Oxfam Community Aid Abroad Australia

Australia pushing East Timor to brink of becoming failed state

May 20 2004

Two years after achieving independence, East Timor is at risk of becoming a failed state, with the Australian Government’s approach to negotiating a maritime boundary impeding the new nation’s capacity to finance its long term development.

A new report by Oxfam Community Aid Abroad released to coincide with the 2nd anniversary of East Timor’s independence highlights the mounting poverty of the East Timorese people, where less than half the adult population can read and write, 41% live below the poverty line and one in ten East Timorese children born today will die before the age of five.

Although Australia has been a generous donor to East Timor, the Australian Government is reaping over $1 million per day from oil and gas in a disputed area of the Timor Sea that is twice as close to East Timor as it is to Australia. Australia has received nearly ten times as much revenue from Timor Sea oil and gas than it has provided in aid to East Timor since 1999.

“ The vast oil and gas reserves of the Timor Sea provide East Timor with a window of opportunity for providing for its people and future generations” says James Ensor, Oxfam Community Aid Abroad’s Director of Public Policy. “However Australia is not displaying good faith in its current negotiations with our neighbour”.

Under a temporary treaty signed with East Timor, Australia has access to two-thirds of the known oil and gas deposits in the Timor Sea, even though a maritime boundary set according to international law could deliver most, if not all, these resources to East Timor.

“ Australia has withdrawn its adherence to the International Court of Justice and International Treaty of the Law of the Sea, denying East Timor’s right to independent, third-party arbitration of maritime disputes” said Ensor. “While Australia is required to show restraint in exploiting oil and gas reserves in areas of overlapping claims, the Australian government continues to issue unilateral exploration licenses and receive revenues from some oil fields within these areas.”

Facing a budget deficit of US$30 million for the next four years, East Timor is heavily reliant on foreign aid for addressing health, education, employment, justice, security and infrastructure needs. However foreign aid is set to rapidly decline over coming years. For example, Australian aid to East Timor next financial year will decrease by 8.4% from the previous year.

“ It is in Australia’s national interest to do all it can to reduce the absolute poverty and to promote social, economic and political stability in East Timor” said Ensor. “East Timor wants access to the resources it believes it is entitled to under international law so that it can develop without a dependence on foreign aid”.