TIMOR-LESTE 2/11: FOURTEEN DAYS LATER

UNCLAS SECTION 01 OF 03 DILI 000061 SIPDIS SENSITIVE SIPDIS DEPT FOR EAP/MTS;BANGKOK PASS A/S HILL AND DAS MARCIEL E.O. 12958: N/A TAGS: PGOV PREL TT SUBJECT: TIMOR-LESTE 2/11: FOURTEEN DAYS LATER DILI 00000061 001.2 OF 003 Summary -------------- ¶1. (SBU) Two weeks after the shooting of President Ramos Horta and the apparent attempted assassination of Prime Minister Gusmao, Timor-Leste remains calm but fragile. In contrast to past political crises, Timor's governing institutions have functioned well in meticulous observance of the constitution and law. Instead of fighting each other, the military and police reunited in an effort to track down the February 11 attackers. But the perpetrators remain at large and heavily armed, and the rumors and conspiracy theories regarding the events of 2/11 continue to spiral, adding to a sense of instability and uncertainty. The prime minister both privately and publicly has conveyed his strong determination not only to bring the attackers to justice, but also to deal quickly and effectively with the military "petitioners" and the IDPs to generate stability and an environment for economic growth. The political risk associated with Timor-Leste tragically rose on February 11, and things could still get worse, but the U.S. must maintain our commitment to this young democracy. Indeed, given the PM's sure hand after February 11 and the determination of this government to improve public services and create conditions for economic and social development, we encourage strengthening our engagement. End Summary. [Note: This cable is a sanitized version of a report that we were unable to transmit on February 25 due to equipment failure. End Note.] The Good News -------------- ¶2. (SBU) During the spring 2006 crisis, virtually all of Timor-Leste's governing institutions collapsed. The police and military violently imploded into an internecine feud; senior officials fled their posts or far worse; the Prime Minister ignored constitutional provisions and declared a state of emergency with no ministerial or parliamentary consultation, backdating the implementing decree when it was finally drafted several days later. In stark contrast, the current government in its response to the February 11 events has been meticulous in following the constitution and law. The Prime Minister, demonstrating great personal courage, and his ministers quickly convened the appropriate councils after the attacks of February 11, consulted with parliament, spoke to the public, and implemented proportionate measures in response. There has been a strong consensus across the political spectrum in support of the government's actions to date. ¶3. (SBU) Further, President Jose Ramos-Horta steadily recovers in a Darwin hospital. Dili and the remainder of the country have remained remarkably calm, with even petty crime falling to record lows. The state of siege that temporarily suspended the rights of assembly and demonstration, a dusk-to-dawn curfew, the continued presence of 1500 UN police, and a surge of 200 Australian troops (adding to the 850 already present) unquestionably contributed to keeping the peace. But so have Timorese actions. The local military and policy, formerly deadly rivals, have formed joint operational command to capture the February 11 perpetrators. All in all, the performance of the Timor-Leste government has been laudable. And, the bad news DILI 00000061 002.2 OF 003 -------------- ¶4. (SBU) Between seventeen and thirty men that participated in the 2/11 attacks remain at large and heavily armed. The effort to capture them could be prolonged or go badly. As days pass without their arrest, the confidence of the public in the ability of the local or Australian forces to bring them to justice is undermined, especially in Timor-Leste where taking to the hills and staging an armed resistance is a revered national vocation. The actions of the military, both by the close protection unit assigned to the president and by its leadership in the aftermath of the 2/11 events, again raise serious questions regarding the military's coherence, discipline, and ability to modernize. Finger pointing among the political leadership regarding security failures on 2/11 is rampant, as is the generation of conspiracy theories to explain the attackers' motives and identify their supporters. Major Reinado, the rebel leader killed on February 11, enjoyed considerable popularity particularly in the western part of Timor and among unemployed, disaffected youth in Dili - how his legacy and that of his death play out once the emergency is over remains to be seen. ¶5. (SBU) More broadly, the 2/11 events, the extended state of emergency, the sense of insecurity and instability - all these can only further harm Timor-Leste's reputation and raise its political risk to potential, much-needed investors. The unresolved crisis threatens to distract the PM and his cabinet from other immediate priorities stemming from Timor's last major crisis in 2006, such as resettling the IDPs and resolving the issues surrounding the military "petitioners," with whom Reinado was once aligned. Promising efforts aimed at political reconciliation among ruling and opposition parties, and among key political leaders, to end their endless bickering - cited by many Timorese as a major source of instability - were stalled when their architect, Jose Ramos Horta, was shot. Finally, the government faces the urgent task of improving its delivery of public services and investment, and tackling the enormous challenge of creating jobs and boosting economic growth. Timor-Leste remains an exceptionally poor country, with razor thin managerial capacity; astonishingly high unemployment/child mortality/illiteracy rates; soaring youth unemployment; explosive demographics as the population grows by 4% annually; breathtakingly poor infrastructure; inadequate rule of law and incomplete property rights; and, except for oil and coffee exports, no meaningful connection to the regional or global economy. U.S. support welcomed -------------- ¶6. (SBU) According to Prime Minister Gusmao, President Bush's rapid condemnation of the attacks gave him and the country strong moral support. In this vein, we should continue to assist the GOTL in dealing with the present crisis, especially to keep its focus on resolving the two immediate sources of political instability, the petitioners and the IDPs. The Prime Minister reassuringly told us on February 25 that he had three priorities: bringing the armed men that attacked the president to justice, moving quickly to resolve the petitioners' grievances, and resettling the IDPs. Time for increased U.S. engagement -------------- DILI 00000061 003.2 OF 003 ¶7. (SBU) As we have in the past, the U.S. also should stand ready to provide tangible assistance. The quick assignment of three FBI agents to Dili last week to assist in the criminal investigation of the February 11 attacks received universal praise from among Timor's leadership (and newspaper headlines with what seemed to be 100-point fonts). Locally, we just launched two USAID programs that address causes and consequences of the 2006 crisis. One, designed to extend full property rights, will tackle both a key issue to resettling the IDPs and put into place the basis for a sound investment environment. The other will provide job skills and employment to thousands of youth in the districts. But much more can be done. We strongly encourage the Millennium Challenge Corporation to engage as expeditiously as possible with GOTL to improve policy performance and negotiate a compact (building out the national road network is a compact possibility; if undertaken, it would have vast economic benefits, including for Timorese farmers currently unable to bring their produce to market, and create much needed employment). We look forward to working with S/CRS and PACOM in developing a U.S. contribution to resettling IDP camp members, perhaps in the form of housing. We are poised to increase our engagement with Timor's security institutions to support their professionalization. Finally, we urge the Peace Corps not/not to terminate their program - to do so now would be a sharp, gratuitous blow to the Timorese leadership that would needlessly undermine their confidence in the U.S. commitment (note: in my first meeting with the PM and Foreign Minister last August, both had a quick resumption of the Peace Corps program at the top of their agenda). ¶8. (SBU) The events of February 11 tragically reminded us of the frailty of the Timorese democratic experiment. The risk of collapse rose that day, as did the specter of a failed state sandwiched between our ally Australia and partner Indonesia. Fortunately, Timorese institutions held on February 11, although this is not necessarily a reliable predictor of future behavior. It is in our interest, therefore, to support those leaders seeking to steer this country towards a democratic, peaceful and prosperous future. Together with Timor's democratic partners and the UN, we must step up our engagement to support these goals, and use our resources most effectively across the board to assist this young democracy onto a path of sustainable social and economic development. KLEMM