The special economic zone of social market economy in Oecusse, Timor-Leste

Timor-Leste is one of the world’s youngest countries and also one of its poorest. The largely agrarian nation is heavily dependent on foreign aid and its dwindling offshore oil and natural gas reserves. The country’s tourism sector is still in its infancy but earmarked by the government as a future growth industry (Bou-chon, 2020). Tourism development efforts have particularly focused on Oecusse-Ambeno, a coastal enclave located in the western part of Timor Island and separated from the rest of the country by West Timor, which forms part of Indonesia’s Nusa Tenggara Timur Province. After the vote for independence from Indonesia in a UN-backed referendum in 1999, the enclave with a population of around 70,000 Meto Indigenous people was ravaged by an Indonesian Army supported militia which destroyed most of the enclave’s infrastructure and displaced the majority of its Indigenous population (Rose, 2017).

In early 2013, the government of Timor-Leste announced that Oecusse was to be developed into a tourism and investment hub under the official name Zonas Especiáis de Economía Social de Mercado - ZEESM (Special Economic Zone of Social Market Economy), with an earmarked budget of more than US $4 billion over a period of 20 years (Meitzner Yoder, 2015). One of the major drawcards for tourists - aside from its pristine beaches and high-potential diving spots - is Oecusse’s historical status as the first landing spot of the Portuguese, hence first results of the massive economic overhaul were to be expected by the time of the 500-year commemoration celebrations in November 2015. The high-profile character of the megaproject was underscored by the appointment of a former prime minister as its head and major champion. During public information sessions that were organised from 2013 to 2014 primarily in the Timor-Leste capital Dili as well as on brief tours throughout the predominantly rural district of Oecusse, futuristic landscape visions and design diagrams were presented that had been developed by Portuguese development consultants and South Korean waterfront development firms (Meitzner Yoder, 2015).

It was obvious from the presentations by foreign consultants and government officials that the characteristics that determining whether a rural area would be designated as a tourism region, potential industrial processing site, or an agio-export production zone were based purely on scientific and technical factors (Meitzner Yoder, 2015). The plans did not consider any socio-cultural aspects, including pre-existing legal claims to the land by the Indigenous Meto people that are the dominant ethnic group in the area (Rose, 2017). Two planned resort enclaves — featuring various hotels, golf courses and a waterpark — would be located on smallholder rice fields owned and cultivated by a large number of smallholder families and would divert water from an ecologically fragile, water-scarce region (Meitzner Yoder, 2015).

By mid-2016, construction of a bridge, a port, an international airport, a luxury resort, a historic monument park and a special clinic were in progress, while the district’s main road was also being reconstructed (Rose, 2017; Meitzner Yoder, 2018). These infrastructure projects have consumed around US$ 500 million in public funds, mostly derived from the country’s petroleum fund - a sovereign wealth fund fed by revenues from Timor-Leste’s oil and gas fields that are expected to be depleted within the next few years (Davidson, 2017). While authorities claim that 70 per cent of the workers involved in infrastructure development are local, this figure is contested by a Dili-based NGO which suggests that virtually all workers at the Suai airport construction site are Indonesian (La’o Hamutuk, 2017).

The largest impact has been felt by local residents on privately owned land along the road construction site who saw their fruit trees, wells, gardens and houses demolished with little warning and were forced to live in makeshift shelters, as the delivery of funds and materials for rebuilding homes was delayed (Rose, 2017). The cash payments that were eventually handed out only covered between 15 and 25 per cent of the cost for the construction labour (Meitzner Yoder, 2016). In another area, a hamlet of about 12 huts was completely removed to make way for a luxury hotel, with one technician being quoted as saying that these people were there “illegally” (Rose, 2017, p. 205). The majority of roadside families lost hundreds of dollars in timber and fruit from felled trees without receiving any compensation for these losses (Meitzner Yoder, 2016). Traditionally, trees in home yards have been used by the Meto people to mark their ownership claims for a particular area (Meitzner Yoder, 2011).

NGO representatives have criticised the government-appointed ZEESM Authority enacting their own policies, regulations and executive orders for the enclave, including managing state-owned property and deciding on land use conversions and expropriations (La’o Hamutuk, 2017). In fact, legislation promulgated in 2014/15 effectively excised Oecusse from national governance structures and fiscal processes (Meitzner Yoder, 2015). Both local NGOs and foreign academics have accused the ZEESM for focusing on promising hypothetical luxury tourists and use ‘aspirational distractions of megaprojects’ rather than building on the strengths and priorities of local communities (Meitzner Yoder, 2015; La’o Hamutuk, 2017). A World Bank report also questions the tourism potential of the area, referring to the absence of “world-class beaches” or other major tourist attractions and to insufficient “access to land” as major constraints (World Bank, 2016, p. 24). Meanwhile, throughout lowland Oecussi, residents continue to be extremely insecure about the rights to their remaining land and natural resources and the future viability of their livelihoods (Rose, 2017).

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