Identifier
Created
Classification
Origin
08DILI262
2008-10-09 11:00:00
CONFIDENTIAL
Embassy Dili
Cable title:  

PM GUSMAO ON ECONOMIC POLICY AND SECURITY SECTOR REFORM

Tags:  ECON MARR MASS EAID MCC TT PREL OTRA PGOV MCAP 
pdf how-to read a cable
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P R 091100Z OCT 08
FM AMEMBASSY DILI
TO RUEHC/SECSTATE WASHDC PRIORITY 4112
INFO RHMFISS/CCGDFOURTEEN HONOLULU HI
RHHMHAA/COMPACFLT PEARL HARBOR HI
RHHMUNA/HQ USPACOM HONOLULU HI
RHMFISS/JOINT STAFF WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUEHKO/AMEMBASSY TOKYO 0893
RUEHBJ/AMEMBASSY BEIJING 0088
RHMFISS/USDAO CANBERRA ACT AS
RUEHDT/AMEMBASSY DILI 3595
C O N F I D E N T I A L SECTION 01 OF 02 DILI 000262 

SIPDIS

MCC FOR VP HEWKO, EAP/MTS

E.O. 12958: DECL: 10/9/2018
TAGS: ECON MARR MASS EAID MCC TT PREL OTRA PGOV MCAP
SUBJECT: PM GUSMAO ON ECONOMIC POLICY AND SECURITY SECTOR REFORM

CLASSIFIED BY: Major Ron Sargent, US Defense Representative, US
Embassy, Dili, East Timor, Department of Defense.
REASON: 1.4 (b),(d)



CLASSIFIED BY: Major Ron Sargent, US Defense Representative, US
Embassy, Dili, East Timor, Department of Defense.
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 02 DILI 000262

SIPDIS

MCC FOR VP HEWKO, EAP/MTS

E.O. 12958: DECL: 10/9/2018
TAGS: ECON MARR MASS EAID MCC TT PREL OTRA PGOV MCAP
SUBJECT: PM GUSMAO ON ECONOMIC POLICY AND SECURITY SECTOR REFORM

CLASSIFIED BY: Major Ron Sargent, US Defense Representative, US
Embassy, Dili, East Timor, Department of Defense.
REASON: 1.4 (b),(d)



CLASSIFIED BY: Major Ron Sargent, US Defense Representative, US
Embassy, Dili, East Timor, Department of Defense.
REASON: 1.4 (b),(d)




1. (C) Summary. In an extended meeting with the Ambassador on
October 8, PM Gusmao shared the economic policy woes his
government has faced in 2008 and prescriptions for 2009, his
plan to appoint a very senior Timorese politician as a second
Vice Prime Minister in charge of improving government services,
and his intention to become more active in his duties as the
Minister of Defense and Security. He also offered views on
Portugal's role in Timor, the story behind the purchase of two
Chinese patrol boats earlier in the year, and his desire to
reform the Timor-Leste security sector. Regarding the police
and the military, he said he needed time to develop his
priorities (through the end of 2008),and expressed hope for
U.S. support once implementation begins in 2009. In particular,
he welcomed the possibility of a U.S. organized or facilitated
donor conference in the area of maritime security perhaps in the
March 2009 timeframe. End summary.




2. (C) Prime Minister Xanana Gusmao met with the Ambassador
and ODC Chief on October 8 to discuss the recently concluded
National Security Policy Development Workshop, hosted by the
Asia Pacific Center for Security Studies (APCSS) in Honolulu on
September 8-12. Gusmao expressed his appreciation for American
cooperation, mentioned his government was in the process of
providing a report on the outcomes, and said that he would
consult with his security sector leadership regarding next steps

- particularly with regard to future United States support.
Additionally, Gusmao noted that he would like to conduct a
maritime security donor conference in either February or March
2009, and welcomes U.S. assistance in putting such an event
together. When the Ambassador mentioned that both U.S. Pacific
Fleet and U.S. Marine Forces Pacific would be conducting
assessments in mid-November 2008, the PM said these would be
well-timed and helpful in assisting his government determine how
to move forward on donor coordination. These comments are
consistent with remarks made to the Ambassador in a separate
meeting with Secretary of State for Defense Julio Tomas Pinto on
October 7 during which Pinto said "we (Timorese) simply do not
know how to conduct a donor conference, and U.S. assistance in
this regard would be appreciated." During a visit to Dili on
July 14-16, 2008, the Commander, U.S. Pacific Fleet, Admiral
Robert Willard also discussed with Pinto the potential benefits
of a donor conference to the coordinated development of Timor's
maritime security capabilities. Willard offered that the U.S.
could assist in organizing such an undertaking.




3. (C) Gusmao indicated that he has been greatly frustrated by
his government's lack of capacity during the course of 2008,
especially its still low rates of budget execution, but that he
had learned a great deal from the experience. He said that
during an AMP retreat he is hosting next weekend, he will
announce the elevation of PSD leader and Member of Parliament
Mario Carrascalao as a second Vice Prime Minister. Carrascalao
would focus on the government's ability to execute the budget,
improve its fiscal discipline, enhance government operations,
and oversee capital development and infrastructure projects.
Gusmao was pointed in his criticism of his ministers and
secretaries of state in charge of the police, justice, and
especially infrastructure in failing to execute their
appropriations. He is planning measures to punish ministries
with poor records of budget execution and reward those that have
performed well. A key future focus will be infrastructure, and
the PM emphasized his determination to realize significant
progress in 2009 in road construction and extending the power
distribution network. To ensure quality of implementation, he
said that Timor must outsource engineering and project
management. He also bemoaned a parallel weak capacity among
Timor's private sector firms to implement and complete projects.

DILI 00000262 002 OF 002







4. (C) Gusmao said that giving Carrascalao these economic
responsibilities would enable him - the PM - to focus more on
being the Minister of Defense and Security (a portfolio he
holds, but acknowledges he has not committed much time to except
in responding to the events following the February 11
assassination attempts) and hasten steps needed to reform
Timor-Leste's security institutions. Gusmao also expressed
concern about the inability of his government to adequately
liaise and coordinate with President Jose Ramos-Horta's Security
Sector Reform and Development team, headed up by ex-Defense
Minister Roque Rodrigues. He expressed confidence that once he
is able to focus more on security sector matters, he would take
on the task of reforming the police and military as top
priorities.




5. (C) The PM noted that reform of the National Police (PNTL),
would be an especially daunting task due to the institution's
considerable weaknesses. He cited the recent experience of
Minister of Justice Lucia Lobato, who organized training on
Timor's constitution and law for the PNTL, and discovered that
85% of serving officers lack even a basic understanding of the
country's laws. He described the current police commander as a
"weak leader", discussed the problems associated with the
selection of a possible successor, that this process was being
was made more difficult by lingering East-West ethnic tensions
within the force, and ongoing "political manipulation" of key
members of the police. Gusmao also said that President
Ramos-Horta favors assigning someone from outside PNTL's ranks
to the post - something the PM clearly indicated he is not in
favor of.




6. (C) In a remarkable aside on Portugal's involvement in
Timor-Leste's security sector, Gusmao said Lisbon was "neither
an obstacle to support from other countries, nor fundamental to
Timor-Leste", and acknowledged that his nation needed to look
more closely towards neighboring countries and the United States
as the key points of reference for Timor's strategic
orientation. He added that while he holds the revolving
presidency of a post within the Community of Portuguese
Language-speaking Countries (CPLP),he had difficulties
remembering the name of the post and exclaimed that he was glad
he only had to hold it for a year.




7. (C) Gusmao closed by shedding light on the machinations at
play in his government's recent decision to purchase two
Shanghai-class patrol boats from China. He said that this
procurement had actually been initiated during the government of
ex-PM Mari Alkatiri, and that Gusmao only went forward with it
after he had been presented with clear evidence regarding the
activities of fishing boats operating illegally in Timorese
waters in February 2008. He characterized FRETILIN's public
criticism of the boat purchase as hypocritical in light of the
fact that they had initiated contact with the Chinese - probably
in 2006 - on this particular procurement. Interestingly, Gusmao
went on to say that Member of Parliament and ex-Minister of
State Administration Ana Pessoa Pinto had confided to him on
August 28 that the only reason FRETILIN's leadership was upset
was because of Gusmao's decision to select FRETILIN founding
member, Abilio Araujo, to serve as the broker for the deal.
Previously, Araujo served as FRETILIN's representative to
Portugal during the Indonesian occupation, but was expelled from
the party in 1994 because of a dispute with Alkatiri.
KLEMM