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DE RUEHDT #0097/01 0891122
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P R 301122Z MAR 09
FM AMEMBASSY DILI
TO RHMFIUU/COMMARFORPAC
INFO RHHMUNA/HQ USPACOM HONOLULU HI
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHJA/AMEMBASSY JAKARTA 1035
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RUEHDT/AMEMBASSY DILI 3880

UNCLAS SECTION 01 OF 04 DILI 000097 
 
SENSITIVE 
SIPDIS 
 
FOR LT GEN STALDER FROM AMBASSADOR KLEMM 
 
E.O. 12958: N/A 
TAGS: TT MARR ID MOPS OTRA
SUBJECT: SCENESETTER FOR THE VISIT TO TIMOR-LESTE BY MARFORPAC'S LT 
GEN KEITH STALDER 
 
DILI 00000097  001.2 OF 004 
 
 
Summary 
------------ 
 
(SBU)  The visit of U.S. Marine Forces Pacific Commander, 
Lieutenant General Stalder to Dili comes at a perfect time as we 
seek to encourage the Government of Timor-Leste's active 
leadership over the reform of its security sector.  Lt Gen 
Stalder will be the second high ranking American military 
commander to visit Dili in 2009, underscoring the U.S. 
commitment to Timor-Leste's stability and to regional security. 
While still facing enormous challenges of poverty, there are 
hopeful signs of increasing stability with the country now in 
its 14th consecutive month without a serious incident of 
political violence or instability.  The country's leadership 
appears increasingly aware that it must begin to act to hasten 
reform of the country's police and military to sustain this 
stability, an awareness prompted in significant part due to the 
September 2008 national security policy development workshop 
supported by PACOM.  Lt Gen Stalder's meetings with the Timorese 
leadership will allow us to emphasize our continued commitment 
to support reform, especially the professionalization and 
responsible development of Timor-Leste's defense force; and to 
explore possible avenues of future engagement, in particular 
towards the development of Timor-Leste's maritime security 
capabilities.  End summary. 
 
Economic and Social Setting 
----------------------------------- 
 
(U)  Timor-Leste is Asia's poorest country, with half of its 
population living on less than a dollar a day, 85% of its labor 
force engaged in subsistence agriculture, illiteracy running at 
well over 50%, and more than half the population stunted from 
malnutrition.  Timor's poverty is correlated with enormous gaps 
in social infrastructure, distinguished by a poor national road 
network; inadequate telecommunications (less than 1% of 
households has a landline telephone); a single, increasingly 
congested seaport; an electricity grid that supplies power to 
only a third of the country's households and then only for short 
segments of the day; a health services infrastructure barely 
able to cope with one of the world's highest rates of maternal 
and child mortality; an education system in which less than a 
fifth of schoolchildren has a chair or desk, and more than half 
have no textbook; poor water and sanitation facilities 
(two-thirds of adults fetch water at least once a week); and a 
single functioning international airport that can handle planes 
no larger than a 737.  Timor-Leste is not without resources, 
however.  It has more than $4.2 billion in a sovereign wealth 
fund due to accruals from modest oil deposits, and zero 
international debt.  It also benefits from the generosity of the 
international community, with the government forecasting 
receipts of more than $220 million from bilateral and 
multilateral donors in 2009.  The IMF estimates the economy grew 
by a real 12.5% in 2008 due almost solely to increased 
government spending. 
 
Political Context 
--------------------- 
 
(SBU)  Since acquiring independence in 2002, Timor-Leste 
established a tragic pattern of periodic violence or 
instability, with large-scale disturbances occurring almost 
yearly.  The most serious event occurred in 2006, when a 
security sector crisis led to the collapse of the central 
government, widespread property damage, and the displacement of 
150,000 persons from their homes and into large and wretched 
camps around Dili.  To restore order in 2006, an Australian-led 
International Stabilization Force (ISF) intervened and a renewed 
United Nations mandate established a large police presence. 
Both forces remain in Timor in considerable strength.  They were 
unable to prevent, however, the most recent incident of 
political violence when, on February 11, 2008, the President was 
critically wounded and the Prime Minister also came under 
gunfire. 
 
(SBU)  Major causes of Timor's instability include a highly 
contentious political elite; weak, politicized, poorly motivated 
or poorly directed security institutions; poor access to justice 
and a culture of impunity, especially among the elite; and the 
disillusionment and disempowerment that has accompanied Timor's 
 
DILI 00000097  002.2 OF 004 
 
 
failure to raise its people out of grinding poverty.  The 
government of Prime Minister Gusmao, installed in August 2007, 
set out to tackle the primary consequences of the 2006 crisis, 
and to some extent its causes, and recorded significant success 
in 2008.  It largely closed the many internally displaced 
persons camps that were stubbornly scattered across Dili until 
just six months ago.  The government also resolved remaining 
grievances held by the "petitioners," the soldiers that left the 
defense force in early 2006, and introduced a pension system for 
veterans, the elderly and the infirm (a daunting logistical 
challenge in a rugged country without a postal system or banking 
network).  The prime minister designated 2009 as the year of 
infrastructure and rural development as a means of signaling his 
government's intent to speed economic growth and tackle the 
scourges of poverty and unemployment.  In recognition of the 
signs of increasing stability in Timor, the Department of State 
lifted its travel advisory in September 2008 and the ISF reduced 
its troop levels by 150 in January 2009. 
 
Security Sector: Reform Needed 
--------------------------------------- 
 
(SBU)  To transform themselves into protectors of the people and 
sources of stability, both Timor-Leste's national police (PNTL) 
and defense force (F-FDTL) require substantial reform.  The 
poorly-led, unmotivated, under-resourced and ill-trained police 
force is also tainted by its historical antecedents with the 
Indonesian police force and a history through 2006 of severe 
politicization.  Consequently, UNPOL retains full operational 
command of police responsibilities throughout Timor-Leste, 
although a phased process of resumption of Timorese control is 
to begin in April 2009.  The military largely represents the 
rump of the armed resistance to the Indonesian occupation, one 
that is justly proud of its legacy as a guerrilla force in the 
mountains of Timor, but wholly lacking in command, discipline, 
training and logistics capabilities that feature in a modern, 
professional army.  The roles and responsibilities of the PNTL 
and F-FDTL are ill-defined in law or regulation, and civilian 
command often has been wanting at best, contributing to their 
frequent mutual conflict. 
 
(SBU)  Reassuringly, the need for reform is recognized across 
the Timorese leadership spectrum and the donor community, 
especially the UN and Timor-Leste's key democratic partners, has 
signaled strong readiness to assist reform.  A significant 
positive development occurred after the February 11, 2008, 
assassination attempts when the army and the police were placed 
together under a joint command to bring the perpetrators to 
justice.  They did so successfully and peacefully, restoring a 
good deal of trust and confidence between the two forces.  Their 
performance was tarnished, however, by many cases of abuse of 
human rights and authority.  Sadly, such incidents continue to 
occur on a regular basis. 
 
U.S. Support of Reform 
----------------------------- 
 
(SBU)  Since mid-2007, the U.S. has substantially increased its 
engagement with the Timorese government towards reform of its 
military.  Our core objective has been to enhance the ability of 
the government to provide stability and security for its 
citizens, for without stability there can be no realistic hope 
for sustained, long term economic and social development.  To do 
so, we've focused on the goals of reforming and strengthening 
the country's security institutions; enhancing civilian command, 
including through the development of the country's legal 
infrastructure; and supporting the professionalization of the 
F-FDTL and PNTL. 
 
(SBU)  Support from and engagement by the U.S. Pacific Command 
has been essential and generous. In the past eighteen months, 
PACFLT Commander Admiral Robert Willard, U.S. 7th Fleet 
Commander Vice Admiral John Bird,  and your predecessor at 
MARFORPAC, Lt Gen John Goodman, have all visited Timor-Leste. 
The USNS Mercy completed a 15 day deployment here in July 2008 
and the USS Lassen received a warm welcome in January 2009.  A 
company from the 31st Marine Expeditionary Unit (MEU) spent a 
very productive two weeks in April 2008 interoperating with the 
ISF and supporting several community relations projects.  A 
delegation led by the Defense Institute of International Legal 
 
DILI 00000097  003.2 OF 004 
 
 
Studies conducted an analysis of the legal infrastructure 
supporting Timor's security sector in August 2008.  A high-level 
PACFLT, USCG and MARFORPAC assessment team in November 2008 
surveyed the prospects for future engagement.  And with full 
PACOM support, the Asia Pacific Center for Security Studies 
hosted a historic workshop in September 2008 to facilitate the 
drafting of Timor-Leste's first national security policy.  This 
investment, which brought together seventeen Timorese leaders 
from government, parliament, military, police and civil society, 
has done more than any other in recent years to emphasize for 
those who participated and other Timorese leaders the strength 
and authenticity of the U.S. commitment to Timor's reform and 
development. 
 
(SBU)  In February 2009, PACFLT deployed a team of Seabees to 
conduct a variety capacity-building tasks nationwide over an 
indefinite period of time.  And with the upcoming, much 
anticipated visit of the 11th MEU due to occur in October, this 
only further underscores the American commitment to Timor-Leste. 
 
(SBU)  F-FDTL has unfortunately been a source of national 
instability since independence in May 2002.  In April 2006, 
about 40% of the force deserted, a few with weapons and most 
without, and precipitated the aforementioned  national security 
sector crisis which culminated in F-FDTL and PNTL engaging in 
open warfare in the streets of Dili.  This was followed by an 
18-month long period in which Timor was subject to episodes of 
widespread gang violence, and disruptions associated with the 
military dissidents who were behind the events of February 11, 
¶2009.  MARFORPAC engagement of F-FDTL cannot come at a better 
time as it sets off on an attempt to nearly double its numbers 
as a result of this year's upcoming recruit training effort. 
For F-FDTL, this is a dramatic step forward that is not without 
significant risk since many of aspects of the training plan have 
yet to be developed, much less coordinated with the advisors of 
Australia and Portugal - F-FDTL's principal supporters.  The 
bottom line is there may be room for MARFORPAC to assist with 
the recruitment and basic training of new F-FDTL recruits. 
 
Donor coordination 
----------------------- 
 
(SBU)  The coordination of military or police assistance to 
Timor-Leste is at best ad hoc, with the Timorese government 
unable or reluctant to provide leadership.  Early in 2008 at our 
initiative, ambassadors to Dili from Australia, Japan, Portugal, 
New Zealand and the U.S. began to meet periodically to improve 
information sharing, especially regarding maritime security 
assistance, supplementing regular contact among local defense 
attachis.  In effort in 2008 to include security sector reform 
as part of a government-led national priorities process with 
full donor participation failed largely due to lack of 
engagement by key Timor defense actors.  During Admiral 
Willard's July 2008 visit, Secretary of State for Defense Pinto 
openly shared his concerns of having many generous partners 
ready with assistance to meet Timor's many needs, while knowing 
that the aid is often competitive, conflicting or incoherent. 
He openly confessed his inability to effectively coordinate and 
optimize foreign assistance.  Donors with current maritime 
security programs in Timor, or those that have expressed 
interest in aiding Timor's maritime sector include Portugal, 
Australia, China, Japan, Indonesia, Canada, India, New Zealand, 
Britain, Germany, Korea and the United Nations.  Secretary Pinto 
subsequently asked for U.S. support to convene a conference and 
help him enhance the coordination of assistance to Timor's 
maritime security sector.  Embassy Dili continues to explore 
means of possible facilitation. 
 
Your Visit to Timor 
------------------------- 
 
(SBU)  Your visit to Dili comes at an ideal time.  The Honolulu 
APCSS workshop spurred recognition among Timorese leaders of the 
necessity of moving forward on reform of the security sector. 
Not surprisingly, reform is a highly sensitive and political 
subject in Timor-Leste, and while there has been a general 
awareness that the police and military must be overhauled, 
particularly given their tragic contribution to the 2006 crisis, 
there has been scant action.  The UN in particular has a long 
record of failure in initiating meaningful reform.  Following 
 
DILI 00000097  004.2 OF 004 
 
 
the September workshop the Prime Minister told me he will turn 
his attention to security sector reform early in 2009 - his 
attention and commitment will be critical to its success.  In 
December 2008, the President hosted a seminar on the topic to 
prompt action, and his advisors subsequently consulted with me 
on options for the sequencing of reform and how the U.S. can 
assist.   Your encouragement will ensure this momentum is 
maintained. 
 
(SBU)  We hope to secure meetings for you with the President, 
the Prime Minister, and F-FDTL leadership.  Each of these 
engagements will offer an opportunity to discuss the following 
themes. 
 
¶A.  The U.S., including PACOM and Marine Forces Pacific, is 
committed to assisting the government of Timor-Leste provide 
stability and contribute to regional security. 
 
¶B.  The U.S. is ready to explore how we might best support 
Timor-Leste's  implementation of the results of the Honolulu 
workshop; how can the U.S. further support the development of a 
national security policy or law, and the reform of your security 
institutions? 
 
¶C.  The 11th MEU is eager to engage as broadly as possible with 
F-FDTL during its visit to Timor in October 2009. 
 
¶D.  We are always eager, however, to receive your suggestions on 
how the U.S. might best support the professionalization of 
F-FDTL. 
 
¶E.  MARFORPAC is grateful for Timor-Leste's warm welcome of the 
31st MEU in April 2008. 
 
¶F.  We strongly recognize the importance of effective donor 
coordination.  As we design our future engagement in 
Timor-Leste, the U.S. will follow your leadership and be as 
transparent as possible with your partners.  The U.S. Embassy is 
exploring possible mechanisms to assist your goal of enhancing 
donor coordination. 
KLEMM