The foreign aid regime in Timor-Leste : Australia and the rise of China

Abstract

This thesis carefully examines the foreign aid regime providing support to Timor-Leste, one of the youngest countries in Asia and heavily dependent on foreign aid from the West for its development. Australia, for example, has provided around U$600 million in aid to make its presence in humanitarian and political terms known in the region. However, in recent years, Chinese aid has made its way into Timor-Leste through building infrastructures that amounts only to U$60 million but are visibly imposing on Dili, its capital and its skyline. This led many commentators to see that China has been 'invading' Timor-Leste, most commonly known as the 'backyard' of Australia. In this context, using the framework of aid regime theory, this study intends to clarify if the presence of China's aid is in competition with Australia, or whether it represents another way of aid delivery that could possibly evolve into a more cooperative mode of aid in Timor-Leste. Results are based on the analysis of the discourse and narratives gathered from political, diplomatic and local people on the role of Australian and Chinese aid in Timor-Leste. These narratives reveal how the discourse of development and underdevelopment has been created by the donors, and how the norms of the foreign aid regime are understood by the various recipient actors, ranging from East Timorese diplomats to farmers and students who have benefitted from aid coming from both countries as individuals or as a state in the post-independence era. Data for this study was collected through face-to-face interviews conducted in Timor-Leste, China and Australia and the informants were selected through purposive sampling. This thesis has found that both Australian and Chinese aid were given to Timor-Leste on three-core grounds: moral vision, national interests, and possible cooperation between the donor and recipient, balancing carefully among altruism, prestige, economic interest and partnership. In addition, East Timorese officials were generally very satisfied with Australian aid while feeling confident about Chinese aid, although they also saw both aids had problems in creating labour or work for locals. Those East Timorese studying in China on aid scholarships however seemed much more positive than the East Timorese farmers who believed that both aid from China and Australia would not be sustainable in the long-run regardless of the differences, in terms of approach in delivery and norms inherited in their aid delivery. This thesis maintains that Chinese aid seems to become a good alternative for Timor-Leste to expand its infrastructure with little political pressure. However, Chinese aid in its current state is unlikely to challenge and revise the Australian or Western aid regime as Timor-Leste prefers to maintain the status quo by playing the Chinese as a supplementary and cooperating aid partner.