PRESS RELEASE: Luta Hamutuk’s Opinion toward State General Budget Proposal 2012.

Luta Hamutuk in this opportunity would like to convey its appreciation as well as opinion toward State General Budget 2012, which have been submitted already by the government toward National Parliament on September 30th 2011. Within this proposal expenditures is written around US$1,763.4 million, almost 2 Billions if compared with  annual budget of 2011, which only estimated around US$1,306 million. This budget within for this specific year considered as significantly increasing around 35% if compared with 2011.  It is assumed that such huge of budget, will become truly significant if this also be able to resolve national problem which have been encountered by people, therefore we will wait for the impact from such budget.

Based on our monitoring and observation activity in districts as well as villages and sub-villages, different preoccupations were raised in respect of budget in 2011, and mostly within dissatisfaction toward the impact of budget among communities. We already knew that budget have been regularly increasing every year since 2006 and haven’t been able to resolve problem such as poverty. Unfortunately, this condition  becoming worst among the poor who consider as majority in its number, while other small of groups becoming more wealthy each day. Recently, preoccupation and situation have been showed obviously that, food prices are expensive and couldn’t be afford by people, lack of facilities such as water and sanitation, public transportation cost becoming high, lack of facilities within schools, less function within health post, mini-market haven’t been use  properly as there wasn’t any good of plan upon such facility, insufficient condition of irrigation and people’s housing still below the standard of the objective of Millennium Development 2015. Ironic, while such huge of budget being allocated to develop nation, however it is fail to change the situation and people still have to encounter with difficulties on daily basis.

Based on this fact, and through this press release, Luta Hamutuk would like to strongly remain state entities that, the addition of number within budget proposal 2012 which up to 35% should accompanied by the estimation of its direct impact toward people, its quality of execution and project, effective control, transparency and should be based on certain law in its implementation. We couldn’t just let such money from Petroleum Fund would only benefit toward certain group while the majority of people still struggle for their daily life.

If we observe on the addition process of budget since 2006 (US$328.6 million) until 2012, the percentage has reach 500%, during 7 years. Actually, such huge of budget should have been able to show its implication and changes within people’s life. However, reality shows as well that, basic problem and basic needs of the people haven’t been able to resolve.

In relation with the State General Budget Proposal 2012, Luta Hamutuk would like to convey its general appreciation and opinion as well, like the following:

1.    Execution report of buget had never been accompanied by a standard or platform which should to attempt by the government: ask the government to provide execution report of budget along with its indicators which have been already attempted, therefore been able to accompanied in respect of its impact toward people’s neccesities in the future.

Based on monitoring which had undertaken by Luta Hamutuk, this could finally discover that the execution report of budget always shows only on the number of expenditures, and never accompanied by explanation of standards being attempted, also without indicator and measurement toward its implication on people’s life.

Therefore, we ask the government, prior to submit new proposal of budget, they should convey execution report of budget along with its standard and indicators which should to attempt. Without such explanation, it will be difficult for us to understand the progress from such investment of budget. We will never know on the impact from budget which have been used by the government, changes which people have been experienced from such investment and future of plan aim to accomplish prior investment. Instead, we only comprehen that the implication is that, the allocation of such budget is increasing every year, however people have never been experience its benefit.

2.    The Proposal of Budget 2012 have been taken over Estimation of Sustainibilty Income (ESI) 3% from Petroleum Fund: within the proposal of budget 2012, the government had taken this budget over Estimation of Sustainibilty Income ESI, around US$908 million.

Based on ESI 3%, the government is allowed to take around US$665,3 million, however this number had increased up to US$1,573.3 billion. This signify that the government had showed indiscipline in utilizing Petroleum Fund in a proper manner. Timor Leste has strong indication to be totally depend on oil and gas sector, as 90% of state income is coming from Petroleum Fund. Such figures or performance have been practiced since 2008 to date, and affected already on the sustainability and the existence of petroleum fund.

Luta Hamutuk remind state bodies that, if in-discipline is maintained being practise toward the utilizing of Petroleum Fund, such fund will be in trouble in coming short period of 15 -20 years. In addition, the investment which recently being implemented had considered as below certain standard and in the future this condition will need huge of maintenance cost, as consequence this country will colaps.

3.    People’s basic necessity should become the highest priority: proposal of budget 2012 don’t show significant allocation toward people’s basic necessities.

This year, food prices are consider high and can’t be afforded by people which cost in hunger epidemic. Meanwhile, water and electricity become as important priority and obligation to be resolved immediately. We can’t just let the people waiting until they really suffer from mal-nutrition, mal-hygiene and long live in poverty, while money have been constantly coming from their natural sources of oil and gas and have been reached almost US$9 billion.

The state has huge of income from oil and gas sector, and during the past 4 years have been taken such budget over ESI 3%, however this haven’t been able to improve people’s condition of life, the problem never being resolved and the poor condition of the people now just like a good song for their own leaders.

4.    The Number of Budget 2012 do not Reflect the Capacity of the Government: execution within 2011 had showed incapacity within government, therefore irrational if they would take more budget for 2012.

Based on observation as well as analysis toward actual execution 2011, from January-October, the government have only been able to execute around US$712 (55%) million from US$1,306 billion of total budget. Therefore, there are still around US$594 million (45%) to be executed by the government within only two months. Such flaw within the execution capability will burden the government if budget is being added for 2012.

Luta Hamutuk would like to stated that, such addition around 35% for 2012 aim to resolve certain problem encountered by the community, is needed for reorganizing as well as discipline among ministries to be able to implement strategic projects under its own departments. Meanwhile, synergistic and integral of services should to practice between ministries, therefore able to attempt state expectation. This needed as well adequate coordination of mechanism, cooperation with local authorities within controlling process, facilitate access for contracts document, and the ministries should to comply with orientation given by the head of government therefore, people will benefit from such development.

5.    Luta Hamutuk reject loans of plan within proposal of budget 2012, which estimated around US$33,1 million: there insn’t any strong of reason for the government to take a loan when budget still sufficient in number to undertake development.

Based on incapacity among the government to execute budget properly, and the quality of implementation, we think that the government shouldn’t make situation more complicated, especially in respect of state general budget. We ask the government to focus on the existence of budget therefore people could benefit from it, while give opportunity as well toward government to improve its execution capability.

An intention of the government to take a loan even in small number and using Petroleum Fund as a guarantee, will prejudice government’s concentration, in addition if control system do not practice properly, this will affecting future generation and ended with country’s dependency on international debt which can bring this country to be collapse as current good system of petroleum fund and others financial system have been constantly violated by the government.

Thank you for your attention!

Dili: October 12nd, 2011

Mericio Akara

Director of Luta Hamutuk

Tel: 7263783

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