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Click here for analysis, documents and links related to the Mid-year Budget Rectification.

Statemen ida ne iha PDF ba printing: English or Tetum

Core Group Transparency Timor-Leste
Rede Transparensia Timor-Leste
Secretariat: Mata Dalan Institute, Bebonuk, Dili, Timor-Leste
redetransparensia@gmail.com, Zinha (+670)7356500

Tetum kraik

Statement to Media
New Mid-Year Budget is First Step to Resource Curse

3 July 2008

On 18 June 2008, the Timor-Leste Council of Ministers passed the amendment to the State Budget for 2008, and sent it to Parliament for approval. The Core Group on Transparency, a network of local NGOs monitoring aspects of government activities, is concerned about several issues related to this Mid-Year Budget Update and advocates for a significant improvement of the process. To that effect, the Core Group has asked Commission C and members of Parliament to allow the Core Group present a civil society statement to Parliament, but they have declined.

We would like to state that the National Parliament are representatives of the people, elected by the people and entrusted with the responsibility to protect the interests of the people. We urge them to listen seriously to what citizens of Timor-Leste have to say. We ask the media to accurately disseminate this information and continue their own investigations of the budget process. And we urge the public to discuss this information and press their elected representatives for improvements.

We like to stress several points related to the Mid-Year Budget Update and public participation in the process.

Comments on this Mid-Year Budget Update

The 2008 State budget approved last December was $347.8 million, to be funded by withdrawing $294 million from the Petroleum Fund and the rest from domestic revenues and existing cash reserves. At that time the amount to be withdrawn from the Petroleum Fund was the maximum allowed according to Petroleum Fund Act and the Estimated Sustainable Income (ESI) calculations. Our Prime Minister stated at that time that “the Government will not be withdrawing from the Petroleum Fund any amount that exceeds the Estimated Sustainable Income for the next fiscal year.”

The Mid-Year Budget Update proposes a “rectification” to increase the 2008 budget to $773.3 million, of which $686.8 million will come from the Petroleum Fund. This increases the budget by 122%, more than double the original. The ESI has been re-calculated and is now $396.1 million (35% more than in December). This is not enough to finance the increase in expenditures, so the budget proposes to take an additional $290.7 million from the Petroleum Fund.

We request the Parliament to consider carefully the following points and request clarification and improvement from the Government:

  1. A Mid-Year Budget Update (MYBU) should be used to fine-tune the original budget and make minor adjustments, not to alter it completely. For an update with so many changes and additions, the timeline for a proper discussion within Parliament is too short. Therefore, we urge the Parliament to extend its discussion and decision-making timeline.

  2. Much of the increase in the MYBU is related to new subsidies and increases in salaries and incorporates hasty policy decisions such as the $240 million Economic Stabilization Fund and disbursements for a heavy oil power plant and electricity distribution system ($390 million over four years). Both have been developed without any public consultation, and both do not contain proper tender mechanisms. Especially for large projects and funds, there needs to be careful study of social, economic, cultural and environmental impacts.

  3. The Economic Stabilization Fund has been allocated a lot of money—nearly as much as the original budget for 2008—but Parliament has not been told what it will do or how it will be managed. A so far undisclosed decree law has been passed to establish this Fund rather than a more consultative parliamentary law. Although we understand the Government wants to reduce prices of imported goods, the Fund will make the State pay for imports. This creates irrevocable commitments for the current and future governments. A large amount of money available for imports will drive prices up, exactly the opposite of what everybody wants. It also does not benefit the majority of people who live outside the cash economy.

  4. During the first quarter of 2008, the Government spent only $32.4 million, executing less than 10% of the budget for the year, and by mid-June they had spent around $80.2 million. This means that of the original $348 million budget $267 million is still not spent. With the proposed “rectification” the Government would need to spend $693 million. We think it is highly unrealistic that the Government can spend this in the next six months, as it would mean spending eight times as fast as they have done so far. Moving money into newly developed funds is not the same as spending it.

  5. The Petroleum Fund was established to safeguard against the resource curse that afflicts nearly all developing countries that dependent on oil and gas revenues. The Estimated Sustainable Income was established as the maximum amount that could be prudently spent. We have a windfall in oil revenues which makes it look like we are rich. However, spending more than the ESI is a big and dangerous step towards the resource curse. If oil prices fall or when our oil is used up, Timor-Leste will have to borrow money.

  6. In addition to the proposed $773.3 million proposed by the MYBU for 2008, it includes commitments for multi-annual projects worth at least $547 million (including electricity grid, patrol boats, and irrigation systems). If this rectification passes, all these projects are approved. This is a dangerous practice as most of them have not gone through a process of consultation looking at impact on the social, cultural, and economic life of our people and the environment of our country. Huge multi-year projects should not be approved this way.

Comments on the Budget process

  1. Our Constitution (i.e. Art. 40, 46, 48, 63, among others) guarantees the right of our citizens, as individuals or in association in the form of civil society organizations, to make and express judgments on the country’s budget. This requires that budget documents be widely available. This is especially the case for the budget proposal, which should be available to citizens, and discussed in public consultations before it is adopted by the legislature. It will benefit, not hinder, the process when civil society is consulted for the budgetary process at Ministerial level prior to going to the Council of Ministers. We implore the Parliament to reiterate and propose to the Government procedures enhancing this process

  2. Timor-Leste has a budget process that is increasingly inefficient, undemocratic, hasty, short-sighted and secretive. Various issues contribute to this:

  1. There is no annual pre-budget statement informing, and preparing, people and legislators of the State Budget’s general state of affairs such as total expenditures, total revenues expected and debt to be incurred during the upcoming budget year.

  2. A state budget should be a reflection of the Program of the Government for that year, and for the future. It should implement medium and long-term policies set by the National Development Plan, the State of the Nation reports, as well as other important documents. There should be policy and programs first, with budgets to carry them out.

  3. In almost every financial year, the new proposed budget is rushed in the last couple of weeks and Parliament is left with very little time to consider the budget. Consequently, there is limited communication and consultation with the knowledgeable people. This creates the danger of setting unachievable goals in the budget.

  4. Budget execution reporting is late (Quarter1 report on the period January to March was only available on the internet by 23 June) and largely inaccessible as the Ministry of Finance has no means for effective dissemination of public information. Many times, budget execution reports have shown that expenditure is very low, which reiterates our comments earlier.

  5. The mid-year review should contain a comprehensive update on the implementation of the budget, including a review of the economic assumptions underlying the budget and an updated forecast of the budget outcome for the current budget year. Documentation should be widely available.

  6. There is no centralized place from which to access public documents in a timely fashion. Civil society and media have great difficulty to access budget documents: no help has been forthcoming from the State Secretariat of the Council of Ministers or the Ministry of Finance.

This press statement has been prepared by the members of the Core Group on Transparency. Electronic copies of this statement in Tetum and English can be obtained from the Secretariat, redetransparensia@gmail.com, or from www.laohamutuk.org/econ/MYBU08/RDTLMYBU08.htm.

Participating organizations are:
Asosasiaun Hak, ETADEP, FONGTIL, Fundasaun Ba Loos, Haburas, La’o Hamutuk, Mata Dalan Institute, Rede Feto

Core Group Press Conference July 3. Left to right: Carlos Florindo (ETADEP), Julino Ximenes (Asosiasaun HAK), Viriato Seac (La'o Hamutuk), Sedelizio "Leo" Ximenes (Fundasaun Ba Los)

English above

Core Group Transparency Timor-Leste
Rede Transparensia Timor-Leste
Secretariat: Mata Dalan Institute, Bebonuk, Dili, Timor-Leste
redetransparensia@gmail.com, Zinha (+670)7356500

Konferensia Imprensa
Hadalas Orsamentu Rektifikativu iha Tinan- Klaran nu’udar pasu primeiru atu lori Timor-Leste tama ba Malisan Rikusoin

 3 Jullu 2008

Iha loron 18 fulan Juñu 2008, Konsellu Ministru Timor Leste pasa ona Orsamentu rektifikativu ba tinan 2008, no haruka ona esbosu ne’e ba Parlamentu Nasionál hodi aprova. Core Group Transparency, hanesan redi ida ba ONG sira hodi tau-matan ba Guvernu nia atividade sira, rede ne’e preokupa tebes ho asuntu Orsamentu Rektifikativu Tinan-Klaran 2008 nian no halo ona asaun balun atu fó tulun hadi’a prosesu ne’e. Atu involve an iha prosesu ne’e, Core Group Transparency, husu ona ba Komisaun C no membru Parlamentu atu bele fó tempo no fatin ba Core Group ba hatoo Sosiadade Civil sira-nia testemoña iha Parliamentu, maibe resposta ne’ebé hetan ona mak labele tamba laiha sira preukupadu los ona.

Ami hakarak fó hanoin ba membru Parlamentu Nasionál mak hanesan povu nia reprezentante ne’ebé hili hosi povu no fó ona responsabilidade atu hodi proteze povu nia interese iha Parlamentu. Ami eziji ba membru Parlamentu sira atu rona didi’ak saida mak sidadaun Timor-Leste sira-nia lian. Ami ho laran hakraik-an husú ba media atu fahe no halekar informasaun no halo kuntinua halo nafatin sira-nia investigasaun kona-ba prosesu orsamentu ne’e rasik. No ami husú nafatin mos ba ema hotu atu nafatin deskuti informasaun ne’e no eziji ba sira-nia reprezentante iha Parlamentu hodi bele hadi’ak liutan prosesu ne’ebé temin ona.

Ami hakarak bolu antensaun ema hotu nian ba pontu balun ne’ebé relasiona ba Orsamentu rektifikativu Tinan-Klaran 2008 no partisipasaun ema hotu nian iha prosesu ne’e.

Komentariu kona-ba Orsamentu Rektifikasaun Tinan-Klaran ne’e

Orsamentu Estadu 2008 ne’ebé aprova ona iha Dezembru tinan-kotuk, hamutuk tokon $347.8, ne’ebé sei selu hosi osan Fundu Petroleu tokon $294 no fundu seluk mai hosi rendementu domestik nian no osan rezerva ne’ebé iha tiha ona. Iha tempo ne’eba, osan ne’ebé atu foti hosi Fundu Petroleu maksimu ona tuir dunik Lei Fundu Petroleum no Estimatizasaun Rendimentu Sustentavel (ESI) nia haruka. Iha tempo ne’eba ita-nia Primeiru Ministru hateten katak “Governu sei la hasai osan hosi Fundu Petroleu ne’ebé aas liu fali Estimatizaun Rendementu Sustentavel ba iha tinan fiscal oin-mai.”

Orsamentu Tinan-Klaran ne’e proposta “rektifikativu” ida hodi hasa’e tan orsamentu 2008 ba tokon $773.3, ne’ebé tokon $686.8 sei foti mai hosi Fundu Petroleu. Ne’e hasa’e orsamentu ba pursentu 122, hadalas ona orsamentu original. Guverno kalkula-fali ESI no hetan tokon $396.1 (pursentu 35 aas liu kalkulasaun iha fulan Dezembru). Orsamentu ne’e sedauk too atu hodi selu gastu ne’ebé aumenta ona ne’e, tan ne’e orsamentu ne’ebé proposta ona atu foti tan tokon $290.7 hosi Fundu Petroleum.

Ami ho laran-hakraik an husú ba Parliamentu atu konsidera didi’ak pontu hirak tuir mai ne’e no husú klarifikasaun hosi Governu hodi bele hadi’a di’ak liu tan orsamentu ne’e:

  1. Orsamentu Rektifikativu Tinan-Klaran 2008 ida ne’e tenke uza hodi hadi’ak liutan orsamentu original no halo mudansa oitoan deit, laos fali atu muda buat sira ne’e hotu. Tempo badak tebes ba Parlamentu atu halo deskusaun ne’ebe di’ak ba atualiza ho mudansa no aumenta ne’ebé barak los ne’e. Tantu, ami eziji ba Parlamentu atu prolonga tan tempo hodi deskuti no ba halo desizaun.

  2. Hasa’e Orsamentu Rektifikasaun Tinan-Klaran ne’e haree-liu ba subsidiu no hasa’e salariu no lalais hatama mos desizaun politika ho osan tokon $240 ba Fundu Stabilizasaun Ekonomia no osan atu hodi selu Fabrika Eletrisidade heavy-oil (mina-alkatraun) no nia sistema distribuisaun eletrisidade (osan tokon $390 ba tinan haat nia laran). Projeitu rua ne’e halo la liu hosi konsultasaun publiku ruma, no la tuir mos mekanismu tenderizasaun ne’ebé di’ak. Liu-liu haree ba fundu no projeitu boot ne’ebé presiza atu estuda-didi’ak ninia impaktu ba moris sosial, ekonomia, kultura no ambiente.

  3. Osan lubuk ida mak aloka ona ba Fundu Estabilizasaun Ekonomia—kuaze atu barak hanesan ho  orsamentu orijinal ba 2008—maibe Parlamentu sedauk fó hatene kona-ba osan ne’e atu uza ba halo saida ka oinsa atu maneza  osan ne’e? Too agora sedauk klaru, dekretu lei pasa tiha ona hodi harii Fundu ne’e duke halo lei parliamentaria ida ne’ebé nakloke ba debate. Maske ita kompriende Governu hakarak hatuun folin sasan importa sira ne’e no Fundu ne’e sei halo Governu selu ba sasan importasaun nian. Ne’e sei hamosu komitmentu ida ne’ebé sei labele muda ka troka ba iha governu iha tempo oin mai. Osan ne’ebé iha ba importasaun sei halo folin sasan sa’e aas, sei kontra los-los saida mak ema ida-idak nia hakarak. Ne’e hadok mos kampo servisu ba ema lobun sira ne’ebé moris laiha osan barak.

  4. Durante fulan-tolu primeitu tinan 2008, Governu gasta deit tokon $32.4, ezekuta ona osan latoo pursentu 10 hosi orsamentu ne’e, no iha fulan Juñu-klaran sira gasta ona maizumenus tokon $80.2 deit. Ne’e hatudu katak hosi osan tokon $348, sei iha osan tokon $267 mak seidauk gasta. Ho proposta “rektifikasaun” ne’e, Governu sei atu gasta tan osan tokon $693 tan. Ami hanoin ne’e la realistiku tebes katak Governu bele gasta osan barak hanesan ne’e iha fulan neen nia laran, karik ne’e akontese sei hatudu katak Governu sei gasta dalas ualu lalais liu hosi buat ne’ebé sira halo ona. Muda osan ba iha fundu ne’ebé foin halo ne’e la hanesan ho gasta ona osan ne’e.

  5. Fundu Petroliu harii ona atu hodi salvaguarda hasoru malisan rikusoin ne’ebé ameasa nasaun terseiru-mundu sira ne’ebé mak depende makaas ba rendementu mina no gas. Estimatizasaun Rendementu Sustentavel harii hanesan valor maksimu ida ne’ebé tenke gasta ho koidadu tebes. Ita iha sorti boot ida katak ita hetan rendementu hosi mina no gas ne’ebé halo ita sai hanesan nasaun riku, maibe wainhira ita gasta barak ka aas liu fali ESI, sei sai hanesan ameasa ne’ebé sei lori ita-nia nasaun ba rai-kuak malisan rikusoin nian. Karik mina nia folin tuun ka ita-nia rikosoin mina no gas maran ona, Timor Leste tenkeser ba impresta ona osan.

  6. Adisionalmente ba proposta osan tokon $773.3 hosi rektifikasaun orsamentu ba 2008, inklui mos komitmentu ba projeitu ba tinan-barak ho osan maizumenus tokon $547 (inklui redi eletrisidade, ro-ahi patrolia, no halo sistema irigasaun). Karik orsamentu rektifikasaun ne’e pasa, projeitu sira ne’e mos aprova kedas ona. Pratika hanesan ne’e perigozu tebes, liu-liu projeitu sira ne’e barak mak halo la liu hosi prosesu konsultasaun ida ne’ebé fó antensaun ba impaktu moris sosial, kultura, ekonomia no nasaun nia ambiente. Projeitu boot sira hanesan ne’e labele aprova deit hanesan ne’e.

Komentariu kona-ba Prosesu Orsamentu

  1. Ita-nia konstituisaun (i.e. Art. 40, 46, 48, 63, iha seluk mos) garante direitu ita-nia sidadaun sira-nian, hanesan individu ka iha asosiasaun nudar organizasaun sociadade civil, atu halo no fó sai hanoin ba estadu nia orsamentu. Ne’e presiza tebes atu dokumentu orsamentu hotu fó no disponivel ba ema hotu. Ida ne’e liu-liu ba kazu proposta orsamentu, ne’ebé tenke desponivel ba sidadaun hotu, no deskuti iha konsultasaun publiku molok lejislador sira adopta. Ida ne’e sei fó benefisiu, la taka prosesu wainira konsulta ona prosesu orsamentu ho Sosiadade Civil iha nivel Ministeriu molok lori ba iha Konsellu Ministru. Ami husú ho laran-hakraik an ba Parliamentu atu husu hikas fali no proposta ba Governu halo tuir prosesu ne’e.

  2. Timor Leste iha prosesu orsamentu ida ne’ebé la efisiente, la demokratiku, ansi-liu, iha tempo badak no segredu liu. Iha buat barak mak kontribui ba hamosu kondisaun sira ne’e:

    1. Iha ne’eba la informa antis deklarasaun orsamentu tinan nian, no perparasaun, ema no lejislador ba Orsamentu Estadu nia asuntu jeral hanesan total gasta, total rendementu no deve ne’ebé sei iha durante orsamentu tinan tuir mai.

    2. Orsamentu Estadu tenke sai hanesan reflesaun ida hosi programa governu ba tinan ne’e, no ba futuru. Tenke implementa politika ba tempo mediu no ba tempo naruk ne’ebé tau ona iha Planu Dezenvolvimentu Nasionál, Relatoriu Estdu de Nasaun, no mos dokumentu importante seluk tan. Tenke iha politika no program uluk lai, ho orsamentu hodi hala’o programa no politika sira ne’e.

    3. Iha kuaze kada tinan fiskal, proposta orsamentu foun sempre ansi iha tempo semana balun deit no Parlimentu iha deit tempo oitoan atu haree no estuda orsamentu ne’e. Konsekuensia, iha ne’eba mak komunikasaun no konsultasaun ho ema peritu sira limitadu tebes. Ne’e hamosu ameasa ba kria objetivu ne’ebé labele atinzi iha orsamentu laran.

    4. Relatoriu ezekusaun orsamentu ne’e tarde (Relatoriu Trimestre primeiru fulan Janeiru too Marsu desponivel deit iha internet iha loron 23 Juñu) no dala barak labele hetan asesu nu’udar Ministeriu Finansas laiha intensaun di’ak atu desimina informasaun ba publiku. Dala barak, relatoriu ezekusaun orsamentu hatudu ona katak gasta oitoan liu, tantu bele hamosu hikas fali ami nian komentariu iha leten ne’e.

    5. Revizaun iha tinan-klaran tenke iha atulizasaun ne’ebé hatama hotu kona-ba implementasaun orsamentu, inklui revizaun ida ba prediksaun ekonomia ne’ebé hatama iha orsamentu no atuliza predisaun ba rezultadu orsamentu ba orsamentu tinan ne’e. Dokumentu hotu tenke disponivel ba iha fatin hotu.

    6. Iha ne’eba la iha fatin ida atu ema sosiadade civil bele asesu dokumentu publiku iha tempo hanesan. Sosiadade Civil no media susar tebes atu hetan dokumentu orsamentu sira ne’e: no la iha tulun hosi Sekretariu Estadu ba konsellu Ministru ka Ministeriu Finansas.

Statement ne’e perpara hosi membru Core Group Transparency. Kopia Elektronika (iha lian tetum no ingles) bele hetan hosi Sekretariadu, redetransparensia@gmail.com, ka hosi www.laohamutuk.org/econ/MYBU08/RDTLMYBU08.htm.

Oranizasaun Sosiadade Civil:
Asosasiaun Hak, ETADEP, FONGTIL, Fundasaun Ba Loos, Haburas, La’o Hamutuk, Mata Dalan Institute, Rede Feto
 

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua dos Martires da Patria, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
email: 
info@laohamutuk.org    Web: http://www.laohamutuk.org    Blog: laohamutuk.blogspot.com