U/S BURNS' CONVERSATION WITH TIMOR-LESTE

C O N F I D E N T I A L STATE 104566


E.O. 12958: DECL: 09/26/2018
TAGS: OVIP BURNS WILLIAM ECON KMCA MARR PMIL
PREL, PGOV, PHUM,UNSC, TT
SUBJECT: U/S BURNS' CONVERSATION WITH TIMOR-LESTE
PRESIDENT JOSE RAMOS-HORTA

Classified By: Under Secretary William J. Burns for
Reasons 1.4(b) and (d)


1. (U) September 26, 2008; 5:30 p.m.; New York.


2. (U) Participants:

U.S.
Under Secretary William Burns
Daniel Delk, EAP/MTS (Notetaker)

Timor-Leste
Jose Ramos-Horta, President
Zacarias da Costa, Minister of Foreign Affairs
Nelson Santos, Permanent Representative, UN Mission
Jorge Camoes, Charge d'Affaires, Embassy Washington


3. (C) SUMMARY. Under Secretary Burns praised Timor's
post-February 11 stability and its significant progress on
preparing a Millennium Challenge Corporation (MCC)
proposal in a cordial, 30 minute meeting with Timor-Leste
President Jose Ramos-Horta. Ramos-Horta offered his
ambitious vision for completing the IDP resettlement
process, achieving food security, and resolving
long-standing budget execution problems - all by the end
of 2009. Ramos-Horta also expressed appreciation for
security sector assistance and called for continued USG
support. As expected, he also criticized U.S.-Cuba
policy. END SUMMARY.

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PROGRESS
--------------


4. (C) U/S Burns congratulated President Ramos-Horta on
his improved health and attributed Timor-Leste's
post-February 11 stability as a testament to his
leadership. Ramos-Horta observed that the institutions of
government remained in place and operated according to the
constitution. The military and police worked together
well. Prime Minister Xanana Gusmao has governed with a
steady hand.

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IDP PROBLEMS PERSIST
--------------


5. (C) Ramos-Horta described the Internally Displaced
Persons (IDP) issue as "mostly resolved," but admitted it
would take time to complete the process and that
challenges remain. The government only has the capacity
to close one to three camps at a time. Alluding to
Timor's lack of codified property rights, Ramos-Horta
lamented that not all communities have peacefully received
returning IDPs. U/S Burns acknowledged the difficulty of
resettling such a large number of IDPs in any country, but
underscored the need to continue the process of closing
the camps.

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SECURITY ASSISTANCE
--------------


6. (C) President Ramos-Horta praised Ambassador Klemm for
his leadership and expressed great appreciation for U.S.
government assistance in maritime security. He called the
USNS Mercy visit "a boon," declared the Joint Marine
Exercise a complete success, and added that future groups
of Marines are welcome "as often as you can afford."
Ramos-Horta half-joked that the technical assistance
provided during ports of call was just as helpful to
Timor-Leste as the money the soldiers contributed to the
local economy.


7. (C) Citing illegal fishing on the southern coast,
President Ramos-Horta described the recent purchase of two
Chinese boats critical to Timor's maritime capacity, but
not sufficient. He called for more trilateral or
multilateral cooperation with Portugal, Australia and the
United States to build maritime capacity. He also said
that he hoped to name an ambassador to Washington soon.
However, a final decision had been delayed to provide more
time to find a suitably senior and experienced candidate.

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STAVING OFF A FOOD CRISIS
--------------


8. (C) President Ramos-Horta defended the GOTL's
much-criticized decision to distribute bags of rice to
select families - mostly related to government bureaucrats
- to prevent a repeat of the rice riots of 2007. Although
it was not the best policy, he admitted, it was better
than the alternative of doing nothing. The government
decided to give discounted rice to traders to circulate
through the economy. Ramos-Horta regretted that many of
the traders, in turn, sold the rice at inflated prices.
He said he favors cash hand-outs to the poor both as a
matter of economic good sense, and of justice. Starting
next year, the poor will receive $20 per month in cash
subsidies. Veterans have already received a significant
cash payment, but they will also receive $100 per month.

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FISCAL POLICY
--------------


9. (C) President Ramos-Horta boasted that he expected
Timor to report 8% growth in non-oil GDP for the year. He
also reported progress on improving budget execution,
pledging that beginning in 2009 all budgeted funds will be
expended within the calendar year allocated. Ramos-Horta
complained about spending an inordinate amount of time
cleaning up the mess left behind by the FRETILIN
government, including $100 million in unused funds
allocated as far back as 2004. The GOTL also plans to
continue innovations in agriculture and high-yield seed
production, which he estimates could lead to food
self-sufficiency in one year's time.

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WHETHER MCC?
--------------


10. (C) Ramos-Horta complained that MCC should "move
faster" toward developing a compact with Timor-Leste. U/S
Burns commented that for a country first considered MCC
eligible in 2005, Timor's candidacy was moving at a "good
rhythm" and that he hoped for more progress next year.
While praising the Bush Administration for dramatically
increasing foreign aid, Ramos-Horta worried that with the
current U.S. economic crisis, the next administration
might cut assistance, particularly new programs like MCC
and PEPFAR. U/S Burns replied that the U.S. economy has
historically shown remarkable resiliency, and he expects
the next administration to continue in the tradition of
U.S. foreign assistance.

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Ramos-Horta the Statesman
--------------


11. (C) Known to hold himself and his international
credentials, including a Nobel Peace Prize, in high
regard, President Ramos-Horta provided his thoughts and
prescriptions for many international problems and insights
on the U.S. elections.


12. (C) Cuba: Highlighting Timor-Leste's positive UN
voting record on human rights, Ramos-Horta described
U.S.-Timor-Leste bilateral relations as "close as husband
and wife... but with occasional problems." He then
echoed previous statements from his General Assembly
address and recent press interviews, where he expressed
his fundamental opposition to sanctions against poor
countries to bring about political change as "immoral."
He is against the Cuba embargo "as a human being" and
expressed his belief that only greater exchange will bring
about change.


13. (C) Burma: Ramos-Horta was more nuanced on Burma,
saying that he disagreed with sanctions, but understood
that Western countries would also be criticized if they
were seen as doing nothing. He also claimed that he
argued with the Spanish to reverse Burma sanctions.


14. (C) The Philippines: More was expected from a
democratic regime. The escalating violence in Mindanao
was the result of a lack of credible negotiators and peace
could be achieved more quickly with greater political
leadership. He expected to return to the Philippines to
speak for the Vienna Peace Convention Lecture series and
raise U.S.-Philippines-Timor education collaboration.


RICE