Global Policy Forum

By Reese Erlich

In the shadow of the newly refurbished UN headquarters, Cipriano de Deus is unemployed but trying to survive, selling cigarettes and soft drinks to UN employees.

For 23 years Mr. de Deus worked in a nearby hotel. He fled to the hills last September after militias and elements of the Indonesian military torched Dili and massacred hundreds of civilians throughout East Timor. By the time Mr. de Deus had returned, there was an entirely new workforce at the hotel where he worked. "I make very little money now," says de Deus.

The United Nations Transitional Administration in East Timor (UNTAET) faces a difficult challenge to rebuild this devastated territory. After the Timorese voted 4 to 1 for independence from Indonesia last August, a campaign of terror and destruction forced an estimated 250,000 people to flee their homes. UNTAET was formed after the Indonesian withdrawal in order to facilitate the transition to Timorese independence in two to three years. While generally thankful for the international presence, many Timorese strongly criticize the UN for failing to alleviate urban unemployment estimated at 80 percent.

Sergio Vieira de Mello, UNTAET's chief administrator, says last year's destruction was horrific, and the UN has spent the past eight months just restoring electricity, water, port facilities, and other basic services. International agencies have cut red tape in order to speed reconstruction and provide some jobs for Timorese. "Never has the World Bank, the Asian Development Bank, the IMF, [or] the UN worked as fast as it has here," says Mr. Vieira de Mello. "Unfortunately, it is still too slow."

UNTAET and other international agencies are now funding a crash program to repair schools in time for classes to begin in October. The effort comes on the heels of a US Agency for International Development-sponsored Transitional Employment Program (TEP) in rural areas, designed to keep Timorese from flooding into the cities.

The $5.5 million budget for TEP has helped employ 12,000 Timorese for two weeks at a time, according to Cecilio Adorna, director of UNTAET's Department of Social Services. "The program has been a great success," he says.

But in the field, TEP looks less than stellar, according to local administrators and residents. Deflated basketballs sit in a box on the district administrator's porch in Alieu, a town 50 miles south of Dili. Timorese prefer soccer, so local TEP administrator Rainer Frauenfeld canceled plans to refurbish a basketball court. Similarly, rebuilding the town's open-air market would have drained most of the TEP funds allocated for the district, so he canceled that as well.

Mr. Frauenfeld says Dili administrators often don't adequately communicate with people in the field. "Consultation, that's the key thing, as opposed to receiving orders, which are not always intelligent," he says. But he emphasizes that desperately needed money has been pumped into the local economy, and even two weeks' wages for some families is helpful

While grateful for the international aid, Timorese now want to see more than make-work programs. "We'd like UNTAET to spend money on education and not just on clearing roadsides," says farmer Evaristo da Silva. "We're already very good at that."

International agencies are discussing plans for longer- term economic development and job creation so that East Timor can take its place in the emerging global economy. For the next three to four years, UNTAET and eventually the new Timorese government must help "the private sector recapitalize," says Sarah Cliff, the World Bank's chief in East Timor.

Such subsidies could help develop exports in coffee and seafood. In addition, UNTAET and Timorese leaders are negotiating with Australia to receive revenue from an existing oil and gas project in the Timor Gap, an arrangement previously set up between Indonesia and Australia.

Prospects for major foreign investment inside East Timor remain slim, however, until the country becomes independent and shows political stability. Timorese critics say many foreign entrepreneurs these days are just making quick profits providing services to international staff. Dili currently boasts 53 restaurants and even a catamaran cruise, affordable only to the international community.

Cipriano de Deus says he sees little benefit so far from the influx of foreign businesspeople. Noting the huge number of Timorese who are out of work.