Money for work in East-Timor

By Mike Parker

Mike Parker has worked in the Humanitarian Aid and Development sector for nearly ten years. He has worked in a number of roles ranging from working with grass roots education groups in southern Africa in the early nineties to larger scale government health and finance programmes. This article arises from Mike's experience in East Timor from May to November 2000.

In the last 500 years East-Timor has been invaded by the Portuguese, Japanese and Indonesians. The final period of colonisation involved a genocidal campaign of terror orchestrated by Indonesia. The west turned a blind eye to the invasion and repression in East- Timor. Out of a population of approximately one million an estimated 250,000 people were murdered over a twenty-five year period.

Surharto's regime did little to develop East- Timor, continuing the Portuguese policy of exploitation. The regime built roads to help plunder the country of its teak and coffee. In the 80's large deposits of oil were found in the Timor Gap, the stretch of water that separates East-Timor from Australia. This attracted the attention of a circling pack of western interests.

In late 1999, to prevent further atrocities by Indonesian backed militias and assist the people of East-Timor in defending the outcome of their referendum, in which the people of East-Timor chose independence, the UN intervened primarily with the use of Australian peacekeepers.

Reconstruction begins

The money for work programme in East Timor in which I was recently involved, was funded directly by the US government via USAID and as such represented a change in policy, in that much of USAID's assistance in other parts of the world is usually in the form of loans and technical aid. It was anticipated that the positive spin-offs of this project would be:

1. The promotion of the US dollar over other currencies that were likely to replace the Indonesian Rupiah i.e. the Australian dollar
2. A reduced risk of inflation and resulting instability in the economy by virtue of introducing a strong currency
3. An enhanced ability for East Timor to continue trading by virtue of having a hard currency, thus providing a comparative advantage with their nearest trading partner i.e. Indonesia.

My own role as one of 12 UN finance/procurement officers meant being the contact point at district level for these funds. Our function was to collect the money, distribute it, account for it, create budgets with the project co-ordinator, provide a narrative of the project and supervise the work groups with the various project managers. The scheme was known locally as the 'Temporary Employment Project' or TEP's.

The scheme was a challenge in many ways. Although similar to 'Food for Work' in providing a way to stimulate reconstruction, it was different in that it gave beneficiaries at the micro-economic level control over the development of the market, i.e. the spending decisions that determine the relative price of goods and items produced.

Cash dash - The author on a cash collection flight on board of a Puma with a Russian Federation crew and an Australian peace-keeper escort.

TEP's started in April 2000 and were launched by a campaign over the radio, in newspapers and on public notice boards. Therefore, when the work started in May 2000 there was at least some knowledge out in the communities, as was witnessed by the large numbers of people that turned up at various UN district offices looking to join work groups.

Of course, there were questions concerning the work and how people were to be paid, particularly with regard to payment in US Dollars. We made pay-day every Saturday. The decision to pay on a weekly basis in our district was taken with local partners. It meant that:

1. There was regular reinforcement / familiarisation with the US currency.
2. We had contact with people doing the work so got to know their problems quickly (e.g. if there were not enough tools and supplies to complete the job within the time-frame). Furthermore, it helped to develop a relationship between the UN and people in East-Timor. We became familiar with many of the local chiefs and headmen and were able to talk about the work at project sites. It also meant that we were able to monitor the progress of the work against plans that we had submitted to US AID in Dili prior to grant allocation.
3. The money went into the community as soon as possible and did not sit in our safe. We believed that it was advisable to pump money in quickly to ensure rapid re-construction and re-establishment of trade. This did happen visibly, with the local markets growing and attracting more traders, although it was difficult to measure the volume increase and to gauge the relationship of TEP's to this increase.
4. Each payment meant that we held less money and therefore were potentially less of a target. Fortunately, no insecurity was experienced as a result of holding or distributing the money. The movement of money around to various sites where groups were working was a security concern. At first people came into town to collect their pay, but due to (a) large groups, milling around waiting to be paid and (b) the need to gain a better idea of the work that was going on, we decided, where possible, to pay at the sites. This did decrease tension, allowing us to see the work on a regular basis and therefore monitor progress against the project plan. Occasionally, it was necessary to hold back money, where it was clear that no work or very little work had been done. This never happened without discussion as to why we were taking this action.

Fish market in East Timor, 2000

TEPs - The work itself

Most of the work centred around the town and the reconstruction of various community structures, which had been damaged by fighting and neglect, but did not include UN occupied buildings - although the distinction was sometimes blurred. A great deal of the work involved road maintenance and clearing the metre deep gutters essential to direct run-off away from the roads so as to prevent further road erosion. Most of the roads had been left in a state of neglect by the Indonesian authorities. The local hospital was rehabilitated, as was the health clinic in Betano. A workshop was opened-up and work commenced on a dilapidated fish farm.

Pay differentials

Some of the workers were skilled and therefore paid at a higher rate. We also paid the supervisor at a slightly higher rate. All these rates were set by USAID. For example, a worker received $3.21 per day, a supervisor and skilled worker $4.17 and a manager $6.00.

Women's groups

It was important to ensure that women were included in the scheme. They therefore had their own groups, most of which were involved in community rehabilitation works like the health clinic in Betano and the community centre in Same. One criticism of the programme was the limited number of women's groups and the scope of their work. Of the forty or so work groups only 5 were women's groups. Furthermore, it seems that some of the women would then hand their money over to their husbands, but we had no real information on the distribution of this money and what it was spent on or what difficulties might have arisen.

Strengths of the programme

The US dollar stability added strength to the East- Timor economy. It allowed for a continuation of trade in favour of the East-Timorese economy as desperate Indonesian traders sought security in dollars. With the introduction of the dollar inflationary pressures were experienced by those holding Indonesian Rupiah. The Australian dollar, a possible alternative to the US dollar was also experiencing problems with a 5% loss in value against the US dollar over a 6 month period. Thus, those holding US dollars were able to gain as they traded US dollars against Rupiah and the Australian dollar. But this only benefited those who were working and being paid in US currency.

The money was easier to store and handle than a warehouse of consumables and therefore needed less resources in order to support - just myself, a couple of armed police officers, a safety deposit box and transport. This contrasted with a food aid programme using, for instance, rice or wheat which would have to be transported along treacherous roads that were often impassable. Also, such foodstuffs would need careful storage so as to prevent spoilage.

Weaknesses of the programme

Limited time for programme implementation stipulated by donors created problems of effective monitoring, as the project had a start date of April 2000 and a finish date of September 2000. Although all parties had the desire to see the money 'out there' as soon as possible, the time-frame was a factor that led us to centralise much of the work near the local district centre. As a result, the sub-districts were less well served - something we rectified with subsequent tranches of money, with the sub-districts being given priority.

On occasions, there was nothing to buy i.e. not even rice, due to crop failure that had in part been due to the forced internal displacement of people around the country. Large areas of previously cultivated land remained unused and much of the irrigation infrastructure was in need of substantial rehabilitation. Furthermore, not all sub-districts were 'money' oriented, relying more on barter and subsistence farming. In the latter stages of the TEPs this was taken into account so that 'food for work' schemes were established alongside TEPs in those areas where there was a greater need to provide basic foodstuffs rather than cash, e.g. in Aileu, some 50kms south-east of Same.

Opportunities created by the programme

Savings and investments by individuals and government and the development of cross-border trade.

Programme Threats and Concerns

1. Possible armed robbery, which although always a threat never actually occurred, probably due to the high degree of honesty amongst the East-Timorese and the presence of large numbers of police and troops to provide escorts.
2. Misinformation concerning the dollar i.e. the idea that the US dollar would suffer a similar fate to that of the Portuguese Escudo which experienced a loss of value that led to people's savings being wiped-out 'overnight.'
3. Irregular supplies of dollars - this never actually occurred but was a concern.