Global Policy Forum

By David Fickling

East Timor risks becoming "another Haiti" because of an attempt by Australia to exploit offshore oil and gas reserves between the two countries, according to its president, Xanana Gusmao. Mr Gusmao, who led East Timor's fight for independence from Indonesia, said the country would be at risk if Australian plans to exploit oil and gas fields claimed by Dili went ahead. "It makes the difference to our future," he said. "We would not like to be a failed state. Without all this we will be another Haiti, another Liberia, another Solomon Islands, and we do not want that," he told the Guardian.

An Australian Green party senator, Bob Brown, has accused Canberra of blackmail and robbery in its attempts to take control of two slices of the $30bn (£16.6bn) Timor Sea reserves, while demonstrators in Dili this week likened the claim to the 1975 Indonesian invasion of their country. Mr Gusmao said the reserves could make the difference between viability and failure for East Timor. "How can we prevent poverty if we don't have money? How can we reduce disease, how can we stabilise the country, how can we strengthen the democratic process, how can we strengthen tolerance ... if we don't have money?" he asked.

The president said international donors, including Britain, were putting pressure on his government to exploit the reserves but had not offered any help in the dispute with Canberra. With much of its infrastructure destroyed by violence that accompanied its 1999 independence referendum, East Timor is one of the poorest countries in the world. One in three people is dead by the age of 40, more than half of adults are illiterate, only one in three houses has electricity and one in five has drinking water.

The Timor Sea reserves, which lie in an area where the sea boundary between Australia and East Timor has never been settled, are its greatest hope for development. Dili claims its long-term tax revenues from the area would rise from $4bn to $12bn if an equitable boundary were drawn, but Australia has already started exploiting several disputed fields. Mr Brown, who will go to Dili next week to observe the next round of boundary negotiations, said Canberra's behaviour was immoral and short-sighted. "We have got the richest country in our region robbing the poorest," he said. "People in East Timor had thought that Australia was their only friend in the region, but now they discover that the arm we put around their back was picking their pockets."

Protests outside the Australian embassy in Dili this week drew nearly 1,000 demonstrators. Joí£o Sarmento, of the movement against the occupation of the Timor Sea, said popular feeling against the Australian government was running high. "People are thinking that it's a second invasion," he said. Under maritime law, sea boundaries should be drawn along the median line between countries - which would leave all the oil and gas in Dili's hands. In practice Australia is likely to earn more than twice as much from the reserves as East Timor. Such boundary disputes are normally decided by the international court of justice and the international tribunal on the law of the sea, but Australia left both groups two months before East Timor became independent in 2002. During the occupation Australia recognised Jakarta's sovereignty. In return it was granted the 1989 Timor Gap treaty which settled the status of the Timorese boundary until 1999.

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