AusAID Reversed Funding Cuts After Threat from Timor-Leste President - Report

The Australian Agency for International Development has reportedly overturned a decision to cut funding for a Timorese program following Timorese President Jose Ramos-Horta’s threat to inform then Australian Prime Minister Kevin Rudd that the “vast majority” of Australian funding went to consultants and study missions, according to diplomatic cables and briefing notes. 

Funding cuts were proposed last year for the “Buy Local, Build East Timor” program, which was managed by Canadian non-governmental organization Peace Dividend Trust, after an AusAID review uncovered alleged scheduling and monitoring deficiencies, The Australian reports.

In a letter to Australia’s then ambassador to Timor-Leste Peter Heyward, Ramos-Horta, a Nobel Peace Prize laureate, reportedly demanded that the cuts be revoked and threatened to tell Rudd that most of the Australian funding was spent on consultants, study missions and recommendations, according to the paper. 

A day after the letter was leaked on June 9, 2010, some 400,000 Australian dollars ($408,000) was committed to the project, according to documents obtained by The Australian under the Freedom of Information Act. 

“The (Peace Dividend) Trust had misinterpreted AusAID’s initial offer and had decided to go public in its opposition rather than discuss matters with AusAID,” said one Department of Foreign Affairs briefing document. 

“Subsequent clarifications in negotiating with the trust’s head office in Canada have been successful and on 10 June, 2010, AusAID agreed to provide a further $400,000 to the trust to fund its operations for another year,” the foreign ministry document said.

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About the author

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    Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.