The 'Rice-Gate' Scandal: Impact of Corruption on Political Stability
17 Aug, 2009 · 2946
Anna Louise Strachan looks at the recent spate of corruption scandals in Timor-Leste
Not for the first time since his appointment as Prime Minister, Xanana Gusmao is facing allegations of corruption. The latest charges accuse the former guerilla leader of giving a lucrative government contract for the importation of rice to Prima Foods last year, a company in which his daughter has an 11.1 per cent share. Prima Foods was one of 17 companies awarded such a contract in 2008. Several of the other companies awarded contracts for the importation of rice are reported to be part-owned by Kathleen Goncalves, the wife of the Minister of Economic Development, Joao Gonclaves. Other inconsistencies related to the contracts, including questions about how much rice was actually imported and price amendments following the signing of the contracts, have served to exacerbate the issue. The scandal has been dubbed ‘Rice-Gate’ and comes just a year after the government caused controversy by announcing its intention to withdraw an extra US$290.7 million from the country’s Petroleum Fund to cover its budget deficit. The proposed withdrawal raised concerns about the government’s handling of public funds. The government’s decision in July 2008 to purchase luxury cars for all parliamentarians also caused resentment in a country with an average GDP per capita of US$400.
Gusmao is not the only high ranking official to have been tainted by scandal over recent months. Officials working in the Ministry of Planning and Finance have been surrounded by controversy over Minister Emilia Pires’s hiring of foreign advisors. Those hired for the World Bank funded positions were under qualified and evidence has come to light suggesting that some of those hired were Pires’s personal friends. Corruption has also infiltrated the Ministry of Justice. Over the last month there have been calls for Timor-Leste’s Minister of Justice, Lucia Lobato, to face prosecution. Lobato is involved in a scandal which revolves around her collusion with a friend to secure a US$1 million contract for the reconstruction of a prison wall in Dili at the end of last year. The Ministry of Tourism, Trade and Industry is also being investigated.
A worrying trend has emerged in Timor-Leste. Senior officials have been using their positions for personal gain. They have engaged in corruption and nepotism, knowing that the legal system is unlikely to bring them to justice. Although the Prime Minister promised to establish an anti-corruption commission in 2008, progress in this department has been slow and the commission is not yet functioning properly. It remains to be seen whether he himself will stand before the commission to answer questions regarding ‘Rice-Gate’. Gusmao has been reluctant to answer questions on the scandal, insisting that his actions did not amount to wrongdoing. President Jose Ramos-Horta has admitted that Timor-Leste has a corruption problem, but denies that senior officials, including the Prime Minister, are involved.
The implications of the ‘Rice-Gate’ scandal are manifold. There can be no doubt that the actions of the government are seriously compromising the fragile political stability of the state. Senior officials in almost all sectors of government have been tainted by allegations of corruption and faith in the government’s ability to lead the country is waning. Moreover, the government has displayed authoritarian tendencies of late, resorting to oppression as a means to combat opposition and discontent. As a result, speculation about how long the government can survive in light of the recent spate of scandals is rife. Concerns over some of the opposition party’s, Frente Revolucionária do Timor-Leste Independente (FREITILIN), tactics have also been raised, but the party’s strong anti-corruption stance is seen as being positive.
‘Rice-Gate’ has not been the only story making the headlines in Timor-Leste. The trial of those involved in the attempted assassination of President Jose Ramos-Horta commenced last month. Those accused of plotting to overthrow the government include a group of former soldiers who had previously been involved in anti-government demonstrations and Angelita Pires, an Australian citizen, who was having a relationship with Alfredo Reinado, the rebel leader killed during the attack. The trial, which is expected to stretch over several months, could further destabilise the already fragile political situation in the country.
It is clear that Timor-Leste’s political stability is at risk. It is essential that the Timor-Leste government takes immediate and decisive action to combat corruption. All allegations must be investigated by an independent corruption commission and those found guilty of the misuse of funds and of nepotism must be prosecuted. Moreover, the government must rule out the use of oppressive measures to contain opposition and discontent. If democracy is to flourish in Timor-Leste, FREITILIN must continue to serve as an effective opposition, pursuing justice via legitimate means. They must not resort to underhand tactics to bring about the fall of the current government.
Gusmao is not the only high ranking official to have been tainted by scandal over recent months. Officials working in the Ministry of Planning and Finance have been surrounded by controversy over Minister Emilia Pires’s hiring of foreign advisors. Those hired for the World Bank funded positions were under qualified and evidence has come to light suggesting that some of those hired were Pires’s personal friends. Corruption has also infiltrated the Ministry of Justice. Over the last month there have been calls for Timor-Leste’s Minister of Justice, Lucia Lobato, to face prosecution. Lobato is involved in a scandal which revolves around her collusion with a friend to secure a US$1 million contract for the reconstruction of a prison wall in Dili at the end of last year. The Ministry of Tourism, Trade and Industry is also being investigated.
A worrying trend has emerged in Timor-Leste. Senior officials have been using their positions for personal gain. They have engaged in corruption and nepotism, knowing that the legal system is unlikely to bring them to justice. Although the Prime Minister promised to establish an anti-corruption commission in 2008, progress in this department has been slow and the commission is not yet functioning properly. It remains to be seen whether he himself will stand before the commission to answer questions regarding ‘Rice-Gate’. Gusmao has been reluctant to answer questions on the scandal, insisting that his actions did not amount to wrongdoing. President Jose Ramos-Horta has admitted that Timor-Leste has a corruption problem, but denies that senior officials, including the Prime Minister, are involved.
The implications of the ‘Rice-Gate’ scandal are manifold. There can be no doubt that the actions of the government are seriously compromising the fragile political stability of the state. Senior officials in almost all sectors of government have been tainted by allegations of corruption and faith in the government’s ability to lead the country is waning. Moreover, the government has displayed authoritarian tendencies of late, resorting to oppression as a means to combat opposition and discontent. As a result, speculation about how long the government can survive in light of the recent spate of scandals is rife. Concerns over some of the opposition party’s, Frente Revolucionária do Timor-Leste Independente (FREITILIN), tactics have also been raised, but the party’s strong anti-corruption stance is seen as being positive.
‘Rice-Gate’ has not been the only story making the headlines in Timor-Leste. The trial of those involved in the attempted assassination of President Jose Ramos-Horta commenced last month. Those accused of plotting to overthrow the government include a group of former soldiers who had previously been involved in anti-government demonstrations and Angelita Pires, an Australian citizen, who was having a relationship with Alfredo Reinado, the rebel leader killed during the attack. The trial, which is expected to stretch over several months, could further destabilise the already fragile political situation in the country.
It is clear that Timor-Leste’s political stability is at risk. It is essential that the Timor-Leste government takes immediate and decisive action to combat corruption. All allegations must be investigated by an independent corruption commission and those found guilty of the misuse of funds and of nepotism must be prosecuted. Moreover, the government must rule out the use of oppressive measures to contain opposition and discontent. If democracy is to flourish in Timor-Leste, FREITILIN must continue to serve as an effective opposition, pursuing justice via legitimate means. They must not resort to underhand tactics to bring about the fall of the current government.
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