Rebuilding dependence
A comparison between East Timor and Iraq


Ed Hollants


How will the reconstruction of Iraq work out/proceed? It could be
instructive to look at the way reconstruction went ahead in East
Timor, which I had occasion to visit five times between 1999 and
2002. The first time as an independent monitor during the plebiscite which
led to independence, and afterwards to help establish an independent
Timorese human rights group. Different as the situation in the two
countries may be, there are a number of similarities between East Timor
and Iraq that are worth considering: - There is a large group of refugees
in Western countries who will be returning, bringing financial capital and
contacts; - There is an interim government, formed by people from outside
the country, which is intended to lead to the construction of a state
headed by a democratic government after the Western model; - There has
been widespread destruction and reconstruction by foreign companies. - And
last but not least, in both cases there is a strategic interest for the
US. In the case of Iraq this is quite clear. But we must not forget that
East Timor is situated on the outskirts of the Indonesian archipelago,
which houses the largest Muslim population in the world and which can be
expected to take a less western course in the future. A future military
base on East Timor may then be an option. And of course, oil plays an
important role in both cases.

In East Timor, the UN, in the form of UNTAET (United Nations
Transitional Administration in East Timor) during a period of over
two years de facto took over the government of East Timor and the UN
played a substantial role in the reconstruction effort. The US had a major
finger in the pie, not just through the UN, but also by means of USAID,
the largest financial governmental donor (US development aid), the IMF and
the World Bank. Among other things, they forcefully introduced the US
dollar as the national currency. Apart from the US, Australia was a major
influence. They supplied most of the troops for maintaining public

Returning refugees

One of the things that quickly began to cause tension in East Timor
was the return of those East Timorese who had earlier fled the
Indonesian occupation and who had gone on to build their fortunes,
mainly in Australia. A number of these Timorese not only have
financial resources, but also good contacts in Australia and the know- how
to deal with the (capitalist) way of doing business of Australian
companies. They are the ones who, in close cooperation wit the Australian
companies, benefit most from the reconstruction effort. Hotels, shops and
restaurants are being rebuilt and restored at a rapid pace, mainly to
provide the many UN employees with the standard of luxury they seem unable
to do without. The same phenomenon can be detected in the newly
established political structures, which will feature even more strongly in
the case of Iraq, where the opposition from abroad will in all likelihood
play an important part, mainly due to pressure from the Pentagon. I refer
to the Iraqi National Congress, led by Chalabi. He has good contacts with
the American Vice- President Dick Cheney and Secretary of Defence Paul
Wolfowitz, two leading ultra-conservative hawks. He further maintains
close relations with the oil lobby and apparently also with the leading
pro- Israeli lobby group AIPAC. All in all the INC has received funds to a
value of 97 million dollar from the American government. While the native
population still needs to recover from the acts of violence and years of
oppression, these ‘refugees’ return to seize their opportunity.

Interim government

All aid is clearly intended to form a state according to our Western model
as quickly as possible, rather than let autonomous developments rooted in
the people’s own history and experience take their course. Both East Timor
and Iraq have never known a democratic state. A state which predominantly
ensures a free reign for (foreign) enterprise, prevents radical
alternatives and suppresses rebelliousness. Everything is organised from
above. Capable people are increasingly drawn into what is in fact a model
that was forced upon them, making them dependent. Confronted with dire
emergencies and the absence of viable alternatives (the foreign
administration keeps coming up with given facts, preconditions and time
limits), it becomes increasingly difficult to mark time. People are made
co- responsible for decisions which are not easily explained to the
people, thus forming a political elite. Community initiatives rarely get a
chance, as the population has no access to the necessary funds or gets
caught up in the wheels of government.

Foreign enterprise

Foreign enterprise is accommodated in every way. At Dili airport in
East Timor one could see planes full of businessmen and fortune
seekers arriving, their only aim being to get rich as quickly as
possible. Construction companies in East Timor are almost exclusively
foreign-based, operating with mostly non-Timorese staff. Even Indonesian
companies, with Indonesian employees, are setting up shop in East Timor.
This phenomenon helps create an economy within an economy, a fact which
also showed clearly in the case of countries such as Cambodia, which also
came under UN rule after the country had been torn apart. This results in
company turnover and profits immediately leaving the country, mostly
untaxed. The same goes for a substantial part of the aid funds, as these
moneys are to a large extent spent on wages for the interim bureaucrats,
aid workers and foreign military staff. But East Timor also witnessed
large tracts of land being bought up, which were likely to yield a profit
in the near future, for example in the proximity of the airport, or land
in locations likely to become tourist havens and coffee plantations.
Should foreign investors encounter preconditions being set, they simply
use a Timorese middleman. In the legal vacuum of such transition periods
the cards for the future are quickly shuffled. The Timor Sea, which in
part belongs to East Timor, is full of oil. Meanwhile contracts have been
agreed which entitle Australia to 60 percent of total revenue. Vital
infrastructure also passes into foreign hands. Both the mobile and fixed
telephone networks in Dili were set up by the Australian telephone company
Telstra, commissioned by the Australian army. They made millions of
dollars, without any durable investment in East Timor. This is bound to be
even more the case in Iraq. Already contracts have been agreed for the
reconstruction of the oil installations and construction companies such as
Halliburton, of which Dick Cheney was CEO for five years and is still a
major shareholder.

New dependence

The Timorese, like the Iraqi’s currently on the US, looked upon the
UN more as an occupying force than as its liberators. From the start, the
East Timorese were not happy with their arrival. This resulted in them
taking an impassive and indifferent stance. With the UN operating from the
viewpoint that they would have to ‘teach’ the Timorese what democracy
entails and how to rebuild the country, there is virtually no cooperation.
The Timorese are biding their time until the UN leaves. In the mean time,
a political and economic tier has been formed which is incorporated into
the ‘democratic’ capitalist system and which has very little affinity with
the needs and desires of the Timorese people. Apparently the US is so
influential that East Timor, not withstanding its recent history, was one
of the first countries to sign a bilateral agreement with the US to
sideline the International Criminal Court. They also agreed a Status of
Forces Agreement (SOFA) with the US on 1 October 2002. The SOFA pertains
to US military personnel. They are given the same status as US embassy
staff to which the 1961 Vienna Convention for diplomatic relations
applies. This effectively grants military forces in East Timor diplomatic
immunity. They are exempt from tax legislation, contract rules and
criminal law. The East Timorese authorities forfeit the right to take them
to court, imprison them, expel them, search their premises, call upon them
as witnesses or hold them responsible for children fathered with Timorese
women. Iraq had better be prepared!

East Timor is totally dependent on foreign capital and investment and has
been forced onto the globalised markets. Thus it has immediately forfeited
its hard-won independence which has cost hundreds of thousands of people
their lives. This automatically results in the larger part of the
population losing faith in a new and better future, which increases the
mood that it is ‘every man for himself’. Many Timorese are disillusioned.
In many ways they are no better off, if not worse, than under the
Indonesian occupation. Under Indonesian occupation they could still
cherish the prospect of liberation and independence. Now they have lost
track and it may be a long time before they get back on it. Which is
precisely what the US favour, both in the case of East Timor as of Iraq.
The aim is to incorporate these countries in the so-called free world
market, where they have no means of competing, given the existing
political and economic balance of power. In this way these countries
effectively lose control over commodities such as their oil. And that is
what is behind the so-called democratisation of the Middle-East.

Ed Hollants, Autonoom Centrum