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Timor-Leste heading towards minority, but stable, government
Deakin Speaking - August 11, 2017
The new Popular Liberation Party (PLP), with eight seats, will not join the government but has agreed to not block the budget or to force early elections. Fretilin will therefore be able to count on a minimum of 35 votes to pass the budget and, presumably, any other essential legislation.
CNRT, with 22 seats, had held discussions with Fretilin but has reached no agreement to join in what had previously been expected to be a Fretilin-CNRT alliance. CNRT leader Xanana Gusmao said that CNRT should remain in opposition, although he did leave the way open for CNRT members to be appointed as ministers.
The fifth party in parliament, the Democratic Party (PD), met with Fretilin but made a claim for ministries which Fretilin could not agree to. It is therefore expected that PD, which in the past had an antithetical relationship with Fretilin, will also remain in opposition.
Fretilin will be asked to form government under Section 106 of Timor-Leste's constitution, which says that the president calls on the person who heads the 'most voted' party or who can form a majority alliance to become prime minister. The prime minister then recommends ministers to the president, who in turn appoints the ministers.
The 'most voted' aspect of Timor-Leste's constitution was tested, controversially, in 2007, when Fretilin was also 'most voted' but did not have a parliamentary majority. CNRT was able to form a majority parliamentary alliance and, on that basis, Xanana Gusmao was appointed as prime minister by then President, Jose Ramos-Horta.
Fretilin argued at that time that it could form a minority government and still gather enough parliamentary support to pass a budget. President Ramos-Horta's decision to support a majority alliance in parliament led to entrenched political division in Timor-Leste, following the violence of 2006.
The appointment of a CNRT-led government, however, did usher in a period of greater political stability, much of which was purchased by the new government's spending program in excess of the country's sovereign wealth 'petroleum' fund's sustainable limits. In 2015, CNRT invited Fretilin to join in a government of 'national unity', with Xanana Gusmao stepping down a prime minister, elevating Fretilin's Rui Araujo to that position.
CNRT thereafter supported Fretilin's Francisco 'Lu-Olo' Guterres for the presidency in the March presidential elections, in which he was successful. It was expected, with CNRT supporting Fretilin, that the two parties would continue in alliance following the parliamentary elections on 22 July.
Many in CNRT believed that, after supporting Araujo as prime minister and Guterres as president, it was CNRT's 'turn' to be allocated the prime ministership. However, with CNRT achieving a vote 0.19 per cent behind Fretilin's 20.65 per cent, it appeared that any understanding that may have existed prior to the elections was ended.
Importantly, while this situation could have led to confrontation, it does not now seem that will be the case. There now appears to be a broad commitment to continuing Timor-Leste's political stability.
The question will be, however, how the incoming government addresses Timor-Leste's increasingly troubled financial future. Without another major source of income, which does not appear likely at this time, there will need to be significant cuts to the country's national budget.
Depending on which areas of the budget are cut, many people who currently receive pensions or who benefit from subsidies may find their lives becoming harder rather than easier. Cuts to major infrastructure projects would therefore be more politically palatable, if reversing recent policy and slowing overall economic growth.
Following this year's elections, Timor-Leste now has a way forward. After some initial concern about the country's future, it now appears that Timor-Leste may be able to continue to avoid internal dissent and conflict, and instead consolidate its peace and stability.
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