On October 19, 1999, Indonesia's parliament voted to confirm the results of the referendum in East Timor ofAugust 30,1999, which rejected autonomy under Indonesia and favored independence. Following the vote, East Timoresemilitiagroups, backed by the Indonesian military, launched a campaign of violence and destruction aimed at supportersofindependence. Hundreds, perhaps thousands of people were killed. Up to 240,000 East Timorese either fled acrosstheborder into Indonesian West Timor or were located there forcibly by the militia groups. The international responseto theviolence led the U.N. Security Council to authorize the dispatch of a peacekeeping force into East Timor to restoreorderand facilitate the withdrawal of Indonesian forces. Australian-led peacekeepers entered East Timor on September20, 1999. By the end of October, the Indonesian military had pulled out of East Timor. A United Nations TransitionalAuthority inEast Timor (UNTAET) was established by U.N. Security Council Resolution 1272 on October 25, 1999, to assistin thetransition to independence. The UNTAET assumed full administration of East Timor in March 2000. UNTAET's mandate has both a military and civilian component. Its tasks include: providing security andmaintaining lawand order; establishing a civil administration; developing social services; coordinating the delivery of humanitarianassistance; reconstruction and development assistance; and helping to establish the conditions for sustainabledevelopment. As of January 1, 2001, UNTAET had 7,765 military personnel, 1,389 police, and 124 military advisors. There were888international civilian personnel and 1,767 local civilian staff. Forty-seven countries, including the United States,providedmilitary, civilian, and police personnel. The plan for the recovery, reconstruction, and transition to independence for East Timor is divided into threephases. Thefirst was emergency humanitarian assistance to feed and house the population. With the exception of the refugeesremaining in West Timor, this phase is nearly over. The second phase, the beginning of power-sharing betweenUNTAETand the Timorese, began in July 2000. The chief governing body is a Transitional Cabinet chaired by the SecretaryGeneral's Special Representative and composed of five East Timorese and four international representatives. A36-member National Council, composed entirely of East Timorese, includes representatives from political parties,districts,religious groups, and civil organizations. It currently plays an oversight role and complements the Cabinet inadministeringthe country. The third, phase, which will lead to East Timor's independence, has begun with planning and publiceducationfor elections expected to be held in 2001. The first step will be the election of an 88-member Constituent Assemblyscheduled for August 30, 2001. Each of the country's 13 districts will elect one representative by majority vote, andtheremaining 75 members will be chosen by proportional representation. The Constituent Assembly then will draftaconstitution for an independent East Timor. U.N. officials had talked of independence by the end of 2001, butstatementsin June 2001 suggested that independence might be postponed until an indigenous East Timorese administrationisfunctioning fully. According to the Office of Foreign Disaster Assistance (OFDA), beginning in September 1999 more than450,000 EastTimorese were displaced, including over 200,000 people forced to relocate within East Timor. Many of the latter group have returned to their homes. Currently,some food distribution to these people continues; but U.N. programs have largely moved from relief toreconstruction. Of the roughly 240,000 displaced East Timorese in Indonesian West Timor since October 1999, over 140,000 havereturned to East Timor. According to Indonesian government statistics in March 2001, over 93,000 East Timoresewere inrefugee camps; but the actual number of displaced East Timorese probably is slightly higher. Unknown numbersofrefugees are in other parts of Indonesia. The camps in West Timor vary in size and condition. Some settlementsare largewith up to 9,000 people; others are small with only a few families. Refugees are concentrated in three main areas:Kupang(capital of West Timor), Kefamananu, and Belu District. In September 2000, three U.N. humanitarian workers were killed by members of East Timorese militia groups, resulting inthe suspension of U.N. humanitarian activities in West Timor. The militia groups have controlled the camps,restricting thereturn of people to East Timor through threats and intimidation. (See section on Continuing Threats fromIndonesia). InMarch 2001, UNTAET reopened its office in Kupang and began to assess the prospect of resuming aid programsfor therefugees. Future returns of refugees likely will be influenced by several factors. One will be the extent ofintimidation andviolence orchestrated by the militia, and the level of safety for refugee aid workers. The composition East TimoreseinWest Timor include East Timorese who want to return to East Timor, but it also includes East Timorese who are Indonesian civil servants and members of the Indonesian military. An Indonesian government survey in June 2001foundover 90 percent of the refugees wanted to remain in Indonesia. International observers said the survey wasconducted freeof intimidation. (1) However, other observers believe that, under differentcircumstances, a larger percentage of refugeeswould opt to return to East Timor. A likely emerging issue is the status of displaced East Timorese in Indonesia in East Timor's forthcoming elections inpreparation for independence. Most of these people legally would be eligible to vote, but it is unlikely thatIndonesianauthorities and the militia groups would allow the United Nations to conduct elections in the camps in West Timor. Since the advent of the UNTAET, U.S. assistance to East Timor has included both disaster assistance to thedisplaced andto the refugees in West Timor as well as reconstruction and development assistance in East Timor. Aid has beenprovidedby the Department of State's Population, Refugee and Migration Bureau; USAID's Office of Foreign DisasterAssistanceand Food for Peace; and the Department of Defense. Total U.S. humanitarian assistance for fiscal years 1999 and2000was: No humanitarian assistance is being provided for West Timor in FY2001 because the Indonesians have not met theconditions of security and free access required to provide aid. While many observers praise the work done by UNTAET, all are careful to state that much remains to be done. Destruction in East Timor was extensive. Seventy percent of housing stock, public buildings, and utilities weredestroyed. Eighty percent of schools were destroyed. Virtually all medical facilities stopped functioning. Most of the civilservice andthe professional class have left East Timor, and the ability to fill these jobs with East Timorese is hampered by lowlevelsof education and the lack of a common language (Bahasa Indonesian, Portuguese, and the local language, Tetun,arecommonly used.) Economic reconstruction in East Timor includes both the physical rebuilding of schools, homes, medical facilities,commercial and public buildings, and the training of a work force capable of running the country. Though someelementary school teachers were East Timorese, most junior high, high school, and college teachers wereIndonesians. EastTimor has to train or recruit virtually all its medical personnel. As of early December 2000, the country had hirednearly6,000 civil servants, including over 4,700 teachers. Most core government functions are operational, but the numberofTimorese staff varies from area to area. Senior staff positions have been the most difficult to fill. Many of thosehiredmust be trained in their jobs. Training of staff is taking longer than anticipated. According to a World Bank reportprepared for the December 2000 Brussels meeting, the country is beginning to develop a police force and a policeacademy. Four courts have been established and staffed. Economic activity is beginning though at a low level. Most commerce and trade is stimulated by U.N. and expatriateexpenditures. Little long term investment has been made. Agriculture is recovering in some areas. Coffee exportswill bea key to East Timor's economic future. Oil drilling in the Timor Gap waters between Timor and Australia couldbe asignificant source of revenue if large deposits of oil and/or natural should be discovered. Australia and East Timorhavenegotiated under U.N. auspices a division of the revenues from oil and gas in the Timor Gap. The agreement of July2001gives East Timor 90 percent of future oil and gas revenues from a joint development area, estimated at over $4billion over20 years. Reconstruction of physical plants has been slow, especially of schools. Roads are being rebuilt on schedule, but powerplants are being rebuilt more slowly. According to the U.S. Agency for International Development, East Timor isnot yethalfway through the planned reconstruction program and far from attaining sustainable economic growth. Financing of the international activities in East Timor is done in two ways. The peacekeeping, U.N.administrative, andinternational police personnel are financed by an assessment of all U.N. members. The agreed level of funding fortheperiod July 2000 through June 2001 is $563 million. UNTAET's other functions (reconstruction, establishment ofa civilservice and police, training judges, and establishing media outlets) are funded by voluntary contributions to severalfundswhich were established at a donor conference on December 17, 1999. At the conference, donor governmentspledged over$520 million to rebuild East Timor during 2000-2002. All of these funds are provided as grants rather than loans. The nextdonors' meeting will be in June 2001. The funds included in the December 1999 meeting were: The Consolidated Fund for Timor: The fund administered by UNTAET pays for reconstruction and development programs. Pledges to the fund total more than $32 million for the 2000-2002 period. The Trust Fund for East Timor: This fund is administered by the World Bank and the Asian Development Bank. It has received pledges of over $167.4 million for the 2000-2002 period. Interagency Appeal for East Timor Crisis: Contributions through the combined appeal of the U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) are given directly to the international agencies bydonors. These agencies are providing a response to the humanitarian emergency in both East and West Timor and alsoreconstruction and development assistance in East Timor. They include the U.N. Commissioner for Refugees,UNICEF,the Food and Agriculture Organization, U.N. Development Program and other U.N. agencies. The 1999 multi-yearUNOCHA appeal for $179.6 million so far has received $125.6 in contributions. At the donors' conference in December 2000, the East Timor National Council presented an estimated 2000-2001 fiscalyear budget of expenditures from the Consolidated Fund for East Timor and the Trust Fund for East Timor of $123.9million. The Consolidated Fund for Timor would provide $52 to $56 million of this amount. Bilateral donationswouldtotal $95.7 million. Revenues raised in East Timor through taxes and other sources would add an estimated $25million. The USAID Office of Transition Initiative (OTI) has focused on community-based initiatives, the media, andcivilsociety. This included helping to establish and supply the judicial system, training civil servants, increasing localradio andtelevision programming, reintegrating former soldiers, and programs to provide short term employment. During FY2000, USAID Focused on judicial training programs and the recovery of several rural coffee cooperatives, whichhave been part of the USAID country program since 1990 but were damaged in 1999. In FY2001, the bilateral aidprogramis focusing on voter education and coffee cooperatives. These cooperatives have three local health clinics, whichU.S.A.I.D. expects to expand to six over the next few years. USAID expects to continue working in East TimorthroughFY2003, but it acknowledges that the country will need assistance long after that. In addition, the Department of Defense is providing a small amount to train the East Timorese defense force. The BushAdministration requested $10 million for bilateral assistance for FY2002. Early discussions with Congress indicatethat theappropriations will likely be $25 million as in previous years. With the withdrawal of the Indonesian military (TNI) from East Timor in October 1999, the East Timoresemilitia groupsalso withdrew across the border into West Timor. There they regrouped. Australian and New Zealand militaryintelligencereportedly believe the hard core strength of the militia groups is no more than several hundred; but they also havea broaderbase of followers of 1,000-2,000. (2) After their withdrawal, the militia usedtheir control over the East Timorese refugeecamps in West Timor to recruit new members. They also reorganized and rearmed reportedly with direct aid fromelementswithin the TNI, including the elite Special Forces (Kopassus). By mid-2000, the militia groups were armed withstandardTNI automatic weapons and grenades and TNI combat clothing. (3) After the murder of U.N. workers by militia members in September 2000, President Wahid ordered the TNI to send moretroops to West Timor "to help control the situation." The TNI responded with the dispatch of three army battalionstotaling800 troops. Nevertheless, Wahid's order appears to have had no appreciable impact on militia activities. The TNIhas notused force against the militia groups. As the militia groups revived in West Timor, they began to infiltrate members back into East Timor. Their aim appears tobe to re-establish a presence and be able to challenge East Timor's civil authorities when the UNTAET ends andEastTimor becomes independent. A spokesman for the U.N. peacekeeping force stated in September 2000 that tenwell-armedmilitia groups, of 5 to 30 men each, had infiltrated. At least one group had reached the central region of East Timor. Several clashes occurred with Australian, New Zealand, and Nepalese peacekeepers patrolling the border with WestTimor. (4) Australian Foreign Minister Alexander Downer and U.S.Ambassador to Indonesia, Robert Gelbard, accused theTNI of supporting the militia buildup and infiltrations. Gelbard warned that "by abetting the militias [the Indonesiangovernment] is on the verge of allowing a guerrilla war to be waged in East Timor." (5) Statements by militia leaders alsosuggested that they hope that control of refugees and the threat of armed infiltration would give them negotiatingleveragewith the future East Timor government to bargain for an amnesty for the crimes committed in 1999. The peacekeeping force of 8,000 has had about 2,200 troops, mainly Australians and New Zealanders, deployed along thenearly 150 mile border between East and West Timor. The remainder are located in the central and eastern regionsof EastTimor. The Australians and New Zealanders adopted more aggressive patrolling in the summer of 2000, resultinginincreased armed clashes with the infiltrators. There were complaints in the summer of 2000 that the over 1,000 manPortuguese force in the central sector was not patrolling aggressively to locate infiltrators that had reached thatarea. (6) Aggressive patrolling appears to be necessary, given the apparent militia strategy to establish base areas and waituntil theUnited Nations, including the peacekeepers, depart. Some U.N. officers believe the peacekeepers need more mobileequipment, including helicopters, to deal with the infiltration. A continued existence of large numbers of forcibly held East Timorese and a continued base of operations for the militiagroups in West Timor likely would result in a tense and possibly hostile relationship between East Timor andIndonesiaafter East Timor becomes independent. The Indonesian government has not indicated its diplomatic stance towardEastTimor following independence-whether Indonesia will establish diplomatic relations with East Timor and whetherit willsupport East Timor's admittance into international organizations. Another uncertain factor is the attitude ofIndonesianVice President Megawati Sukarnoputri, especially since she likely will assume defacto control of the governmentor assumethe Presidency itself in the summer of 2001 as a result of impeachment proceedings currently underway againstPresidentWahid. Megawati has refused to meet East Timorese leaders when they have visited Jakarta, and she is reportedto believethat the Indonesian government never should have allowed the August 1999 referendum on independence in EastTimor. As international observers saw firsthand the killings and destruction in East Timor caused by the TNI-backedEastTimorese militia in September 1999, demands arose for prosecution of militia leaders and Indonesian militaryofficersinvolved in instigating the violence. U.N. officials, including Secretary General Kofi Annan, asserted that the U.N.Security Council could establish an international tribunal to try instigators of the violence. Such talk died down inearly2000 in response to the steps the Indonesian government appeared to take toward judicial proceedings. Agovernmentcommission of inquiry reported that the TNI was involved in "crimes against humanity" in East Timor. Itrecommendedthat 33 people be investigated for possible prosecution, including TNI commanders in East Timor and militialeaders. Thename among the 33 that drew the most attention was General Wiranto, the TNI's commander-in-chief at the timeof theviolence. President Wahid reacted by firing Wiranto from a cabinet-level position. Attorney General MarzukiDarusmanset up an investigating team in response to the commission's finding. (7) At this juncture, the momentum of investigations slowed down as the military leadership increased resistance toprosecutions. In September 2000, the Attorney General's team named 19 individuals for possible prosecution, eachpersonin connection with at least one of five atrocities. Three others were subsequently named, bringing the total to 22. ThreeTNI commanders in East Timor are among the 22, but not Wiranto. Also missing is Eurico Guterres, head of thelargeAitarak militia, who was on the inquiry commission's list of 33. As of April 2001, there have been no prosecutions. April2001 also marked the end of a 310 day legal period for the Attorney General to initiate prosecutions, leaving hislegalauthority in question. (8) The Indonesian government barred any UnitedNations investigation on Indonesian soil of thekilling of the U.N. workers. It also rejected a U.N. request to extradite Eurico Guterres to East Timor. Less than a week after the naming of the 19, East Timorese militia members murdered the three U.N. refugee aid workersin Atambua, West Timor. This culminated two months of escalating militia violence and intimidation against U.N.refugeeaid workers. Armed Indonesian soldiers and police witnessed the murders and took no action. (9) The U.N. SecurityCouncil passed a resolution on September 8, 2000, calling on Indonesia to disarm and disband the militia groupsand allowpeople in the refugee camps to return to East Timor. The TNI ordered militia members to turn in their weapons;but therewas little enforcement of the order. (10) Police arrested Eurico Guterres in February 2001 on the charge of obstructing efforts to disarm the militia. In April 2001,he was sentenced to six months imprisonment; the period following his arrest in February was deducted from thesentence. Six militia members were arrested in connection with the killings, and three confessed. Prosecutors originallyplanned tocharge the six with manslaughter but decided in March 2001 to reduce the charges to participating in "mobviolence." They received sentences of 10 to 20 months imprisonment. The Bush Administration and Congress face several issues as East Timor prepares for independence amidst anunsettledrelationship with Indonesia. One context of this is statements from United Nations officials that a U.N. presence,includingpeacekeepers, should remain in East Timor after independence. Sergio Vieira de Mello, the UNTAETAdministrator, hasstated that peacekeepers and experts in finance and other fields should remain until 2003. One issue will be future levels of U.S. economic aid. The Bush Administration, as of April 2001, has not yet submitted arecommended aid program to Congress although it reportedly favors a program of $10 million. A second issue willbe theU.S. role in creating and assisting an indigenous East Timorese defense capability, especially if a threat fromIndonesiacontinues after independence. Australia is playing the lead role in establishing an East Timorese defense force,includingfunding of the construction of a training facilities for East Timorese military personnel. In July 2001, the first groupof 250soldiers graduated from an Australian-assisted military training center. Australian government and military officialshaveinitiated consultations with the Bush Administration over a supportive U.S. input in training and arming an EastTimoresedefense force. A study prepared in mid-2000, with contributions from the Australian and New Zealand militaries, concluded that EastTimor should have a military force of 1,500 personnel, backed by 1,500 paramilitary personnel, afterindependence. (11) Thisreportedly is the goal of the Australian-directed program. Some observers believe that East Timor will require amuchlarger force if a military threat from Indonesia continues after independence. Influencing Indonesian policy toward East Timor likely will continue to be a major challenge for U.S. policy. As indicatedby the earlier discussion of the situation in West Timor and attempts to prosecute TNI personnel , the United Statesso farhas been frustrated. U.S. officials, especially Ambassador Robert Gelbard, criticized the Indonesian governmentand theTNI for the TNI's continued support of the East Timorese militia groups. U.N. Ambassador Richard Holbrookewarnedthat Indonesia would face an international war crimes tribunal if it did not put on trial military leaders responsiblefor theviolence in East Timor. Similar messages in 2000 came from Secretary of Defense William Cohen and AdmiralDenisBlair, Commander-in-Chief of U.S. Pacific Forces. (12) Cohen warned inJakarta that a continued Indonesian failure todisarm the militia groups "could jeopardize continued economic assistance to Indonesia." Indonesia, he said, "facesamomentous decision," and that "this is something that must be addressed in the immediate future." (13) The Clinton Administration suspended U.S. military contacts with and arms sales to the TNI in September 1999 because ofthe violence in East Timor. It resumed limited contacts in the summer of 2000, but it suspended them again afterthemurders of the U.N. workers in West Timor. However, at the same time, the Administration lifted the ban on thesale ofparts for C-130 military transport aircraft, which is the key means by which the TNI moves troops across the vastIndonesian archipelago. Congress enacted restrictions on U.S. assistance to the TNI after the September 1999 violence in the form of the "Leahyamendment" to foreign operations appropriations legislation. The Leahy amendment bars money for ForeignMilitaryFinancing (FMS) program credits for Indonesian purchases of U.S. military equipment, and it prohibits money forIndonesian participation in the U.S. International Military Education Training (IMET) program. Money is barreduntil thePresident certifies that Indonesia has undertaken six measures related to East Timor involving judicial accountingfor TNIand militia members who committed human rights abuses, allowing East Timorese displaced persons in West Timortoreturn home, and preventing militia incursions into East Timor. As of April 2001, it appears that Indonesia has notmet anyof these conditions. A major congressional initiative is Title X of H.R. 1646 , the Foreign Relations Authorization bill, which authorizes State Department programs for fiscal years 2002 and 2003. The bill has passed the House ofRepresentatives;action is pending in the Senate. Entitled "East Timor Transition to Independence Act of 2001," the detailed TitleX isdivided into sense of Congress provisions, instructions to the Bush Administration, reporting requirements leviedon theBush Administration, and a specific amount of aid money earmarked for FY2002. The thrust of Title X is thedefining ofU.S. policy toward East Timor when the current United Nations administration ends and East Timor becomesindependent. The sense of Congress provisions lay out a range of initiatives for the United States to take: economic aid,diplomaticrelations, support for East Timor's participation in international organizations, and security assistance. One senseofCongress provision deals with the issue of accountability of Indonesian military leaders for the violence in EastTimor in1999; it calls for U.S. support of United Nations efforts including "the possible establishment of an internationaltribunalfor East Timor." Instructions to the Bush Administration call for U.S. support for aid to East Timor frominternationalfinancial institutions, the establishment of Peace Corps programs in East Timor, and the initiation of U.S. trade andinvestment promotion programs for East Timor (General System of Preferences, Overseas Private InvestmentCorporation,and Export-Import Bank programs). Reporting requirements relate to Administration plans for the establishmentof a U.S."diplomatic mission" in East Timor upon independence and plans for security assistance programs for East Timor,especially the provision of excess defense articles and East Timorese participation in the U.S. International MilitaryEducation Training program (IMET). Title X authorizes $25 million for economic and democratic developmentinFY2002. The intent of congressional supporters of this bill may be to lay the foundation for an active, supportive U.S. policy towardEast Timor once it gains independence. There appears to be an implied message to the Bush Administration thattheAdministration should not neglect East Timor in the future because of policy priorities aimed at influencing thevolatilesituation in Indonesia. The earmark of $25 million in aid for FY2001 may symbolize this intent, given that the BushAdministration reportedly favored only $10 million. If this is congressional intent, it would continue the patternof the1990s in which Congress restricted U.S. relations with the Indonesian military in order to compel the first BushAdministration and the Clinton Administration to give more priority to Indonesian human rights abuses in EastTimor inoverall U.S. policy toward Indonesia. The ability of U.S. policy to influence Indonesian behavior appears to be limited by several factors. The first is theresistance of the TNI and the failure of the Wahid government to exert authority over the TNI in West Timor. Within theUnited Nations, China and possibly Russia could be expected to oppose any action by the Security Council to createaninternational tribunal to bring Indonesian military leaders to trial for East Timor atrocities. U.S. priorities regardingIndonesia are strained and diffused by the mounting violence and strife throughout the country (separatistinsurgencies,ethnic and religious strife, urban bombings), the possible impeachment of President Wahid, economic deterioration,andlegal and physical dangers facing U.S. companies in Indonesia. U.S. strategy, therefore, gives only limited priorityto theTimor situation amidst these other issues. Indonesia's mounting problems create a dilemma for the United Statesin anyconsideration of expanding Timor-related sanctions against Indonesia, along the lines of Secretary Cohen's warning;foreconomic sanctions could accelerate destabilization of Indonesia which, in the view of many observers, could leadto itsdisintegration.

Summary: A United Nations Transitional Authority in East Timor (UNTAET) was established in October 1999 following the entranceof U.N.-sponsored international peacekeepers into East Timor. These measures came in response toIndonesian-instigatedviolence against East Timorese who had voted overwhelmingly for independence from Indonesia in a referendumofAugust 30, 1999. UNTAET's mandate is broad. It is to help East Timor recover from the violence throughhumanitarianaid and reconstruction of facilities that were damaged or destroyed. It is to help East Timor establish a functioninggovernment, which will take over from the United Nations when East Timor formally becomes independent. Independenceis estimated for the end of 2001, but recent statements by U.N. officials suggest that it could be postponed. TheUnitedNations also has been involved in Indonesian West Timor in assisting about 240,000 displaced East Timorese whofled orwere forcibly transported to West Timor during the violence. The U.N. operations are financed through assessments on all member nations and voluntary contributions from governments. Current funding levels are to cover the period 2000-2002. The U.S. Agency for InternationalDevelopmentprovided $29 million in FY2000 and $25 million in FY2001 in bilateral assistance. U.S. aid is helping to establishajudicial system, train civil servants, assist local radio and television programming, educate voters, and assist thecoffeeindustry (East Timor's main export). The Bush Administration requested $10 million for FY2002, but Congressalreadyhas indicated that $25 million may be appropriated. East Timor faces a continuing threat from Indonesia. East Timorese militia groups, who committed much of the violencein September 1999, regrouped in West Timor after the establishment of UNTAET. They controlled the campshousingdisplaced East Timorese, preventing many from returning home. In August 2000, militia members murdered U.N.workersin the camps. The militia rearmed with assistance from the Indonesian military, and they infiltrated back into EastTimor. The Indonesian military also has resisted attempts to bring to trial military officers and militia leaders responsiblefor theviolence of September 1999. The United States faces several policy issues: levels of future aid to East Timor, the U.S. role in assisting an indigenousEast Timorese military force, and influencing Indonesian policy toward East Timor.