RICE SHORTAGE: POLITICAL AND SECURITY IMPLICATIONS IN TIMOR

UNCLAS SECTION 01 OF 02 DILI 000061

SIPDIS

SENSITIVE

DEPT FOR EAP/MTS, DS, CA
USUN FOR RICHARD MCCURRY
SIPDIS

E.O. 12958: N/A
TAGS: PGOV EAGR EAID ASEC CASC KPKO TT
SUBJECT: RICE SHORTAGE: POLITICAL AND SECURITY IMPLICATIONS IN TIMOR

REF: A) DILI 27; B) DILI 45; C) DILI 46; D) DILI 49

DILI 00000061 001.2 OF 002



1. (U) Summary: A severe rice shortage in East Timor has caused
both a dramatic increase in the price of rice and in many cases
a total lack of availability at any cost. Although the UN has
emphasized that the rice shortage does not translate into an
overall food shortage, the immediate political and security
impacts are notable. Many Timorese see political manipulation
behind the shortage or, at the very least, a lack of political
will to address the situation in its early stages a month ago.
The issue is also feeding into the overall increase in security
concerns in Dili, as crowds of people claiming hunger have been
descending on the main World Food Program (WFP) and Ministry of
Labor warehouses demanding rice. In addition, a concerted
campaign of rock-throwing attacks against government vehicles
may be connected to anger regarding this issue. Government
officials have been requesting patience and announcing that
overseas rice purchases are on the way. In the interim the WFP
is loaning a large portion of its stock to the Government in
order to stabilize the market and distribution and resale on
wide scale is due to commence tomorrow (February 23). This,
along with rains and a delay or suspension of demonstration
plans by an opposition group appears to have resulted in some
reduction of security incidents today. However, the rice
situation has clearly injected an additional volatility into an
environment already characterized by the ongoing gang clashes,
policing challenges, and continued demonstration plans (see
reftels). Most observers believe that the recent spike in
tensions will be sustained through the presidential and
parliamentary elections during the next several months although
no one can predict how volatile the situation will become.
Embassy is continuing to closely monitor the security
environment and today issued an updated warden message to the
American community. The Embassy is also closely monitoring
access routes and neighborhoods of American residences,
facilities, and schools. End summary.


2. (U) Regional rice market developments, specifically a
dramatic reduction in exports from Vietnam combined with
increased imports by other nations, have resulted in greatly
reduced rice supply available on the market in East Timor. Other
domestic causes cited by observers include security issues
reducing port offloading hours, allegations of hording by some
distributors, and reports of some re-export of food aid and
other rice to West Timor in Indonesia. Market prices for rice
have as much as tripled and many stores have no stocks on the
shelves at all. At a briefing to the diplomatic community on
February 21, SRSG (Special Representative of the
Secretary-General) Atul Khare emphasized that there is not

SIPDIS
currently a food shortage, and street markets appear to remain
well stocked with produce, but most Timorese regard rice as a
basic necessity and a lack of rice as essentially a lack of
food.


3. (SBU) A large number of Timorese perceive political forces at
work behind the rice shortage, asserting that political actors
are using it to their own ends, i.e. by holding onto rice stocks
to use during elections or distributing rice only to political
allies. Such claims are purely speculative at this point, but
there is a widespread perception that there are large stocks of
rice in East Timor that are simply being withheld. Less
conspiracy-minded Timorese are still expressing anger at a
perceived lack of political will to address the issue. They note
that regional shortage issues have been on the Government's
agenda for the last month with no effective action taken. They
also point to the Government's Fiscal Year (FY) 2006-2007 fund
for food emergencies which has apparently not been tapped. Some
are are publicly asking why this $7.5 million fund resides with
the Ministry of Development, which reports to Deputy Prime
Minister and staunch Fretilin party member Estanislau da Silva,
rather than with the Ministry of Labor which reports to the
politically independent Deputy Prime Minister, Rui Araujo. (N.B.
The Ministry of Labor has been the lead ministry on humanitarian
relief.)


4. (U) Popular anger about the rice shortages is having an
immediate impact on Dili's security environment. Over the

DILI 00000061 002.2 OF 002


last few days, crowds of people in the range of several dozen to
several hundred have repeatedly appeared in the vicinity of the
main World Food Program (WFP) and Ministry of Labor warehouses
demanding access to rice. Following a successful rebuffing of
such a crowd on February 20, the crowd then proceeded to launch
a rock-throwing attack on a nearby government building, housing
the Ministry of Development among others, breaking a number of
windows. International Security Force (ISF) personnel have since
been guarding both warehouses, and no other such incidents have
occurred, but the situation remains volatile. In addition,
unknown actors have launched a concerted rock-throwing attack
campaign against government vehicles over the last 48 or so
hours, and there is widespread agreement that this is a direct
response to the rice issue. Some ISF and a number of UN police
vehicles have also been targeted, and several private Timorese
and foreign citizens have been caught in the crossfire. SRSG
Khare told diplomats that 17 UN vehicles were destroyed by
crowds February 21-22. The cars of several senior Timorese
officials have also been attacked. In the past two weeks, two
U.S. Embassy vehicles have been damaged by rock-throwing
incidents.


5. (U) In his February 21 briefing, SRSG Khare confirmed that
the WFP is loaning 300 metric tons of rice to the GOET in order
to sell directly to selected stores to help inject a new supply
and bring down prices. Khare reported that the WFP loan was
transferred to the Government on February 20. Today (February
22),GOET started some distribution of 224 tons of rice in Dili
to sell through cooperatives at officially set prices; wide
scale distribution is to commence tomorrow. In addition, WFP has
plans to bring in further supplies over the next weeks and both
Prime Minister Jose Ramos-Horta and Deputy Prime Minister da
Silva reported to the national media that rice purchases from
Australia, China and Thailand would be arriving over the next
two or three weeks, including one shipment of 1000 metric tons.


6. (U) The Movement for National Unity and Justice (MUNJ)
suspended demonstrations planned for today and are reportedly
holding discussions to decide whether to proceed with
demonstrations in the coming days. The demonstration suspension,
along with rains and the news that rice is on the way appears to
have brought about a reduction in incidents in Dili over the
last 24 hours.


7. (SBU) Comment: Despite this expected relief over the next
couple weeks, the current situation has clearly injected an
additional volatility into an environment already characterized
by the ongoing gang clashes, policing challenges, and continued
demonstration plans. The apparent response to the rice issue has
not been targeted towards private foreign citizens or diplomats
and the overall security environment remains as described in
recent reporting. However, some collateral impact from the
increased attacks on government officials will likely occur. In
light of this, as well as continued gang clashes and
demonstration plans, an updated warden message was sent to the
American community today. The Australian Embassy has issued a
similar updated warning to Australian citizens. Embassy Dili is
also closely monitoring access routes and neighborhoods of
American residences, facilities, and schools. While there was
some reduction in incidents today (January 23),Embassy Dili is
continuing to monitor the security situation closely. End
comment.
HARSHA