The rising cost of rice in East Timor is not just a reflection of the worldwide shortage, but also of corruption and mismanagement in Dili, writes Loro Horta for ISN Security Watch.
Commentary by Loro Horta in Dili for ISN Security Watch (06/05/08)
Soaring rice prices in Asia are beginning to have an effect on the livelihoods of millions of people; even the wealthier and stable nations of the region are bracing themselves for the consequences. For East Timor, the most impoverished and one of the most unstable countries in the region, the effects of the rice crisis could be devastating.
East Timor (Timor Leste) relies on imports for nearly 60 percent of its rice needs and is therefore highly vulnerable to the slightest disruption in international food markets. The country relies heavily on imports from Thailand, Vietnam and China - countries that are now imposing export restrictions in order to cope with their own domestic consumption problems.
If East Timor is deprived of access to foreign markets the situation may be catastrophic, with widespread famine and violence likely to reach explosive portions even for a nation that is no stranger to suffering and violence.
Incompetence and irresponsibility on the part of the Dili government have increased the country's vulnerability to the volatility of international markets.
In order to maintain its fragile coalition's hold on power, Prime Minister Xanana Gusmao has decided to distribute 35 kilograms of rice every month to the country's 3,700 military and police personnel and its 17,000 public servants, while offering free daily meals to government servants and members of parliament. Significant amounts of these rice handouts have been coming from the national rice emergency stock, which is now at an all-time low.
East Timor's average annual rice consumption is between 90,000-100,000 tonnes, while the national rice stock currently stands at a just over three tonnes - less than half the desired safety level of 8,000 tonnes and just enough to feed the country for a month.
In case of an emergency, the country's poor roads and port facilities are likely to make import and distribution extremely difficult and further exacerbate shortages, putting the most remote regions at great risk.
The government rice subsidies and free distribution have in turn discouraged local business from importing the stable crop, adding another dangerous variable to the equation.
Signs of rice hording and price manipulation are already evident. In February, a 35-kilogram bag of rice sold for US$13. By April, the price had risen to US$20. In the rural areas, high transport costs resulting from the country's dismal roads has led prices there to reach US$27 per 35-kilogram bag of rice.
In a country where the minimum monthly wage is US$85 and 80 percent of the people are unemployed, the spike in rice prices could have serious humanitarian and security consequences. This raises the question: What will happen if the government is suddenly unable to provide the people - not the mention the security forces and their families - with rice?
While Dili claims that it has enough supply for a month, an official from the Ministry of Agriculture and Fisheries told ISN Security Watch that the actual amount may be substantially lower due to corruption.
There are numerous reports of minor government employees stealing rice from the emergency stock to sell on the black market or to feed their own families.
The presence of an estimated 100,000, internally displaced people (IDP) in the capital can only complicate matters. To this day, the government has not been able to provide an exact figure on the number of IDPs, speculating that it may be anywhere from 70,000 to 100,000.
More worrisome is the attribution of rice import monopolies to well-connected people, such as, in one instance, the wife of a government minister who now directs all rice imports into the country.
In order to address the problem, the country's leaders are now considering the possibility of using the fundo do petroleo (oil fund) of over US$2 billion, deposited in an American bank, to deal with the rice crisis. The oil fund was created to save money for future generations of Timorese to prevent squandering.
While using money from the oil fund may provide temporary relief, it will not address the root causes of the problem and may set a bad precedent by leading to further use of the fund money to address similar issues.
Timor's food problem, though it has its global causes as well, is also a reflection of deeper structural problems such as endemic corruption, political infighting and negligence.
Creating a better and more effective food distribution system and responsibly managing the emergency stock may be far more effective than handouts and resorting to the oil fund. Urgent investment in the agriculture sector is needed to provide the country with minimum levels of food security. If not urgently addressed, the current rice crisis will have serious consequences for a nation already marked by violence and abject poverty.
In 2007, during the serious rice shortages in the capital Dili, there were various cases in which people attacked each other for rice. There is no reason to think the same will not happen again.
Walking through one of Dili's markets I asked a Timorese vendor what he would do to feed his family if the country were to run out of rice. "Whatever it takes," he replied.
Commentary by Loro Horta in Dili for ISN Security Watch (06/05/08)
Soaring rice prices in Asia are beginning to have an effect on the livelihoods of millions of people; even the wealthier and stable nations of the region are bracing themselves for the consequences. For East Timor, the most impoverished and one of the most unstable countries in the region, the effects of the rice crisis could be devastating.
East Timor (Timor Leste) relies on imports for nearly 60 percent of its rice needs and is therefore highly vulnerable to the slightest disruption in international food markets. The country relies heavily on imports from Thailand, Vietnam and China - countries that are now imposing export restrictions in order to cope with their own domestic consumption problems.
If East Timor is deprived of access to foreign markets the situation may be catastrophic, with widespread famine and violence likely to reach explosive portions even for a nation that is no stranger to suffering and violence.
Incompetence and irresponsibility on the part of the Dili government have increased the country's vulnerability to the volatility of international markets.
In order to maintain its fragile coalition's hold on power, Prime Minister Xanana Gusmao has decided to distribute 35 kilograms of rice every month to the country's 3,700 military and police personnel and its 17,000 public servants, while offering free daily meals to government servants and members of parliament. Significant amounts of these rice handouts have been coming from the national rice emergency stock, which is now at an all-time low.
East Timor's average annual rice consumption is between 90,000-100,000 tonnes, while the national rice stock currently stands at a just over three tonnes - less than half the desired safety level of 8,000 tonnes and just enough to feed the country for a month.
In case of an emergency, the country's poor roads and port facilities are likely to make import and distribution extremely difficult and further exacerbate shortages, putting the most remote regions at great risk.
The government rice subsidies and free distribution have in turn discouraged local business from importing the stable crop, adding another dangerous variable to the equation.
Signs of rice hording and price manipulation are already evident. In February, a 35-kilogram bag of rice sold for US$13. By April, the price had risen to US$20. In the rural areas, high transport costs resulting from the country's dismal roads has led prices there to reach US$27 per 35-kilogram bag of rice.
In a country where the minimum monthly wage is US$85 and 80 percent of the people are unemployed, the spike in rice prices could have serious humanitarian and security consequences. This raises the question: What will happen if the government is suddenly unable to provide the people - not the mention the security forces and their families - with rice?
While Dili claims that it has enough supply for a month, an official from the Ministry of Agriculture and Fisheries told ISN Security Watch that the actual amount may be substantially lower due to corruption.
There are numerous reports of minor government employees stealing rice from the emergency stock to sell on the black market or to feed their own families.
The presence of an estimated 100,000, internally displaced people (IDP) in the capital can only complicate matters. To this day, the government has not been able to provide an exact figure on the number of IDPs, speculating that it may be anywhere from 70,000 to 100,000.
More worrisome is the attribution of rice import monopolies to well-connected people, such as, in one instance, the wife of a government minister who now directs all rice imports into the country.
In order to address the problem, the country's leaders are now considering the possibility of using the fundo do petroleo (oil fund) of over US$2 billion, deposited in an American bank, to deal with the rice crisis. The oil fund was created to save money for future generations of Timorese to prevent squandering.
While using money from the oil fund may provide temporary relief, it will not address the root causes of the problem and may set a bad precedent by leading to further use of the fund money to address similar issues.
Timor's food problem, though it has its global causes as well, is also a reflection of deeper structural problems such as endemic corruption, political infighting and negligence.
Creating a better and more effective food distribution system and responsibly managing the emergency stock may be far more effective than handouts and resorting to the oil fund. Urgent investment in the agriculture sector is needed to provide the country with minimum levels of food security. If not urgently addressed, the current rice crisis will have serious consequences for a nation already marked by violence and abject poverty.
In 2007, during the serious rice shortages in the capital Dili, there were various cases in which people attacked each other for rice. There is no reason to think the same will not happen again.
Walking through one of Dili's markets I asked a Timorese vendor what he would do to feed his family if the country were to run out of rice. "Whatever it takes," he replied.
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