VZCZCXRO7130
OO RUEHCHI RUEHCN RUEHHM
DE RUEHDT #0061/01 0571000
ZNR UUUUU ZZH
O R 261000Z FEB 08
FM AMEMBASSY DILI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3881
INFO RUEHLI/AMEMBASSY LISBON 1026
RUEHBY/AMEMBASSY CANBERRA 1139
RUEHWL/AMEMBASSY WELLINGTON 0923
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHPB/AMEMBASSY PORT MORESBY 0048
RUEHKO/AMEMBASSY TOKYO 0838
RUEHUL/AMEMBASSY SEOUL 0017
RUEKJCS/SECDEF WASHDC
RHHMUNA/USPACOM HONOLULU HI
RHEHAAA/NSC WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEHBK/AMEMBASSY BANGKOK 0863
RUEHDT/AMEMBASSY DILI 3307

UNCLAS SECTION 01 OF 03 DILI 000061 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS;BANGKOK PASS A/S HILL AND DAS MARCIEL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL TT
SUBJECT: TIMOR-LESTE 2/11: FOURTEEN DAYS LATER 
 
 
DILI 00000061  001.2 OF 003 
 
 
Summary 
 
------- 
 
 
 
¶1. (SBU) Two weeks after the shooting of President Ramos Horta 
and the apparent attempted assassination of Prime Minister 
Gusmao, Timor-Leste remains calm but fragile.  In contrast to 
past political crises, Timor's governing institutions have 
functioned well in meticulous observance of the constitution and 
law.  Instead of fighting each other, the military and police 
reunited in an effort to track down the February 11 attackers. 
But the perpetrators remain at large and heavily armed, and the 
rumors and conspiracy theories regarding the events of 2/11 
continue to spiral, adding to a sense of instability and 
uncertainty.  The prime minister both privately and publicly has 
conveyed his strong determination not only to bring the 
attackers to justice, but also to deal quickly and effectively 
with the military "petitioners" and the IDPs to generate 
stability and an environment for economic growth.  The political 
risk associated with Timor-Leste tragically rose on February 11, 
and things could still get worse, but the U.S. must maintain our 
commitment to this young democracy.  Indeed, given the PM's sure 
hand after February 11 and the determination of this government 
to improve public services and create conditions for economic 
and social development, we encourage strengthening our 
engagement.  End Summary. 
 
 
 
[Note:  This cable is a sanitized version of a report that we 
were unable to transmit on February 25 due to equipment failure. 
End Note.] 
 
 
 
The Good News 
 
------------- 
 
 
 
¶2. (SBU) During the spring 2006 crisis, virtually all of 
Timor-Leste's governing institutions collapsed.  The police and 
military violently imploded into an internecine feud; senior 
officials fled their posts or far worse; the Prime Minister 
ignored constitutional provisions and declared a state of 
emergency with no ministerial or parliamentary consultation, 
backdating the implementing decree when it was finally drafted 
several days later.  In stark contrast, the current government 
in its response to the February 11 events has been meticulous in 
following the constitution and law.  The Prime Minister, 
demonstrating great personal courage, and his ministers quickly 
convened the appropriate councils after the attacks of February 
11, consulted with parliament, spoke to the public, and 
implemented proportionate measures in response.  There has been 
a strong consensus across the political spectrum in support of 
the government's actions to date. 
 
 
 
¶3. (SBU) Further, President Jose Ramos-Horta steadily recovers 
in a Darwin hospital.  Dili and the remainder of the country 
have remained remarkably calm, with even petty crime falling to 
record lows.  The state of siege that temporarily suspended the 
rights of assembly and demonstration, a dusk-to-dawn curfew, the 
continued presence of 1500 UN police, and a surge of 200 
Australian troops (adding to the 850 already present) 
unquestionably contributed to keeping the peace.  But so have 
Timorese actions.  The local military and policy, formerly 
deadly rivals, have formed joint operational command to capture 
the February 11 perpetrators.  All in all, the performance of 
the Timor-Leste government has been laudable. 
 
 
 
And, the bad news 
 
DILI 00000061  002.2 OF 003 
 
 
 
----------------- 
 
 
 
¶4.  (SBU) Between seventeen and thirty men that participated in 
the 2/11 attacks remain at large and heavily armed.  The effort 
to capture them could be prolonged or go badly.  As days pass 
without their arrest, the confidence of the public in the 
ability of the local or Australian forces to bring them to 
justice is undermined, especially in Timor-Leste where taking to 
the hills and staging an armed resistance is a revered national 
vocation.  The actions of the military, both by the close 
protection unit assigned to the president and by its leadership 
in the aftermath of the 2/11 events, again raise serious 
questions regarding the military's coherence, discipline, and 
ability to modernize.  Finger pointing among the political 
leadership regarding security failures on 2/11 is rampant, as is 
the generation of conspiracy theories to explain the attackers' 
motives and identify their supporters.  Major Reinado, the rebel 
leader killed on February 11, enjoyed considerable popularity 
particularly in the western part of Timor and among unemployed, 
disaffected youth in Dili - how his legacy and that of his death 
play out once the emergency is over remains to be seen. 
 
 
 
¶5. (SBU)  More broadly, the 2/11 events, the extended state of 
emergency, the sense of insecurity and instability - all these 
can only further harm Timor-Leste's reputation and raise its 
political risk to potential, much-needed investors.  The 
unresolved crisis threatens to distract the PM and his cabinet 
from other immediate priorities stemming from Timor's last major 
crisis in 2006, such as resettling the IDPs and resolving the 
issues surrounding the military "petitioners," with whom Reinado 
was once aligned.  Promising efforts aimed at political 
reconciliation among ruling and opposition parties, and among 
key political leaders, to end their endless bickering - cited by 
many Timorese as a major source of instability - were stalled 
when their architect, Jose Ramos Horta, was shot.  Finally, the 
government faces the urgent task of improving its delivery of 
public services and investment, and tackling the enormous 
challenge of creating jobs and boosting economic growth. 
Timor-Leste remains an exceptionally poor country, with razor 
thin managerial capacity; astonishingly high unemployment/child 
mortality/illiteracy rates; soaring youth unemployment; 
explosive demographics as the population grows by 4% annually; 
breathtakingly poor infrastructure; inadequate rule of law and 
incomplete property rights; and, except for oil and coffee 
exports, no meaningful connection to the regional or global 
economy. 
 
 
 
U.S. support welcomed 
 
--------------------- 
 
 
 
¶6.  (SBU) According to Prime Minister Gusmao, President Bush's 
rapid condemnation of the attacks gave him and the country 
strong moral support.  In this vein, we should continue to 
assist the GOTL in dealing with the present crisis, especially 
to keep its focus on resolving the two immediate sources of 
political instability, the petitioners and the IDPs.  The Prime 
Minister reassuringly told us on February 25 that he had three 
priorities: bringing the armed men that attacked the president 
to justice, moving quickly to resolve the petitioners' 
grievances, and resettling the IDPs. 
 
 
 
Time for increased U.S. engagement 
 
---------------------------------- 
 
 
 
DILI 00000061  003.2 OF 003 
 
 
 
¶7.  (SBU) As we have in the past, the U.S. also should stand 
ready to provide tangible assistance.  The quick assignment of 
three FBI agents to Dili last week to assist in the criminal 
investigation of the February 11 attacks received universal 
praise from among Timor's leadership (and newspaper headlines 
with what seemed to be 100-point fonts).  Locally, we just 
launched two USAID programs that address causes and consequences 
of the 2006 crisis.  One, designed to extend full property 
rights, will tackle both a key issue to resettling the IDPs and 
put into place the basis for a sound investment environment. 
The other will provide job skills and employment to thousands of 
youth in the districts.  But much more can be done.  We strongly 
encourage the Millennium Challenge Corporation to engage as 
expeditiously as possible with GOTL to improve policy 
performance and negotiate a compact (building out the national 
road network is a compact possibility; if undertaken, it would 
have vast economic benefits, including for Timorese farmers 
currently unable to bring their produce to market, and create 
much needed employment).  We look forward to working with S/CRS 
and PACOM in developing a U.S. contribution to resettling IDP 
camp members, perhaps in the form of housing.  We are poised to 
increase our engagement with Timor's security institutions to 
support their professionalization.  Finally, we urge the Peace 
Corps not/not to terminate their program - to do so now would be 
a sharp, gratuitous blow to the Timorese leadership that would 
needlessly undermine their confidence in the U.S. commitment 
(note: in my first meeting with the PM and Foreign Minister last 
August, both had a quick resumption of the Peace Corps program 
at the top of their agenda). 
 
 
 
¶8.  (SBU) The events of February 11 tragically reminded us of 
the frailty of the Timorese democratic experiment.  The risk of 
collapse rose that day, as did the specter of a failed state 
sandwiched between our ally Australia and partner Indonesia. 
Fortunately, Timorese institutions held on February 11, although 
this is not necessarily a reliable predictor of future behavior. 
 It is in our interest, therefore, to support those leaders 
seeking to steer this country towards a democratic, peaceful and 
prosperous future.  Together with Timor's democratic partners 
and the UN, we must step up our engagement to support these 
goals, and use our resources most effectively across the board 
to assist this young democracy onto a path of sustainable social 
and economic development. 
KLEMM