The Alarming Nature of Corruption in Timor-Leste

Despite government efforts, corruption remains prevalent in Timor-Leste, draining economic gains.

By Jonas Guterres
April 07, 2017

Corruption is a complex global problem that creates high obstacles to sustainable and prospective development and impairs the social, political, and institutional condition of a nation. Generally speaking corruption is understood, in Transparency International’s words, as “the abuse of entrusted power for private gains.”

Timor-Leste, a country that regained its independence less than two decades ago, has made significant efforts in the quest to fight corruption by establishing an Anti-Corruption Commission (CAC) within a legislative framework. However, success in combating corruption is still far from the general expectation when we consider the glaring injustice of poverty in the country.

Indeed, within Timor-Leste there is widely perceived to be a high level of corruption. According to the findings of a Corruption Perception Survey commissioned by CAC in 2015:

The biggest problems in Timor-Leste are unemployment (62.6 percent), poverty (49 percent) and corruption (17.6 percent). However when asked specifically about severity of corruption, 77 percent said that corruption is a serious problem in Timor-Leste. Further, corruption, nepotism, and cronyism are present at various levels of government administration with leading cause[s] of [a desire to] get rich fast (60.6 percent), followed by low wages of officials (39.2 percent) lack of ethics (36.2 percent), and poor anti-corruption low enforcement (27.5 percent).

Historically, some Timorese have sought to identify corruption as “a foreign import or legacy of occupation” from its former colonizers, Indonesia and Portugal (for more on this, see Aderito de Jesus Soares’ Combating Corruption: Avoiding “Institutional Ritualism”). It is true that corruption, both institutional and informal, involving civil and military personnel was rampant at all levels of society during the Indonesian occupation. But corruption didn’t stop with the occupation.

After the restoration of independence, many resistance leaders became leaders of public sector institutions, not because of their educational qualifications, professional experience, and knowledge of how to run a democratic institution properly, but because of their past credentials during the resistance era. Some tried to adjust to their new roles and responsibilities, while others, retaining the mindset of the resistance period, tended to overlook procedural rules and legal standards and instead use their discretionary power.  This phenomenon, and the broader challenge which leaders face in transitioning from clandestine to institutional politics, has been seen in a number of other post-conflict countries.

A culture of gift-giving is part of the traditional norms of Timorese society, accepted as a way of thanking people for their help. There is no specific expression equivalent to “thank you” in Timorese languages, not even in the national language, Tetum: the word “obrigado/a”, used to express thanks, is borrowed from Portuguese.  This traditional gift-giving practice, however, potentially becomes corruption when it intersects with the operation of a modern democratic political and administrative system intended to embody good governance, of the type that Timor-Leste adopted in its 2002 Constitution and firmly believes in.

The pervasiveness of family connections and networks within Timorese society also tends to create a lax attitude, with people somehow becoming tolerant of corrupt practices. When someone holds a higher office, be it in the public or private sector, there is a strongly felt obligation to take care of “our family,” “our networks,” or look after “our people,” encapsulated in the Tetum expression “Ita nia Ema.”  Decision-makers indirectly favoring one potential contractor over the others in a tendering process often evinces this sentiment. Further, potential contractors, high-level officers, and junior staff, all of whom try to benefit from corruption, share in the ill-gotten gain. For example, as a kickback for a particular tender award from Timorese or foreign companies, high-level officers may get massive bonuses, and junior staff may get fancy gifts for assisting with administrative work.

Regarding respondents’ perceptions of Timor-Leste’s corruption offenders, the 2015 CAC survey found that:

58 percent [of] the respondents believe that acts of corruption are mostly committed by those who hold power, and 13 percent believe that corruption is mostly committed by government officials. Further, the perception survey reported that corruption exists in all Timor-Leste’s sovereign bodies, with the highest prevalence considered to be in government.

The Sixth Constitutional Government under the leadership of Prime Minister Dr. Rui Araújo has to its credit undertaken some breakthrough initiatives to tackle corruption in four key areas: public administration; fiscal reform; economic reform; and legislative and judicial reform. These initiatives were steps along the right path, but have not so far served significantly to tackle corruption effectively.

The 2016 Corruption Perception Index (CPI) by Transparency International ranked Timor-Leste as 101st out of 175 countries, with a score of 35 on a scale from 0 (high corruption) to 100 (very clean). Timor-Leste shared its position with two other ASEAN countries, Thailand and the Philippines. The country made a significant leap in the rankings, from 132nd in 2015 to 101st in 2016; however in absolute terms its ranking still amounts to a poor performance, as demonstrated by high-profile corruption scandals, everyday corruption issues, political interference in the judicial system, and weak enforcement of the rule of law. Further, 46.5 percent of respondents in the 2015 CAC survey reported that they considered corruption to be more prevalent and increasing in the preceding two years.

Corruption is especially grave in the public financial management sector, with increasing apprehension about dependence on the financial inflows from oil extraction. While oil revenues have allowed the government to invest in much-needed and indispensable infrastructure and human development initiatives, they have also created opportunities for corruption and administrative malpractice. These have been reflected in the increasing number of high profile corruption cases involving politicians and government office-holders being brought before the courts in recent years, with defendants including a former minister of justice, a former minister of education, a former minister of finance, and a former vice minister of health.

A major focus of the government budget in the last two years has been infrastructure development, primarily roads, electric power, and two “megaprojects”: the Suai pipeline, and the establishment of a Special Economic Zone in the Oecussi enclave (ZEEMS).  Experience in other parts of the world strongly suggests that such megaprojects have the potential to give rise to lucrative contractual deals between political elites and their clients, which can have a huge effect on budget bottom lines, often associated with a lack of oversight, lack of transparency, corruption, and bribery.

Timor-Leste is an oil dependent country, and the “resource curse” remains a source of concern.  Oil revenue can contribute significantly to sustainable and prospective development. However, low institutional capacity, poor accountability and transparency mechanisms, weak political will, and uneven law enforcement potentially creates excessive rent seeking, thus fueling large-scale corruption, rampant poverty, unemployment, and economic stagnation. These effects have particularly troubling implications for economic diversification and the long-term sustainability and development of non-oil sectors.

For now, given the severity of the issue, tackling corruption should be one of the top priorities of the new government to be formed following parliamentary elections later in the year. Based on the surveys cited above, parties that focus on the issue of corruption will be likely to collect a significant share of the vote.

Tackling corruption effectively will require firm political will, a comprehensive policy framework and anti-corruption law, competent human resources and leadership, adequate resources, and active engagement from various stakeholders.  To echo the slogan of resistance, “A luta continua” — the struggle continues.

Jonas Guterres is an anti-corruption practitioner. He is former Advisor to Office of Commissioner at Anti-Corruption Commission of Timor-Leste (CAC), and former recipient of United States Timor-Leste (USTL) scholarship funded by the State Department.