political reviews • melanesia 563

-reaches-crisis-point/8780 [accessed The year also saw a historic agreement 10 Jan 2019] between Timor-Leste and Australia who, World Health ­Organization. 2014. that fixed maritime boundaries at the Noncommunicable Diseases Country median line in the Timor Sea (Leach Profiles 2014. https://apps.who.int/iris/ 2018), ending a long-running dispute bitstream/handle/10665/128038/ between the two nations. The year 9789241507509_eng.pdf?sequence=1 was capped off by the government [accessed 25 Jan 2019] outlining its bold vision for resource ———. 2018. Noncommunicable Diseases sovereignty, and its plan to purchase a Country Profiles 2016: Solomon Islands. majority share in the Greater Sunrise https://www.who.int/nmh/countries/2018/ joint venture, to advance its ambitious slb_en.pdf?ua=1 [accessed 25 Jan 2019] goal of downstream processing oil and ———. 2019. ncd Global Monitoring gas on the East Timorese south coast. Framework. Available from https://www The July 2017 election saw the .who.int/nmh/global_monitoring opposition fretilin party emerge _framework/en/ [accessed 13 May 2019]. narrowly ahead of the National Congress for Timorese Reconstruction (cnrt) in terms of seats but unable to establish the alliances necessary Timor-Leste to form a majority. With no alterna- From 25 January, when the president tive majority coalition then being announced an early election for 12 proposed, in September President May, it was clear that 2018 would Guterres appointed the first minor- prove an eventful political year in ity government in Timor-Leste’s short Timor-Leste. The May election fol- constitutional history: a thirty-seat lowed a nine-month fretilin-led minority coalition with the Demo- minority government, which proved cratic Party. But events moved rapidly, unable to steer its program and budget and a political standoff emerged in through Parliament because the oppo- October when three opposition par- sition parties formed a majority bloc ties—the cnrt, the Popular Liberation a month after the government was Party (plp), and Enrich the National installed (fretilin is the acronym for Unity of the Sons of Timor (khunto), one of Timor-Leste’s major political together controlling thirty-five of parties, the Revolutionary Front for an ­Parliament’s sixty-five seats—rejected Independent East Timor). The elec- the government’s program. tion brought the Xanana Gusmão–led Having failed to pass a budget recti- Alliance for Change and Progress fication measure needed to fund new (amp) coalition back into office. programs, the state reverted to a duo- Having returned to power, the new decimal system based on a monthly government soon found itself mired allocation of one-twelfth of the previ- in a standoff over ministerial appoint- ous year’s budget. The extended use of ments with the president, fretilin’s this reserve budget system lasted until Francisco Guterres, in the first genu- a new budget was passed in September ine experience of cohabitation under 2018, and it depressed the national Timor-Leste’s semi-presidential system. economy, which remains heavily reli- 564 the contemporary pacific • 31:2 (2019) ant on government-led expenditures. the revenue 90 to 10 in its favor. As Rather than installing the opposi- these fields are nearing the end of their tion amp coalition as the government, life, far more financially significant President Guterres instead announced is the renegotiated revenue split over a new election, with the fretilin– the as-yet-untapped Greater Sunrise Democratic Party executive acting field, worth in excess of us$40 billion, as a caretaker government in the which straddles the eastern lateral (or ­meantime. side) boundary of the Joint Petroleum Meanwhile, in the realm of inter- Development Area. national relations, maritime boundary The renegotiated agreement saw a negotiations with Australia continued substantial increase in Timor-Leste’s under the aegis of a United Nations share of the future Greater Sunrise Convention on the Law of the Sea revenues, from 50 percent to 70 or 80 (unclos) compulsory conciliation percent, pending resolution of the final process, which was triggered by contested issue of where the pipeline Timor-Leste. Following twelve months for downstream processing will land— of negotiations that saw “confidence- in Australia or Timor-Leste. The building measures” enacted—includ- higher revenue figure would operate ing the termination of the Certain in the event that Timor-Leste does not Maritime Arrangements in the Timor achieve its goal of sending the pipeline Sea treaty, which purported to delay to the southern coast of Timor. maritime boundary determination for Despite these successes, which fifty years, and Timor-Leste’s cessation vindicated the East Timorese use of of a separate espionage case against the unclos conciliation process, chief Australia—Timor-Leste and Australia negotiator Gusmão remained unhappy jointly declared that they had reached at the failure to secure a pipeline to the an agreement on “central aspects” of East Timorese coast, a development a maritime-boundary determination in vision he had championed for years. late 2017 (Permanent Court of Arbi- Advancing the plan for downstream tration 2017). processing remained a key focus of the Once ratified by both parties, the government throughout 2018. Despite agreement, which was finally revealed this aspect of the issue remaining unre- on 6 March 2018 (Permanent Court of solved, the historic treaty marked the Arbitration 2018), will create perma- end of a key stumbling block in the nent maritime boundaries and revised Australia–Timor-Leste relationship, resource-sharing arrangements in the opening the way for a major resetting yet-to-be-developed Greater Sunrise of the countries’ troubled bilateral ties, oil and gas field. Timor-Leste secured and ministerial visits soon resumed— a median-line boundary in the Timor the first in five years. Gap, creating a permanent maritime­ Unlike the 2017 elections, par- boundary for the first time. The liamentary elections in May 2018 median-line boundary will place 100 delivered a decisive result. The amp, percent of the existing Joint Petroleum by now a coalition of cnrt, plp, and Development Area in Timor-Leste’s khunto, won 49.6 percent of the waters, where current treaties divided national vote, delivering thirty-four political reviews • melanesia 565 out of sixty-five seats and winning a tance, Falintil. The 2018 campaign narrow majority in its own right. In was frequently depicted as a contest Timor-Leste’s proportional system, between the military front and mem- where outright majorities are uncom- bers of the diplomatic front, who were mon, this was a strong vindication of outside the country during the occupa- the decision to combine the forces of tion, including Prime Minister Mari Gusmão’s cnrt with former Presi- Alkatiri and key diplomatic figure Jose dent Taur Matan Ruak’s plp and the Ramos-Horta, who had also thrown smaller, youth-focused khunto in a his weight behind the fretilin cam- formal preelection coalition. paign. A series of campaign attacks While the amp achieved a swing sought to diminish the contribution of of 3.1 percent on its collective 2017 those who struggled for independence results, the entry of a new, smaller in the international arena, emphasiz- coalition (the Democratic Develop- ing the greater suffering endured by ment Forum) saw the amp’s collective those within the territory during the tally of seats fall by one. fretilin occupation. received 34.2 percent of the national This division over resistance history vote and 23 seats, maintaining its lent an unpleasant air to a campaign 2017 seat tally. This represented a that was also marked by exchanges of substantial swing of 4.5 percent, the personal slurs between the major party first major swing to the party since leaders, including some outbursts of 2007, though it proved insufficient to anti-Muslim sentiment directed at overcome the formidable amp coali- fretilin leader Alkatiri, and frac- tion. The Democratic Party was also tious personal debates on Facebook. back in Parliament with 5 seats (down Civil society called for a new focus on from 7 in 2017), and the new Demo- policies rather than personalities and cratic Development Forum coalition for parties to refrain from personal secured 3: though this smaller alliance attacks (Fundasaun Mahein 2018). soon split, with one of its members of Election Day passed without major Parliament clearly more favorable to incident, though comments from the fretilin opposition. This left the Gusmão that he “would not accept the government with a simple majority in result if it was not fair” were unhelp- its own right—but without the two- ful and built on a series of complaints thirds supermajority necessary for the from the amp during the campaign reversal of certain presidential vetoes. that were not backed by strong evi- The 2018 campaign was marked by dence. In its preliminary report, the a high level of polarization and by the largest observer mission referred to resurgence of the “history wars,” an the “injudicious and inappropriate ongoing clash between the two wings language of some political representa- of the East Timorese resistance during tives” and noted that allegations about the Indonesian occupation. The amp the election process are “serious in reunited Gusmão and his cnrt with character and, if made, need to be sup- Ruak’s plp, which had been at logger- ported by evidence” (atleom 2018). heads during the 2017 election. Both After the ballot, fretilin raised simi- were former leaders of the armed resis- lar concerns over the vote in Oecusse, 566 the contemporary pacific • 31:2 (2019) the only district in which its vote had ministerial nominees were dominated dropped in 2018, again without imme- by cnrt figures, while 2 were from diately offering compelling evidence. khunto. This district-level outcome was par- Though Gusmão was not among ticularly interesting because fretilin­ the refused nominees, the cnrt leader had been in charge of the Special boycotted the swearing-in ceremony Zones of Social Market Economy in protest, accusing the president of project, a major national development “unprecedented, unusual, seditious project in the East Timorese enclave and politicized” behavior by not of Oecusse. Despite these complaints, swearing in the full suite of govern- Timor-Leste’s two electoral agencies ment members (Lusa 2018). Another again did an excellent job, even with ministerial nominee boycotted the the pressure of the early election cam- ceremony, but not all cnrt ministers paign and limited budgets. did. President Guterres stated that he Despite leading a smaller party, had asked the prime minister to review Ruak was appointed prime minister the names in light of the evidence pro- in June, with the cnrt leader Gusmão vided, arguing that such nominations proposed as minister of state advising might undermine public faith in the the prime minister. The decisive result government. Gusmão responded by of the May elections and the amp’s releasing a statement signed by a judge clear majority looked set to provide that nine of the impugned nominees for stability and a much-needed had no current charges pending and ­budget. that he agreed to replace the two nom- However, the first experience of inees facing current court processes. genuine cohabitation in Timor-Leste’s This was a reasonable step, which dis- semi-presidential system between tinguished between actual and poten- a fretilin president and an amp tial charges, but it had the unfortunate ­government disrupted these early political side effect of adding detail projections, revealing the extent of to the nature of accusations against presidential power in Timor-Leste’s the would-be ministers, though some system and causing problems for the involved matters unrelated to corrup- governing coalition. tion. President Guterres also justified Tensions first came to a head in his position as one that protects the June when President Guterres refused judicial system by preventing ministe- the appointment of 12 of the 41 rial immunity for impugned nominees. proposed ministers in the new gov- The government countered that the ernment, citing judicial inquiries into presumption of innocence and the misconduct or “poor moral standing,” separation of powers were being put including two current court processes at risk. Soon after, Parliament denied (Belo 2018). The issue with the sole the president permission to travel on nominee associated with the plp was a scheduled state visit to Portugal. a strictly bureaucratic matter involv- While it was argued that business of ing resignation from the military and state made the trip untimely, the denial was soon resolved, reducing the list was another clear sign of cohabita- to 11. The remainder of the refused tion tensions. Seizing on the politics of political reviews • melanesia 567 the moment, fretilin reintroduced a ment had important wins. Its budget 2014 anti-corruption bill into Parlia- for the remainder of 2018 passed ment on 10 July. through Parliament in early Septem- The cnrt then threatened action ber, ending the recurrent monthly against the president if he did not reserve budget system (based on the install the ministers within ten days, previous year’s budget), which had but with Timor-Leste’s equivalent of contributed to a flattening of the impeachment also requiring a two- economy. The Court of Appeal also thirds vote in Parliament, it remained found the government’s withdrawal unclear how this would be done. No from the petroleum fund—which such action was ultimately taken. In kicked off this process—to be consti- a further development, the president tutional. The amp’s return to the new refused to immediately pass emergency school curriculum, which prioritizes budget measures that would draw Tetun literacy in the early school years us$140 million from the petroleum and introduces Portuguese language fund to top up state coffers for July later, was also broadly welcomed after and August, referring the measure to the move had been briefly reversed the Court of Appeal to test its consti- by the fretilin government. This tutionality. The government argued approach accords more strongly with that this measure was necessary to the educational evidence, which sug- address the slowdown in economy as gests that this staging is more likely a result of emergency budget mea- to produce improved fluency in both sures in place since early 2017, and official languages. the court ultimately approved the The government also faced renewed ­withdrawal. student protests over Parliament By the end of the year, the institu­ members’ new Prado cars in late 2018, tional standoff, primarily ­involving with such vehicles being a common cnrt members, was in its sixth focus of grassroots concern over waste month. Some former ministers were and inequality. Associated protests instead working as senior advisers, by the University Students Movement and Parliament had responded to the were met with heavy-handed policing president’s action by repeatedly deny- from a force that was already under ing his travel requests. The standoff scrutiny after an off-duty policeman gave the new government a curiously killed three and wounded others at a dual character. On the one hand, its party (Davidson 2018). The incident normal business was being carried highlighted the lax enforcement of out by an incomplete ministry over- rules prohibiting off-duty gun posses- represented by figures from the minor sion, which must be addressed. alliance parties, plp and khunto. On Above all, 2018 saw the amp gov- the other, a powerful group of cnrt ernment focus its energies on advanc- figures without formal portfolios, led ing Gusmão’s ambitious plan to bring by Gusmão, was primarily concerned oil and gas from the Greater Sunrise with advancing the Greater Sunrise field to Timor for downstream pro- project. cessing. The government believes this Despite this standoff, the govern- will maximize the economic and social 568 the contemporary pacific • 31:2 (2019) returns from the project above and that move in December, though beyond the country’s increased share Guterres’s justification focused pri- of Greater Sunrise revenues, which has marily on the financial sustainability risen from 50 percent to at least 70 of the nation’s petroleum fund, and percent since the deal was struck with he also objected to some retrospec- Australia. Planned major infrastruc- tive measures in the legislation. Some ture projects along the south coast to local nongovernmental organizations advance this vision, collectively known believe that the 20 percent limit was as Tasi Mane, are still at an early unenforceable anyway and that the stage. recent changes to the law were instead As such, despite the commitment of aimed at reducing the capacity of the plp to greater spending on educa- Timor-Leste’s Audit Court to review tion and health, the 2018 budget was large contracts—an accusation the still largely focused on infrastructure government denies (La‘o Hamutuk spending. This emphasis on resource 2018b). The Audit Court has certainly processing was also reflected in the proved the most active and able of government’s initially proposed the East Timorese watchdogs, previ- us$2.1 billion budget for 2019, passed ously overturning a contested us$720 by Parliament in December. More million contract for constructing the than a third of the 2019 budget was supply base in Suai. devoted to Tasi Mane infrastructure Parliament successfully reversed the works and joint-venture acquisition veto on 10 January 2019, as fretilin­ costs. Key items included the proposed staged a parliamentary walkout, purchase of Conoco Philips’s stake allowing the government a rare in the Greater Sunrise joint venture opportunity to assemble two-thirds of for us$350 million, along with the those present (and rendering moot the buyout of Shell Australia’s share for question of whether a supermajority us$300 million. If these purchases are was in fact needed for this legislation). ultimately approved, Timor-Leste will Opposition members of Parliament have a 56 percent stake in the joint later referred the reaffirmed Law on venture. The plan is controversial in Petroleum Activities legislation to the sectors of East Timorese civil society, Court of Appeal to test its constitu- with some organizations worried that tionality. the costs will outweigh the benefits In the meantime, President Guterres (La‘o Hamutuk 2018b). But the vetoed the 2019 budget on 23 government predicts greatly increased January, arguing that it was gravely returns and appears to be having some unsustainable and drew too heavily success in stirring nationalist support on the principal reserves of Timor- for its vision of increased resource Leste’s sovereign wealth fund. This sovereignty. action potentially placed the Greater As a preliminary step, the govern- Sunrise joint-venture payments in ment made changes to the Law on jeopardy, as fretilin could deny the Petroleum Activities to lift the legis- government the parliamentary super­ lated 20 percent limit on state owner- majority needed to reverse the budget ship. A presidential veto ­challenged veto. This potential for a presidential political reviews • melanesia 569 block to a major government agenda 80 percent of which would be sourced therefore left a central tension brew- from joint-venture partners, loans, or ing in the political system. However, other financing. Claimed returns from this tension was soon resolved, at least the project under government model- for the short term, when Parliament ing are in the order of us$28 billion to revised the budget down to us$1.4 us$54 billion above the return from billion on 31 January by removing the a simple revenue split, depending on us$650 million joint-venture payment. capital and operational expenditures The government did this because it and oil and gas prices. East Timorese had become confident that it could use nongovernmental organizations coun- the petroleum fund itself as the source tered that the government’s investment of the payment, having altered the could instead cost up to us$14 billion fund’s investment rules in the recent and that price assumptions and exter- Law on Petroleum Activities amend- nal financing are uncertain. They also ments. Despite an appeal from opposi- worried that the project would rapidly tion ministers of Parliament, the Court deplete the petroleum fund, the inter- of Appeal found these changes to be est from which is intended to subsidize constitutional, and the us$650 million the annual budget into the future. was paid to Conoco Philips and Shell Where the majority funds for the on 16 April (La‘o Hamutuk 2019). massive Tasi Mane project would More generally, the politics of come from is now an even more this issue appeared to be traveling critical question. As nongovernmen- in the government’s favor, with all tal organizations have pointed out, parties offering in-principle back- becoming a joint-venture partner ing for a pipeline to Timor-Leste. would expose Timor-Leste to an fretilin­ maintained that it supports equivalent share of the massive capital the downstream processing vision but development costs. The government opposes alterations to petroleum-fund countered that the joint-venture governance and wants the cost-benefit partnership would also bring new analysis to be made public. Some income streams beyond the revenue nongovernmental organizations have split ­negotiated between the coun- strongly questioned the wisdom of tries, including extra tax revenue and the megaproject and fear that the returns on capital expenditure. These ­sovereign wealth fund of us$17 billion formed the basis of the government’s could be depleted even sooner than revenue projections. projected. The balance, they have While fretilin leader Alkatiri pointed out, dropped a record us$680 and President Guterres were notable million in October (La‘o Hamutuk absences from the presentation in 2019). December, the plan drew support from A presentation by Gusmão in Ramos-Horta (though he expressed December outlined the broad strokes concern over amending the Law on of the government’s financing plan for Petroleum Activities). He also tactfully the Tasi Mane project. He revealed urged talks among the government, government modeling that estimated the president, and the opposition. costs in the order of us$10.5 billion, While the president appeared to get 570 the contemporary pacific • 31:2 (2019) the best of the furor over ministerial their own development strategies and appointments, the government was recruit donor support on that basis having more success in framing the (g7+ 2018). oil and gas issue as one of national Beyond its bold forecast of greatly pride and resource sovereignty, which increased returns, the government’s complicated the terrain for critics of vision of resource sovereignty is also the Tasi Mane megaproject. a potent potential nationalist motif While the revised 2019 budget was to mobilize political support, includ- promulgated by the president on 7 ing for future election campaigns. February 2019, he remained openly ­Likewise, it may see longer-term critical of the relatively low expen- political benefits in providing jobs ditures on basic development indica- and training in Tasi Mane, even if tors. Here, the government had some projected returns from resources vulnerability, as the proposed 2019 projects are lower than anticipated. In budget outlined a modest increase of contrast to the civil-society focus on us$11 million in education spending, bottom-line costs to the economy and with health and agriculture spend- the petroleum fund, the calculus may ing remaining essentially static (La‘o not be a simple economic one for the Hamutuk 2018a), despite being government. declared budget priorities by the For Timor-Leste’s neighbors, the government. This suggests that the larger question concerned the likely plp has had relatively little success partners to fund the majority of the pushing its policy agenda within the project. The prospect of China’s coalition, despite holding the prime involvement has obviously raised great ministership. On the other hand, busi- concerns in Canberra. While there is ness groups remain deeply concerned no hard evidence of Chinese ­interest, about the economic impact of a return the question of how the government to the recurrent budget system, as will finance the remaining 80 per- the economy remains dependent on cent remains unclear. Notably, the government expenditures of oil and contract for a new digital television gas revenues (Lusa 2019). This factor network went to a Chinese company clearly placed additional pressure on in ­December (Telecom Paper 2018). the president to pass the budget. As 2018 drew to a close, political The wider politics of the East tensions were rising again in Dili. The Timorese government’s resource ongoing clash between a determined sovereignty vision are significant. government agenda and presidential The plan rejects the presumption veto powers suggested that a new that downstream processing is the election in 2019 cannot be ruled out. natural preserve of more developed For the government, the prospect of countries—a powerful argument winning one more seat and removing capable of recruiting strong nationalist fretilin­ ’s block on a parliamentary support. Gusmão already has a strong supermajority, weakening President track record in promoting interna- Guterres’s veto power, may prove tional organizations like the g7+ that appealing if the political standoffs call for developing countries to lead continue to affect the government. political reviews • melanesia 571

However, given the uncertainty that ber. http://gmntv.tl/en/politika/2018/12/ any new election would resolve the eis-pr-ramos-horta-rai-ida-nee-labele institutional standoff, a compromise -moris-ho-veta/ over ministerial appointments and La‘o Hamutuk. 2018a. Submission to ­dialogue between the parties might Committee C, rdtl National Parliament prove the real solution, something from La‘o Hamtuk about the Proposed former President Ramos-Horta, who General State Budget for 2019. 29 Novem- openly supported fretilin and the ber. http://www.laohamutuk.org/econ/ Democratic Party in 2018, was calling OGE19/LHSubPNOJE2019-29Nov18en for as the year ended (gmn tv 2018). .pdf michael leach ———. 2018b. Timor-Leste Buys into the Sunrise Oil and Gas Project. 30 ­October. https://www.laohamutuk.org/Oil/Sunrise/ References 18SunriseBuyout.htm ———. 2019. Timor-Leste Petroleum All websites accessed 18 April 2019. Fund/Fundu Petroliferu. Updated 28 Feb- atleom, Australia Timor-Leste Election ruary. http://www.laohamutuk.org/ Observer Mission. 2018. Australia Timor- Oil/PetFund/05PFIndex.htm#2018 Leste Election Observer Mission 2018 Report. 17 May. https://blogs.deakin.edu Leach, Michael. 2018. Timor-Leste: .au/deakin-speaking/2018/05/17/australia ­Architect of Its Own Sunrise. Inside Story, -timor-leste-election-observer-mission 8 March. https://insidestory.org.au/timor -2018-report/ -leste-architect-of-its-own-sunrise/ Belo, Jose. 2018. New Timor-Leste Govt Lusa. 2018. Xanana Gusmão Criticizes Beset with Problems as Gusmao Walks East Timor President for Government Away. La Croix International, 27 July. Appointment Criteria. Plataformamedia, https://international.la-croix.com/news/ 23 June. https://www.plataformamedia new-timor-leste-govt-beset-with-problems .com/en-uk/news/politics/interior/xanana -as-gusmao-walks-away/8158 -gusmao-criticizes-east-timor-president -for-government-appointment-criteria Davidson, Helen. 2018. Timor Leste: -9497191.html Drunk Police Officer’s Alleged ­Killing of Three Teenagers Sparks Protests. ———. 2019. East Timor: Foreign Busi- Guardian, 20 November. https://www nessmen Fear Economic Worsening in .theguardian.com/world/2018/nov/20/ Timor-Leste. Macau News Agency, timor-leste-drunk-police-officers-alleged 15 January. http://www.macaubusiness -killing-of-three-teenagers-sparks-protests .com/east-timor-foreign-businessmen-fear -economic-worsening-in-timor-leste/ Fundasaun Mahein. 2018. Policies over Personalities. 5 April. http://www Permanent Court of Arbitration. 2017. .fundasaunmahein.org/2018/04/05/ Timor-Leste and Australia Achieve policies-over-personalities/ ­Breakthrough in Maritime Boundary ­Conciliation Proceedings. Press release, g7+. 2018. Our Mission. http://g7plus 1 September. https://pcacases.com/web/ .org/our-mission/ sendAttach/2230 gmn tv. 2018. Eis pr Ramos-Horta: Rai ———. 2018. Timor-Leste and Australia ida ne’e labele moris ho veta. 19 Decem- Sign new Maritime Boundaries Treaty. 572 the contemporary pacific • 31:2 (2019)

Press release, 6 March. https://pcacases China. 7 December. https://www .com/web/sendAttach/2303 .telecompaper.com/news/timorese -government-greenlights-dtt-contract Telecom Paper. 2018. Timorese Govern­ -with-china--1272406 ment Greenlights dtt Contract with