Mzansi Afrika

From Johannesburg South Africa, a window on the world

Wednesday, May 26, 2004

On Australia and East Timor

Another example of the "benefits" of globalisation and empire.

Sapa-AFP reports: East Timor is at risk of becoming a failed state, hampered by Australia's determination to maintain maritime boundaries giving it the lion's share of revenues from Timor Sea oil reserves, Oxfam warned Wednesday.

A new report by the aid group acknowledges Australia has been a generous donor to East Timor, but said Canberra has reaped 10 times more from East Timor than it has given the impoverished country since 1999.

The report, released to coincide with the second anniversary of East Timor's independence, highlighted the continuing plight of its people, with four in 10 below the poverty line, more than half illiterate and a high infant mortality rate.

But Australia, it said, was earning over 1.0 million dollars (700,000 US) a day from oil and gas in a disputed area of the Timor Sea much closer to East Timor than to Australia. "Australia has received nearly 10 times as much revenue from Timor Sea oil and gas than it has provided in aid to East Timor since 1999," Oxfam said.

Under a temporary treaty signed with East Timor, Australia has access to two-thirds of 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.

The boundary has been the centre of a protracted dispute between East Timor and its giant neighbour, with energy deposits worth an estimated 30 billion dollars (21 billion US) in royalties at stake.

Australia insists the border should be its continental shelf which in some places is just 150 kilometres (94 miles) from East Timor's coast, but Dili says the border should be in the middle of the 600 kilometres (375 miles) of sea between the countries, which would give it 90 percent of oil reserves.

"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," said Oxfam Community Aid Abroad's director of public policy James Ensor. But Australia was not displaying good faith in its negotiations with its neighbour, he said.

Australia had withdrawn its adherence to the International Court of Justice and International Treaty of the Law of the Sea, denying East Timor's right to independent, third-party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.

The report said Australia received enormous international recognition for its role in leading the UN-backed force that ended a bloody rampage by Jakarta-backed militia in 1999 and through being a major donor.

"However, the unfolding tensions over the Timor Sea that stand to push East Timor to the brink of becoming a failed state through no fault of its own ... tarnish the current Australian government's strongest foreign policy achievement supporting the fledgling country over the past five years," it added.

While Australia was required to show restraint in exploiting oil and gas reserves in areas of overlapping claims, it continues to issue unilateral exploration licenses and receive revenues from some oil fields within the areas.

Facing a budget deficit of 30 million US dollars for the next four years, East Timor is heavily reliant on foreign aid, which Oxfam said is set to rapidly decline over coming years.

"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".

According to the CIA Factbook : "The country faces great challenges in continuing the rebuilding of infrastructure and the strengthening of the infant civil administration. One promising long-term project is the planned development of oil resources in nearby waters." So much for all that oil revenue.


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