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Castan Centre for Human Rights Law

Annual Lecture 2004

Dr José Ramos-Horta
Senior Minister and Minister for Foreign Affairs and Co-Operation for the Democratic Republic of East Timor

“East Timor: a United Nations Success Story in Nation Building”

I would like to give my sincere thanks to the Castan Centre for Human Rights Law for inviting me to deliver this Annual Lecture.  I first met Ron Castan some fifteen years ago. I do not recall whether it was in Alice Springs or Darwin, and I remember I was briefed about him before the meeting.  Someone had told me that I should meet him, as he was the chief lawyer of the famous Mabo case, and that he could for sure do something about the Timor Sea case.  Back then, and I don’t remember exactly when, we attempted with Ron as Counsel, through the Australian High Court, to invalidate the then Timor Gap Treaty signed between Australia and Indonesia. You might recall that Ron mounted the case.  It went to the High Court and the High Court took some unusually expeditious time in dismissing it, fortunately well before Ron asked me whether I had any property in Australia.  I was then a resident of Australia and one of the plaintiffs, along with Abel Guterres, formerly a resident in Melbourne, now our Consul General in Sydney. We were advised, not by Ron of course, that it was in our interests not to own property as if we lost the case we might have to pay court costs and if we didn’t have money to pay our property could be confiscated.  I didn’t have any property, but Abel actually had a house but luckily it was in his wife’s name, given the struggle we were involved in.  I hope he has no regrets. 

I was really shocked when the court case came and when I got to the last paragraph, it said the plaintiffs had to pay the costs.  Ever since I have been waiting to receive something from the Court demanding that I start paying the costs, but I think some very nice people in the High Court in Canberra decided to ignore that last sentence.  This is to illustrate not only the extraordinary heart, but also the extraordinary mind of Ron Castan and the generosity of people.  It is ironic that what we attempted back then, with the first conversation starting somewhere in the Alice or Darwin, where I met up with Ron when he was in his relentless pursuit of justice for the Indigenous people of this country, that some fifteen or twenty years later we are back in a whole different circumstance, with the world actually turned upside down.

Back then it was the cold war; the Soviet Union was still the Soviet Union; apartheid in South Africa was still in force, with no democracy to speak of in the Asian region.  South Korea was still under military dictatorship, and the only shining example of democracy was The Philippines following the peoples’ revolution that brought Corey Aquino to power.  If you look back and look at the world today, in spite of the bad news coming from many quarters, I can only conclude that the world has progressed enormously in the struggle, beginning first with an awareness and promotion of the whole notion of human rights, that only twenty years ago, was not something that was fashionable to talk about. 

The international human rights system did of course exist, but it was hardly enforceable, as there was then, no international mechanism to facilitate this. At this time the world was still more or less often paralysed by the strategic rivalries of the cold war.  Then the cold war ended.  New possibilities opened up.  The tremendous role that civil society is now playing, also unthinkable then, took off.  The role civil society played, not one of imposing or enforcing particulars agendas, but in conveying a message to the powers that be, that international affairs and decisions made that affected the lives of millions of people around the world, and even domestically, is no longer the prerogative or exclusive power of diplomats or a few politicians in any given country.  Increasingly civil society plays an important role in influencing and shaping debate and decisions, sometimes not immediately successful, but increasingly impossible to ignore.  The decision making process is no longer the exclusive domain of individuals locked up in smoke filled rooms, but often it is made in the streets from Seattle to Washington to Prague to Melbourne to Sydney to Bangkok and so on. 

These are extraordinary changes, all in less than a quarter of a century since I first met Ron Castan. 

I pay tribute to Monash for initiating and hosting the Castan Centre, to remember such an extraordinary person.  I also thank Mallesons for your example of what a prominent law firm can do to also advance the struggle for human rights and justice.  I have been to one of the Malleson family reunions.  I must confess when I was invited to your reunion I was actually excited because I had read some time ago the book, The Firm, by John Grisham and I was hoping I could see some similar excitement taking place.  The meeting was not what I expected, but actually it was a most loving and intellectually stimulating meeting, so I was a bit disappointed in this regard as compared to the excitement that was promised in the book The Firm, but was otherwise delighted.

Next week we will honour the life of yet another extraordinary individual Sergio Vieira de Mello.  I have the privilege, albeit a sad one, to attend.  In Geneva on the 19th of August the United Nations will hold a major tribute to Sergio and to all the United Nations staff who died in Baghdad on that day last year.  I will be in Sydney for a few hours stopover on my way back to Melbourne to address the Writers Festival on the 20th, and I will make a special stopover in Sydney on that day to join with the United Nations (UN) Information Centre in Sydney to pay tribute to Sergio de Mello. 

Ever since Sergio passed away I have been in touch with his mother Dona Gilda who is more than eighty years old.  She is a very strong little lady and she doesn’t like to travel.  A few months ago when I asked her to come to East Timor or to go to Lisbon in June for a tribute to Sergio, she said she had not travelled in years as she is afraid of travelling, but finally she is going to travel from Rio to Geneva to attend the memorial for her son Sergio. 

I have been on the phone with Sergio’s partner Carolina whom he met in East Timor.  She was with him in Baghdad.  She escaped only by a miracle as she was with Sergio in his office meeting with a delegation from the International Monetary Fund.  They left and she went to her office when a few minutes later the blast occurred. If she had stayed a little longer with Sergio she would have met the same tragic fate.  Carolina has been through a traumatic experience and is trying to recover. 

So in Geneva we will pay tribute to the extraordinary human being Sergio de Mello from Brazil, an international civil servant of the UN for over thirty years of his life.  I first met him many years ago before he took up the post of the Secretary General’s Special Representative of the United Nations to East Timor, to head up the United Nations Transitional Administration for East Timor (UNTAET).

This background has led me to the topic for this Annual Lecture, the United Nations experience in East Timor, specifically “East Timor: a United Nations Success Story in Nation Building”.  As you know at the end of August we will celebrate the 30th anniversary of the popular consultation that resulted in the current independent status of East Timor today.  To arrive at August 30, 1999 was a very long process, twenty-four years from when I first arrived in New York in early December 1975.  When I left my country, East Timor, December 4, 1975, Fretilin today’s governing party, had declared independence on the 28th November, Indonesia had not invaded, but was close to invading.  Three days after my departure, and by the time I had arrived in New York it had invaded. 

The Security Council convened a session requested by Portugal, as it was the then legal power of the Territory.  The Security Council adopted a unanimous Resolution on 22nd December calling on Indonesia to withdraw its forces from the Territory without delay, that was the wording, and calling on all States to respect the Territory and integrity of East Timor and the rights of the people of East Timor to self-determination.  That was 1975, and it was quite a feat that in the midst of the cold war, post Vietnam, East Timor still managed to secure a unanimous Resolution of the Security Council deploring the invasion, calling on the invading country to withdraw its forces.

This was also my first lesson, I would not say in international hypocrisy, but my first lesson in political perplexity.  The Security Council adopted a unanimous Resolution calling on Indonesia to withdraw its troops from the Territory, and what Indonesia did was simply ignore it and actually did the opposite.  They increased their military presence in East Timor and some of the countries that voted for the Resolution actually sold even more weapons to Indonesia that in turn enabled Indonesia to challenge the Security Council resolution regarding East Timor.

If I arrived in New York with absolute innocence and tremendous ideas and hope and illusions about the United Nation, maybe they were shattered.  They were however, not destroyed.  The following two years, from the end of 1975 to about 1977, 200,000 people in East Timor died from executions, straif killings or from starvation caused by the war and yet the Security Council did nothing to enforce its own Resolutions on that particular situation.  Explanations vary and each of them may be factual and valid, but nevertheless devastating.  The cold war powers were more concerned with their immediate interests or perceived real interests, the United States was far more pre-occupied with preventing further encroachment or expansion of communism in South East Asia following its humiliating retreat from Indo China, particularly Vietnam. 

The Soviet Union was far more pre-occupied in not antagonising a country such as Indonesia, which viewed China as its main enemy and not the Soviet Union, so for the Soviet Union it was far more important to maintain good relations with China, with Indonesia, therefore keeping a certain balance in its rivalry with China.  There were also other significant or minor players, each with their own agendas, their own interests, real or perceived.  The end result for East Timor and for many other communities throughout the past sixty years of the United Nations existence in international affairs was that they were sacrificed on the altar of pragmatism and reality politics, because of the cold war, because of the perceived interests and challenges of different countries, and a quarter of a million people died in my country. 

But then who would have thought it possible that such a small country, by then down to a population of 700,000, as 250,000 or so had already died, could one day become free and independent. 

I know I have related these stories and experiences a few times already but those of you who have heard it I hope you don’t yawn in boredom, as I notice some faces here, so loyal, who have known me for twenty-five years who are still courageous enough to come and sit and listen.  They are the ones who actually deserve a Nobel Peace prize because I am not equally generous and patient.  If I hear that Jean McLean is going to deliver a speech I would probably say ‘God I have heard her ten times already’ so Jean, Helen Hill and so many others of you are more deserving of the Nobel Peace prize than me.  I know that you are going to bear with me for this fascinating story because it really struck me somewhere in 1990 or 1991 when I was in Switzerland.  Normally when I went there in those years I would live in a town called Nijon, I guarantee, I hope no Swiss citizens are in this room, there is no more boring town in the world than Nijon.  Compared with Nijon, Canberra is one of the most exciting towns in the universe.  I would drive every morning from Nijon to Geneva. 

At 8 o’clock sharp there was always a news broadcast from BBC London and there was this fascinating story of a Soviet cosmonaut who had gone into space some months earlier and on that morning he was preparing his space craft to return to mother earth.  One individual from Moscow, a technician or whoever, told him do not come back as your country no longer exists.  The Soviet Union had ceased to exist and I am not telling a false story, this actually happened.  The cosmonaut was named Captain Nikolai.  I don’t remember his surname.  I stopped the car because in the best circumstances I am not the best driver and with that excitement I thought best that I stop and listen to the story carefully.  The gentleman was in outer space and told don’t come back your country no longer exists, of course I think someone was joking with him from Moscow and they said it as an afterthought, ‘circle the earth a few more times until we figure out what to do with you’ because people in Moscow were confused.  They actually discussed who was going to foot the bill for his return because there was no real authority.  They then sorted it out and he came back to Kazakhstan, a different country. 

The empire had imploded in spite of the mighty army of the then Soviet Union, not a single shot was fired to prevent the break up of the empire and who would have thought it possible many years ago.  Some people and one called Zakharov often portrayed as a lunatic for trying to fight the mighty empire and yet the empire collapsed and freed the Baltic States, Central Eastern Europe and it set in motion the freedom of South Africa and the liberalisation and democratisation in Latin America and a wave of democracies, not perfect or imperfect, in many other parts of the world. 

That is when I thought ‘gosh is it possible also for East Timor to be free’ but it took another fifteen years since I sat on the side of the road and listened to that BBC broadcast about Captain Nikolai. 

On August 30 this year we celebrate the fifth anniversary of the results of the popular consultations.  So move from 1975 to 2004 and we can see what extraordinary changes have taken place and you begin to see the evolving role of the UN with regard to East Timor.  The 1975 Security Council resolution of 1975 on East Timor was not the first time that East Timor made it on the UN agenda.  It was actually in 1960/61 when the UN adopted the famous Resolution 1541 listing all Portuguese territories in Africa and Asia as non self-governing territories with the right to self-determination.  They were however dormant for most of the 60s and because Portugal failed to live up to the responsibilities as defined in those Resolutions people in Mozambique, Angola, Guinea-Bissau decided to take up arms.  By 1974 the Portuguese empire had collapsed and the departing Portuguese authorities transferred power to the national liberation movements that had established themselves in those territories, in Mozambique, Angola, Cape Verde, San Tome and Guinea-Bissau. 

East Timor was the exception.  The Portuguese tried to hold a referendum there, prepared for the democratisation of the referendum, but different problems emerged such as Indonesian interference, the inability of the East Timorese with wisdom, with intelligence, with maturity, to seize on the historical opportunity, to work with Portugal, to work with each other, to move towards independence.  Instead we had a brief civil war, there were quarrels, and Indonesia obviously was there from the very beginning undermining the process, but we were the ones who were also the foolish ones.  It is not good enough just to blame a particular neighbour adversary, you just have to be wiser, to be more mature in not falling into the trap of what you know to be your adversary’s game, but we did fall into that trap. 

So fast forward to 1999 and the Security Council is again dealing with East Timor, when finally after the ballot that you all know about, the took decisive action to intervene in East Timor under Chapter seven of the UN Charter.  This was unprecedented in the history of the UN, particularly in this region of the world, the Asia Pacific.  Never before, with the exceptional difference of the Security Council action on the Korean war. 

The Security Council acted on the Korean War because of the absence of the Soviet Union in the Security Council.  In protest the Soviet Union had abandoned the Security Council for one month and it was during that period that the United States managed to have a force supported by the Security Council to go to the Korean War.  To this day, some fifty years later, we still have this fiction of UN troops in Korea even though the Security Council has not actually mandated it since then. 

Here I will stop for a moment to pay tribute again to the extraordinary civil society movement that in 1999 made possible that swift unanimous Security Council decision to use force to intervene in East Timor to end violence.  I do not know whether without that civil society that went to the streets, to the Internet, by the hundreds of thousands in 1999, that the Security Council would have acted the way it did.  Never before had the Security Council acted in such an expeditious manner. The referendum took place August 30, the violence broke out September 3 or 4, and by September 20 the first Hercules plane from Australia began to role over the mountains of East Timor.  It caused an extraordinary kind of happiness and tears by thousands of people hiding up in the hills above Dili who no longer had hope that they would be alive.  That was an extraordinary moment and thanks to Australia’s leadership at the time, and thanks to the many hundreds of thousands of Australians from different walks of life, trade unions, politicians of all colours and persuasions, people of all social backgrounds, that inspired, compelled, the government of the day to take the leadership. 

But of course it was not only Australia or New Zealand, countries in the region, Malaysia, in Indonesia itself, the Philippines, Thailand, Japan, South Korea, in Europe, took to the streets and internet.  In Portugal half a million people lined the streets in Lisbon alone, thousands of them took buses and trains to Madrid to protest at the Indonesian Embassy in Madrid.  In South Africa, in poor countries like Guinea-Bissau, all over Africa, Latin America, it was a really extraordinary chain of human solidarity.  From all countries, all religions, the issue of East Timor was not viewed by anyone as a religious issue, that the poor East Timorese Catholics were being killed by some other people of another religion.  There were also Muslims going into the streets in Indonesia itself.  I think in the recent history of humanity there have been such few cases that brought so many people together. 

It ended the violence, but Sergio de Mello on arriving in East Timor, and all of us who returned from exile, found a country destroyed.  Seventy-five to eighty per cent of infrastructure was gone, about 300,000 people out of a population of less than 800,000 had been displaced, most of them in West Timor.  Some fled the violence but others were forced at gunpoint to leave.  There was no civil service to speak of, no judiciary, no hospitals, clinics, schools, and no economy.  The fields had been abandoned.  Cattle had been slaughtered.  East Timor a ghost country.  The Dili I returned to in December 1999 was a ghost town.  This is what Sergio de Mello received and the UN received. 

There were two urgent priorities, one the emergency humanitarian situation and the other rebuilding an administration.  All indications were that there was going to be a major humanitarian catastrophe.   Thousands of people could be dying in the next few days and weeks.  However the Security Council’s swift intervention combined with the extraordinary leadership and partnership involving NGOs, UN Agencies with full support from governments with logistics, like Australia in particular, prevented the death of thousands of people from starvation and a humanitarian catastrophe was averted. 

For several months the UN had to take care of, feeding the people, and finding them, or bringing them, in negotiation with the Indonesians, from West Timor back to East Timor.   There was no civil service, no infrastructure, nothing to speak of in Dili up to early 2000.

The second phase after the emergency was trying to put together an administration, bringing the Timorese into that administration, training them so that for the first time in so many years the East Timorese would be empowered to manage their own country.  There was never an independent judiciary, very few lawyers, many of them poorly trained in with basic law degrees from basic universities, were brought into East Timor’s fledgling judiciary.  Even if they had prior experience in the judiciary you would be compelled to ask ‘But where did they gain that experience?’ Where they did they gain that experience, in Indonesia, there is not a lot to be desired in the Indonesian judiciary experience, so it was really a no win situation and the ‘no experience’ maybe will be a blessing over the long term.

The UN could not, and no one could, in the short period of the UN transitional administration of two years, create out of nothing a strong independent judiciary.  As of May 2002 when we inherited self-government, we received a very incomplete legacy in this sector as we also received an incomplete legacy in the security forces and in the police service. 

The UN is a great institution but let us not have illusions that it is an institution of the late Mother Teresa’s.  With due respect to Mother Teresa, hers might be a great general entity but maybe not exactly great in managerial function, so even the UN was an institution of greatness such as Mother Teresa’s, it does not mean necessarily that they, this group of Mother Teresa’s from the UN could manage a country.  For the UN, nation building, running a whole country, such as it did in East Timor, was a first experience.  Never before had Sergio de Mello had government experience.  He worked all his life in humanitarian agencies.  He never worked in government.  He also had to learn and he learnt first by making mistakes, but one extraordinary quality of Sergio’s was that he knew how to listen; he knew how to create, how to generate trust and develop a partnership between the UN and the people. 

The people of East Timor, with their own modest leaders, modest in terms of knowledge and experience, were able to work together with the UN, because without leaders of the country concerned and the people taking their own responsibilities in ensuring conciliation, in ensuring peace and stability, the UN cannot perform miracles.  The UN can’t be effective where the people on the ground in a given situation do not have a wise leadership, strong national leadership who are able to give guidance to the people to co-operate with the UN and vice versa. 

Sergio would always rely on us even on many seemingly trivial things.  How many times I would receive phone calls from him ‘please Jose come and talk to the demonstrators’ as the people demonstrated for all manner of things.  They would demonstrate because they perceived the UN was deceiving them, or the UN failed to deliver whatever, they would not give them jobs.  There were many demonstrations.  Sometimes because of language barriers missing through the numerous translations, from Portuguese to Tatum, or English to Portuguese to Tatum.  I often stood near Sergio and listened to him speak in English or Portuguese, and then I heard the Tetum interpreter saying something slightly different with different nuances. The people would say well the UN promises this and they don’t deliver, but actually this was not what Sergio had said or the UN officials had said.  The message was lost in the translation or the interpreter thought he should have said it more positive and he did his own translation.  This happened a few times and I was witness to it. 

In New York at the UN they had a very skeleton mission to recruit people.  There were some wonderful people who came to East Timor, but some arrived without actually knowing what to do or where to go.   On one occasion when I visited Los Palos, in the far east of East Timor, I found there was some unhappiness with the people.  I found a lovely lady from California, who was there to manage the Los Palos District and I asked her ‘what did you do before’ and she replied ‘I worked in the Yosemite National Park’.  I actually visited Yosemite National Park many years ago and I said ‘well that is a wonderful park but obviously there are slightly different problems running Los Palos’.  So we had all of these problems. 

We had a poor young man, I think he was from Uganda, trained in agriculture, and they sent him to a remote village on the south coast, with which I am very familiar and where I met him.  He was totally lost, didn’t know what to do.  The UN simply put him there; no logistical support, no budget and the people were expecting immediate results.  Not that the young man was not qualified, if anything coming from Uganda or another developing country would be more than suitable, but I say this to highlight the human resource problems and still the recruitment process stayed in New York not in Dili.  Sergio de Mello in Dili did not do it, but those who did the recruitment understandably had to work around the clock.

Sergio arrived at the end of October.  No one and I mean UN Advisers wanted to go to East Timor by December.  You know why, because all these great humanitarian people except the NGOs and agencies.  They did not want to go before Christmas, as their attitude was people can wait and the work can wait, we will come in January.  So in December, January and February there was hardly any UN presence there.   We didn’t really begin to see the shape of a UN administration in Timor until maybe April, but even so I would say roughly eighty per cent were in the capital.  The East Timorese people were mostly marginalised in the decision making during that time.  It wasn’t until July that there was a dramatic decision by the UN, well dramatic as seen by them but long overdue for the Timorese, to set up a sort of transition cabinet.  Up until then full legislative, executive and even judicial power was in the hands of Sergio de Mello and his immediate entourage.  A charismatic person like Xanana Gusmao, a legitimate leader, and a few others were not part of that cabinet. 

It was only when some of our friends in Washington in the US Congress, real supporters of the UN, phoned the Secretary General and questioned the policies in East Timor that things began to change.  After traveling abroad, I arrived back in Timor at the end of May 2000, and I was told there was to be some changes.  These changes were ones we Timorese had proposed to the UN way back in October 1999 in a meeting in Darwin with the UN officials.  We had advised that there should be a power sharing arrangement from the very beginning, with the Timorese and the UN.  I am not saying this in criticism, but to tell the story of the UN in nation building.  The UN really was confronted with some dilemmas, and it was our view that they should bring in the shared decision making process at that very early stage. Sergio did already know Xanana Gusmao, Mari Alkatiri, and myself. 

In retrospect I still don’t know whether it was good or not, that we didn’t share in the leadership from the beginning, as opportunistically it is maybe better that we didn’t because it was Sergio and the UN who took all the blame for anything that went wrong until June/July 2000, when Sergio finally announced the mixed cabinet and said characteristically, ‘Well now we are all going to be in the punching bag’. 

Slowly the UN improved, consolidated its presence in the country, organised elections, civic education, and we went to a constitutional assembly and finally to presidential elections.  Two years later Sergio departed, he handed over to us, and I would say a success story, not one hundred per cent because nation building is not in one year or two years. 

Way back in New York in September 1999 I was arguing with a senior UN official in charge of the pre-planning for Timor that we would need a minimum of five years of strong UN engagement.  He said impossible, the most we can get the Security Council to agree with is two years, so that was what we believed it to be, but then we managed to persuade the Security Council after that to create a successful mission called UNMISET, to act as a support team for the next two years from 2002 to 2004.  Its mission was to provide back-up support in most sectors particularly the Ministry of Finance, Treasury, the security sector, police, defence forces and judiciary and so on. 

Equally as important, as the support to these vital sectors, is the mere presence of the UN in East Timor has been an important psychological political factor to give breathing space and room for the government in its very first few months of managing the country as an independent country.  When Sergio finally left May 21, 2002 I was sitting in my office, and I felt lonely.  That was the first time I felt the weight of the responsibilities.  Before that we got used to the UN presence, to Sergio’s reassuring presence.  It was daunting.  This was real.  East Timor was really independent.  I wished Sergio had stayed longer.  It was a real concern imbued with anxiety and fear, as the UN became a sort of godfather and godmother to our country. 

Two years after UNMISET we still felt the need for a one-year extension, and up to May 2005, it becomes five years.  One Security Council member in New York who recalled my conversation in New York said ‘Jose you once again got away with what you wanted, don’t try for another extension.’  He didn’t trust me and he said ‘Are you going to ask for another extension after 2005?’ I didn’t answer and he said, ‘Jose I guarantee you we will not support it this time’, to which I replied ‘We will see.’ 

I hope by May 2005 that we will have consolidated what was fragile before, our police force.  We have had problems with the training of our police force, to a large degree borne out of one of the ridiculous policies that the UN has.  For the UN you have to have all nationalities more or less equally represented in proportion so if you have a police force to be trained you can’t have only Australians training the police force, you can’t have only New Zealanders or Norway, you have to bring in some thirty nationalities.  Well I exaggerate a bit but to demonstrate some of our people salute with their right hand and some with their left hand.  It is ridiculous. 

The civil service, who would want to assign the responsibility of training the civil service, to a particular country, and it is common sense to find the individual people or countries with more experience, with a credible civil service, but the UN does not operate this way.  Singapore would be one, Malaysia another, along with Australia and New Zealand.  Well I don’t mention the names of some countries that came there to train our civil service.  This is just to illustrate some of the difficulties, but of course this has now been corrected.  The UN did realize that to train the police force you have to bring in those who really understand and have experience in what the role of a police force in a modern democratic country is. 

We also have serious problems in the judiciary, no shortcuts there, and the lack of judges.  I don’t wish to say anything negative about our judges, they are very sensitive and understandably so, but the fact is there are allegations of our judges having extremely low productivity.  We hear that in Portugal a judge handles some 800 cases a month, in East Timor something like two or three cases per month, either because of a lack of enthusiasm in the workplace, or lack of experience, fear, and lack of self confidence, but that creates problems in dispensing justice and with the investors climate.  How can investors come to East Timor to create jobs, to address our problems of unemployment, if they don’t trust our judiciary? 

Overall we have made remarkable progress.  The country is largely peaceful, we travel around the country, which I have done in recent times, unannounced and un-programmed, and I was pleased to see the progress we have made.  So many more acres of land cultivated, thousands of new heads of cattle, buffalo, cows, chickens, pigs, goats, and I noticed many, many more people, and thousands of children going to schools than two years ago.  There is much more trade in the rural areas than two years ago, you see many areas that were empty of any trade, now building markets.  I was pleasantly surprised to find near the border area two or three weeks ago on an unannounced trip on my own to see real quality housing emerging and I asked where the money came from for this housing.  More than $40m had been loaned by the Portuguese bank based in East Timor to thousands of East Timorese.  According to the Portuguese Bank Manager the repayment rate is better than in********** Portugal itself.  Savings in Timor is more than $100,000m in two years, from of course businesses to individuals, and the government begins to have a significant surplus, so much so that the UN told me the other day that my government was too conservative and that it should be spending the money, but the government does not wish to spend money for the sake of it.  We need to improve, to strengthen our implementation capacity.  Last but not least I think we have gone well beyond my allotted forty minutes.  I get carried away and forget the time.

I will share with you the conversation I had the other day with Alexander Downer.  There has been maybe some over optimistic reporting in the media or maybe I was the one who was over optimistic, or maybe Alexander Downer was over optimistic, but all I can say is yes we have reached an agreement whereby the two sides would meet again in intense negotiations starting hopefully before the end of this month maybe, or early September, to work out the fine details of a comprehensive agreement encompassing the breadth of the region from Greater Sunrise to other areas excepting the Bayu-Undan, to provide for a more fair, just and equitable share of the resources.  Neither side has said that we are backing down on our sovereign claims.  We have been on a sort of legal collision course, and we will reach that point of collision if we pursue the same strategy.  The Australian side, if you listen to Alexander Downer and his lawyers, seem to be fully confident that Australia’s legal claims on the Continental Shelf as the cornerstone, the foundation of its maritime boundary, is unassailable under international law.  If you listen to our lawyers they say exactly the opposite, meaning under international law our position claiming a median line between the two sovereign states is unassailable.  I believe our friends in Mallesons are familiar with the fact that lawyers can create arguments where they might not actually exist.  We decided that we better focus on something that is immediate, that would do justice to the people of East Timor and that would be fair to Australia, political leaders, diplomats, exist for that, and that is to find creative solutions to get us out of this seemingly intractable collision.  A solution that would be beneficial to the overall relationship between Timor and Australia, that would be beneficial to East Timor in particular, that our people, our leaders, President Gusmao, Prime Minister Alkatiri, can credibly sell to our parliament and the people, saying this is a really fair deal for us.

I thank you ladies and gentlemen.

God bless you.

José Ramos-Horta