WRITTEN QUESTION P-0663/02

by Paulo Casaca (PSE) to the Commission

(1 March 2002)

Subject: Support for East Timor

The LUSA news agency reported on 20 February 2002 that a Commission spokesperson has stated that:

1. over the period 1999-2002 a total of EUR 137,5 million has been allocated to East Timor from the Community budget;

2. this sum is considerably larger in per capita terms than those received by other Asian countries such as India;

3. the Commission intends to reduce the total committed to East Timor to EUR 7 million.

Meanwhile, a recent World Bank report states that between 1999 and June 2001 East Timor received a total of US$ 118 million from the international community taken as a whole; of this sum, only US$ 15,9 came from the EU, which thus appeared as the least generous of the various donors.

It would thus have to be concluded from the Commission's statement that EU payments to East Timor totalled approximately US$ 103 million in just seven months, whereas they had amounted to only US$ 15,9 million in the previous eighteen months.

Can the Commission supply a properly grounded budgetary justification of its statement?

Is the Commission not effectively misleading the public by comparing the per capita amount allocated in Community support to India, a country with a billion inhabitants which is the world's largest democracy and has been independent for decades, with that allocated to a small island state which is only now embarking on an independent existence?

Can the Commission provide another example of a proposal on its part to reduce the total committed under a budget heading by 75 %, as it has done for East Timor?

Joint answerto Written Questions P-0663/02 and E-0672/02given by Mr Patten on behalf of the Commission

(3 April 2002)

The Commission is grateful for the opportunity to clarify the situation concerning EC assistance to East Timor, particularly in the light of press reports not stimulated by the Commission which have been at times misleading. Between August 1999 and the end of 2002, the Commission has indeed allocated over EUR 137,5 million of grant aid to help East Timor.

Over EUR 51 million of emergency and food aid has been provided and almost totally disbursed. EUR 10 million has been provided to UNTAET the transitional administration of East Timor before independence. Over EUR 56 million have been pledged to the World Bank-managed Trust Fund for the reconstruction of East Timor (TFET) of which some 80 % is already disbursed to TFET. EUR 3,5 million has been provided for ongoing electoral and technical assistance. And a further EUR 17 million is available in 2002 for development projects. These totals do not include the EUR 6 million provided for East Timorese refugees returning from West Timor.

The Honourable Member is right to ask about the effective disbursement and implementation of such large sums. In allocating future funds and implementing available commitments, it is necessary to take account of the limited capacity of East Timor to absorb further large financial inputs effectively. The Commission understands from World Bank reports that some US$ 90 million of the US$ 167 million that have been pledged to the Trust Fund for East Timor for its reconstruction and rehabilitation still remain to be disbursed from TFET during the three years 2002, 2003 and 2004, although the Commission and other donors have paid in funds in good time. By February 2002 TFET had received US$ 155 million paid in from all the donors. Hence from these balances during 2003 and 2004 East Timor will still be benefiting from significant TFET aid disbursements up until 2004 when its own oil revenues begin to come on stream in significant volumes.

The Commission agrees with the Honourable Member that it is necessary to have thorough budgetary justifications for future allocations to East Timor, in particular if they risk not being spent effectively in the period. This is particularly fine in view of the very limited overall Community aid for Asia -when compared to the needs of the over 800 million Asians still living on less than $1 per day. East Timor's needs must compete with many other similarly poor populations, some whom, such as Afghanistan, are in similarly difficult, emergency situations and reconstruction phases, just as East Timor was in 1999-2002.

That being said, the Commission has recognised the special case of East Timor and this is reflected in the draft country strategy paper currently under discussion with Member states. The Commission has programmed EUR 10 million as an indicative allocation for 2003, and EUR 8 million in 2004. These amounts represent a generous per capita allocation for each East Timorese (EUR 12,5 in 2003 and EUR 10 in 2004). Populations in other countries as poor, or even poorer, than East Timor will be receiving considerably less per capita (e.g. Vietnam, Laos, Cambodia, Nepal). And none of these other countries has the large offshore oil revenues that East Timor expects to receive from 2004 onwards.

Finally, the Honourable Member asks about the significant reductions planed in 2003. Such an unusual reduction reflects the unusually large Community budgetary allocations for East Timor in 1999-2002. Since other Asian countries have not benefited from such a significant and sustained allocation in response to a crisis, there are not comparisons.