://www.woodside.com.au/Our+Business/Sunrise/
Zadeh, H, I., 2006. ‘The Political Economy of US Militarism: Chapter 1; The Military-Industrial Giant: An Empire in Itself’. Palgrave Macmillan.
‘UN Intervention in East Timor’
Author: Tomas Freitas
Background
After the referendum of 30 August 1999, East Timorese become the newest country of the 21st century. The riots and burnings occurred around the whole country from 4th of September 1999 after hearing the results of the voting. The International Force for East Timor (INTERFET) led by the Australian Defence Force arrived in Dili on 20 September 1999. The crisis began then: no food, no clean water, and no shelter for almost three months before the United Nations Transitional Administration in East Timor (UNTAET) officially opened and run from 2000 to 2002.
This learning journal will analyse the elements of the United Nations intervention with regard to conflict and violence post-referendum.
Intervention and Aid Industries
The UN intervention has enabled aid industries to absorb aid money for their own pockets. UNTAET itself spent US$1 billion just in operating the UN office in Dili and the other 13 district. Bilateral projects came to about US$180 million, the Trust Fund for East Timor (TFET) spent US$168 million, the Consolidated Inter-Agencies Appeal spent US$156 million, local and international spent US$50 million, and the Consolidated Fund for East Timor (CFET) spent US$50 million, in addition to which there was US$25 million from the Timor Sea revenue, (La’o Hamutuk, 2001). The total of this money is around two billion US dollars.
It is clear that intervention has become a great opportunity for aid industries to exercise and implement their own agenda. Many times they have overlapping programs and activities; even if this is realised, it cannot be changed because it is already designed from their own headquarters which not based in Dili. As an example, one of the international agencies delivered dozens of colourbond roofs to the community in Manatuto District, and at the same place two weeks before, another International NGOs also delivered the same products to the same families. Such an incident happens not only because of lack of coordination but also related to budget execution, in which the budget must be spent before the end of the financial year.
Intervention and the Neoliberal Agenda
The International Monetary Fund (IMF) has been appointed for the development of East Timor’s future economy. During the transition period from 2000 to 2002, the IMF recommended two proposals for the establishment of the Central Payments Office which became the Banking and Payments Authority, and the Central Fiscal Authority became the Ministry of Finance. According to an IMF report, this established East Timor’s economic framework based on macroeconomic management (Valdivieso et al, 2000). Implementation of one of the policies involved future spending cuts, which resulted in a reduction of 6.5% being spent on wages and salaries, and a 13% cut on goods and services, for example wages for civil servants was reduced from US$123 per month to US$85 per month during the transition (La’o Hamutuk, 2001).
Deregulation is one of the critical recommendations that the IMF always provides for its clients, which includes cutting taxes, and cutting spending on public services. The reduction in wages has affected the efficiency of public services; corruption has grown because the small salary is not equivalent to the cost of living. However, this kind of deregulation only applies to local staff not international staff, the lowest of which receives above US$3000 per month.
The World Bank had the responsibility of managing donor’s contributions to rebuilding the country with a total of US$166 million for two and a half years. That money has been divided into several projects including 23% being allocated for health sector rehabilitation and development, 14% for community empowerment and local government, 12% for agriculture rehabilitation, 8% for emergency school readiness, 6% for small enterprise, 5% for microfinance development, 2% for capacity-building for economic institutions and support for budget preparation, less than 1% for Dili community employment generation, and the Asian Development Bank separately has managed 18% of the fund for emergency infrastructure rehabilitation (La’o Hamutuk, 2001).
Although it has some genuine programs, the World Bank never forgets its own principle in driving neoliberal ideas; one of the programs called ‘small enterprises’ which is worth about ten million US dollars has been given to a Portuguese commercial bank called Banco Nacional Ultramarino (BNU). The program is to provide loans to East Timorese small business groups with ‘viable business plans’, which can receive loans worth US$500 to US$50,000, on a 36-month term, (La’o Hamutuk, 2001). Those who can repay the loan will have another chance at additional loans.
However, in one of the districts, Bobonaro, west of Dili, the program failed - most of the small businesses do not have any experience in doing business. A large number of kiosks were opened up within 20 meters from each other, all kiosk selling pretty much the same products such as cigarettes, soft drinks, canned food, noodles and others basics, (Moxham, 2005). Because they could not repay their loans, some of them lost property including land and homes as they had used these as warranty for the loans.
Intervention and Inequality
The UNTAET budget for the fiscal year 2001 with a total amount of US$563 million included an allocation of US$199 million for wages and salaries for the UN staff, including 1350 UN Police, with living expenses calculated at US$95 per person per day and with wages at US$3,000 per person per month, and also receiving a salary form their national governments. The budget also has used to pay 1200 international staff salary with an average pay of US$7,800 per person per month and also including their per diem at approximately US$3,000 per person per month. The budget also paid for approximately 800 UN volunteers with a living allowance of US$2,250 per person per month. The 1% of the budget which was allocated to local staff totalled US$5.5 million, paying for 2,000 local staff with an average wage of US$240 per person per month (La’o Hamutuk, 2001).
US$5.5 million for local staff and US$194 million for international staff shows a huge gap. The concern is not only about discrimination, but about the functioning of the transitional administration. Let’s take an example, a local staff who is working in the political affairs division is supposed to provide accurate data and information to the head of the UN mission in regarding to a plan for an upcoming protest rally. How seriously will this local staff provide this very important information, if he or she is living on only US$240 a month? With such gaps in benefits, it is no wonder that the UN mission in East Timor many times responded late to crises.
Conclusion
The aim of the intervention is to prepare a new country as a nation and as a state. Generous contribution of tax payers from each country has become an aid industry, which is supposed to be in the form of grants, not small loans. Some people say the variable of wages is determined by level of skill and background of education. Yes, perhaps that is rational but these matters are not brought to attention when fundraising for aid is happening.
The Political Economy of Oil:
‘East Timor Natural Resources’
Author: Tomas Freitas
Introduction
Despite some arguments stating that the war in Iraq is not because of oil, it is indeed the case because the international oil companies prefer to deal with a stable and secure country in order to extract the resources (Zadeh, 2006). The notion that the presence of giant oil companies such as British Petroleum, Exxon Mobile, Chevron, Conoco Philips, Woodside, Shell and others around the world has nothing to do with any conflicts, invasions or economic changes has to be re-examined. This learning journal will analyse this statement in relation to the political economy of oil in East Timor (Timor-Leste) and try to illustrate the interconnection between oil companies, states and conflicts around oil issues.
Historical background
The Indonesian military invaded East Timor in 1975 with United States supplied weapons (Burr & Evans, 2001), and the official visits by United States President Gerald Ford and Secretary of State Henry Kissinger in early 1975 gave a green light to Soeharto to kill thousands of civilians during the invasion. The Carnation Revolution in Portugal 1975 and the issue of communism silenced the Australian government during the assault from Indonesia. And on 20 January 1978 the Australian government officially recognised that East Timor is part of Indonesia, a state of affairs which continued until the referendum in East Timor in 1999.
The question is: Why did the Australia government remain silent?
Conflict of interest
There are several facts that might justify Australia’s position. Let’s start with the treaty of the Seabed Boundary between Indonesia and Australia which was signed in 1972; the boundary itself at that time could not be finalised because at that time East Timor was still under Portuguese territorial administration, which is why this area of sea was known as the ‘Timor Gap’. According to Woodside, Greater Sunrise was discovered in 1974 (Woodside, 2011), the location of which is exactly at the end of the seabed line boundary, the east coast of the island of Timor (La’o Hamutuk, 2008). According to petroleum geologists, there are several steps before production of the first barrel of oil, starting with exploration, appraisal, development, and production (O’Connor, 2011), and the exploration stage normally takes 3 – 5 years before the announcement of a new discovery. In the case of the seabed boundary treaty, it is hard to ignore the proposition that this period of time brought to light some of the information in regard to oil and gas fields which would economically benefit both parties (Australia and Indonesia) in the future.
The Timor Gap Treaty was signed in 1989. After the Santa Cruz massacre in November 1991, and in December, Australia and Indonesia awarded production sharing contracts to one of the U.S. based companies Philips Petroleum (which later become Conoco Philips) and after four years; in 1995 Philips Petroleum announced a new discovery, of the Bayu Undan fields. Conoco Philips has a majority share (56.7%) of Bayu Undan, together with IMPEX (12%), ENI (12%), and Santos (10%), (Wilkinson, 2006). Besides that, Conoco Philips also has a 30% share of Greater Sunrise, which is in a joint venture with Australian based company Woodside, as operator with a 33.44% share, Shell (26.56%) and Osaka Gas (10%).
Generally, oil companies are considered to be one hundred percent profit-seeking ventures which are not related to local or global geopolitical tension. However, let’s have a look some of the members of the board of directors inside Conoco Philips, such as Stapleton Roy, Managing Directors of Kissinger Associates in 2001, Assistant secretary of state for intelligence and Research in 1999 to 2000, and former ambassador of U.S. to Singapore, Indonesia and China(Conoco Philips, 2004); Kenneth Duberstein, former White House Chief of Staff and Deputy Chief of Staff to President Ronald Reagan and Deputy Under-Secretary of Labour during the Gerald Ford administration (Conoco Philips, 2006); Richard Armitage, U.S. Deputy Secretary of State from 2001 to 2005, Assistant Secretary of Defense for International Security Affairs from 1983 (Conoco Philips, 2009); and Charles Krulak, former Commander of the U.S. Marine Corps and member of the Joint Chiefs of Staff from 1995 to 1999 (Conoco, Philips 2006).
If we consider the profiles of the members of the Board of Directors above, it is hard to avoid the conclusion that their military knowledge and political experience can influence the company direction.
Conclusion
The issue of communism in South East Asia, especially in East Timor, has become a key issue for the United States and its cronies like Indonesia and Australia, to expand their economic interests. Invasions, treaties, and contracts are the usual strategies for exercising their economic profits; and through their military knowledge and political experience, they are able to maintain their economic benefits.
The Political Economy of ‘Interventions’
‘Australia’s Second Intervention in East Timor’
Author: Tomas Freitas
Background
The dismissal of six hundred troops from the East Timor Defence Force in early 2006 was the precursor to major unrest in Dili that year. In May 2006, the East Timor government officially requested international military assistance; troops were provided by Australia and New Zealand, and police by Malaysia and Portugal. The Australian government willingly deployed a 1300-strong battalion of the Australian Defence Force (ADF), with the aim of re-establishing and maintaining public order.
This learning journal will analyse the interest of the Australian government in intervening in the 2006 political crisis in East Timor.
One month after the arrival of Australian troops, Prime Minister Alkatiri resigned from his position, and according to an ABC television program, President Xanana Gusmao accused the Fretilin leader that he had armed militias and asked him to step down (Thompson, 2006).
Reasons behind the Intervention
However, according to Tim Anderson’s articles on Australia’s second intervention in East Timor (2006), the main reason that the Australian government cited for the intervention was to use Australian assistance to stop East Timor from disintegrating into a ‘failed state’. Tim Anderson has analysed that there are three reasons behind the intervention - firstly the issue of oil and gas in Timor Sea, secondly Ausaid’s contribution in consolidating the neoliberal agenda through collaboration with the World Bank and their allies, and thirdly that East Timor’s bilateral cooperation with China and Cuba had caused concern for the Australian government.
These reasons make sense: in the first issue, Australia rejected the settlement of the maritime boundary according to the United Nations Convention on the of Law of the Sea (UNCLOS), withdrawing from the International Court of Justice and refusing to accept the median line as an equitable solution – if not, all of the natural resources inside the Joint Petroleum Development Area (JPDA) would belong to East Timor.
In regard to the second reason, the Ausaid contribution for the period 2008-2012 which will total AUD$250 million in commitment, as well as funding already promised, would be managed by several agencies, Australian agencies (25%), World Bank (18%), United Nations agencies (8.5%), Asian Development Bank (4.9%), and the remainder (43.6%) divided between several international agencies (Ausaid, 2011). Even though the implementation of the program would be coordinated with the East Timor government as a counterpart, the East Timor government receives nothing from this funding.
The third reason, that Australia is suspicious of the relationship between China and East Timor, in which China has promised US$1.5 billion to East Timor (Macauhub, 2011), also building the palace of the President of the Republic, the new foreign affairs building and the military training centre for the Timorese Defence Force. The Australian Government is also concerned regarding the relationship between East Timor and Cuba, and under the Alkatiri government, the Cuban government provided 1000 scholarships for Timorese students to study medicine. In comparison, each year eight Timorese students receive scholarships from Ausaid to study at Australian universities. Why can the Australian government not provide a similar number of scholarships as the Cuban government? The answer is the Cuban education system is free because they are a socialist economy, whereas Australia has a capitalist economy. This means that in Australia universities are businesses, meaning that Ausaid has to pay huge amounts of money, just for bringing one international student, costing twenty to thirty thousand dollars.
After Mari Alkatiri resigned in 2006 and after the coup of the Fretilin government in 2007, which was replaced by the Gusmao government, what has changed? The answer is not much, the Gusmao government is still resisting the gas pipeline to Darwin, the Gusmao government still supports medical students in Cuba until their graduation, and the Gusmao government still accepts Chinese bilateral contributions to infrastructure. Prime Minister Xanana Gusmao felt very upset when, as President, he asked John Howard and Alexander Downer to open up TAFE positions for Timorese students, and to allow Timorese to pick fruit in Australia, without a favourable response. Even after a change of government from Fretilin to AMP, Ausaid still does not trust the Timorese government to manage the funds, and the numbers of scholarships are still the same as under the previous government.
What does Australia actually want from this intervention? Oil, perhaps yes, but this is not one hundred percent true, because Australia also has bigger fields like Gordon, Evan Shoals, and hundreds of oil and gas fields around Australia both offshore and onshore, which provide billions of dollars of revenue to the government. If it is not about oil, maybe the intervention is to prevent Alkatiri government from turning towards communism? This cannot be true because the Fretilin Party itself has declared their ideology to be social democrat and practically speaking also the Fretilin government has in that period provided space for private business to be involved in the development of infrastructure.
The only possible answer is that Australia wants to create a ‘puppet government’ which can be commanded by ‘remote control’ from Canberra. The latest issue of a detention centre in East Timor, which the Gusmao government has not accepted, could affect the relationship between the two countries, and it will then be even harder for the Timorese government to advocate for more scholarships for Timorese students.
Conclusion
External intervention by the military is always a chance for a change of government, even with or without being forced. Canberra’s strategy in removal Alkatiri has been successful, with ABC television playing a very important role as a tool in displacing Alkatiri from the Prime Minister-ship. However, Canberra failed in programming the Gusmao government and Prime Minister Gusmao has maintained the relationship with China and Cuba and is still thinking of new strategies of how to win and bring the pipeline to East Timor. The neoliberal ideas of free market, privatisation, deregulation etc, can be more advanced in practicality if the ruling government shows willingness, and only a ‘puppet government’ can guarantee this willingness.
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