Biswas: Deputy Prime Minister, what
is your assessment of the current
economic situation in East Timor
and the outlook for the year ahead?
Guterres: In 2008, East Timor achieved
GDP growth of 12.2 percent, followed in
2009 by 12.3 percent growth. We believe
that with the current economic policies
East Timor is doing very well. And we hope
to maintain this growth for years to come and we are saying this because of a specific
plan announced by the prime minister a
few months ago.
Our intention is to give a high priority
to key infrastructure, such as roads and
housing for the communities. The currency
of east Timor is driven by the proceeds
from oil and gas, about $100 million a
month. East Timor is a small country with
about 1.1 million people with oil revenues
of about $1 billion a year. We have created a petroleum fund that the government can
only access through parliament and the aim
of this petroleum fund is to make some of
these profits available for the next generation.
We are sending our students to the
Philippines, Indonesia, Malaysia and some
are in China. We also have sent around 700
medical students to Cuba and next year
around 410 will return to East Timor. We
are interested in the well-being of the people Social services will help and are important
for East Timor.
We have created a pension system for
80,000 people aged 60 years old and up.
They receive a payment of $30 a month, a
method to improve conditions for the older
generation and still draw on their reservoir
of knowledge. We believe that when social
problems arise, we have a population and
social system that can handle them.
Biswas: You said how important the
oil and gas revenues were. What is the
outlook over the next few years for the
future growth of oil and gas revenues?
Guterres: What we are doing is to invest
the money that we have in basic infrastructure
like roads, water, transportation, ports.
These are basic investments for us. Our
country is very beautiful and mountainous
and we are located next to one of the major
tourist centers -Bali- that many people
have visited. People might be interested in
visiting another place such as East Timor,
which is close to a key source of tourism
demand, namely Australia. Many tourists
come from Australia and Japan, and in
future the Indians and Chinese will increasingly
be tourism growth markets. It is
important to develop our tourism industry
and we have conditions for it and it is important
to invest in one of our major ports.
We are also close to the Philippines.
Biswas: What about the domestic education
system? Does every one have
access to primary education?
Guterres: Yes, according to our constitution,
education is free at the secondary
level and even at the higher levels. But the
question is here we do not have the educational
infrastructure and the capacity. We
have been sending out our young people to
build our capacity, but it will take time. It is
important for us to have our young people
learning in different parts of Asia, but it is
most important for them to understand the
region they are part of. They are in Malaysia,
Indonesia and the Philippines, which
will help our preparation for joining Asean.
Roy: it’s been a long time in the air
about joining Asean. When do you
think this will happen?
Guterres: We are preparing for 2012.
Roy: With indonesia becoming the
Asean chairman in january 2011, do
you think that will help?
Guterres: Indonesia has already said they
support us 100 percent. We haven’t met any
Asean members who have said no. We have some good advisers from Asean to prepare
Roy: When you said prepare, what do
Guterres: You have many meetings to attend
and laws that we have to introduce.
If you are part of Asean you have to adapt
your laws to Asean. There is no geographical
Biswas: You are geographically part of
Guterres: So we are very happy about
Asean. We hope this will be positive for
us and East Timor as well. To give foreign
investors an opportunity to come to East
Timor and invest. We have not only oil and
gas in mind, but also mining.
Biswas: What are the prospects for
Guterres: We have manganese and gold
but we have not yet explored these reserves.
But right now, we don’t have to
rush. For oil and gas, we have developed
just one block, and one block has been
tested by an Australian company and the
pipeline could go through East Timor. The
Australians already have one pipeline and
we believe one pipeline could go through
East Timor. The situation is that East Timor
and the Australian companies are discussing
this and we hope the outcome is a way
that would help East Timor.
Biswas: What would be the impact if
this agreement was reached?
Guterres: It means many millions of
dollars for the country and we have also
opened another new block. Reliance of
India is there and ENI of Italy is there ,
so many oil companies are already there
in East Timor, like Phillips, but the most
important thing we have to manage these
resources very well by investing in the future
in a responsible way and not expand
it in a process that doesn’t help the people.
In the three years since 2007, according
to a World Bank report, we have reduced
poverty by 90 percent because of the government policies we have implemented. We hope to continue.
You can’t develop your country if you don’t take care of your own people. With the direction and goal in which we are traveling, there is a general consensus that we have to do more for our population.
One important priority is that we have to develop our agricultural sector. Since the food crisis of two years ago, food now is a vital commodity. Rice is very specific to our people. We have been working with the Chinese, the Australians and the Thais.
Roy: Are you importing rice at this moment?
Guterres: We are importing rice from Vietnam.
During the crisis we imported it from Vietnam and Thailand.
Roy: You have seen the Asean report on dependency. When do you think you will get out of this dependency?
Guterres: In less than 10 years time, we can achieve sufficiency in rice production. We have land, we have water. We need to invest properly and increase the fertility to help farmers plant.
Biswas: Getting back to oil. If Sunrise happens, when do you think these the project will begin operations?
Guterres: If there was a decision today, maybe in 2 years from now.
Biswas: You mentioned $100 million per month in existing oil revenues. That revenue is from one block. What would the increase be if Sunrise happens?
Guterres: The profit might be $70 million. For us it is important that we use the profit well and right now, with the resources coming
from one block, we have sufficient revenue
to finance our budget. Our budget is 100 percent domestic and we don’t depend on anyone else and we don’t have any debt. And I think that these days it is economically
quite unique not to have any debt.
Actually, you will likely become
a creditor nation if the Sunrise project comes in.
Guterres: Yes, right now we already have around $7 billion invested in U.S. treasury bonds