Communal tensions, inadequate security measures, increasing unemployment and the massive displacement of people could be a recipe for new conflict in East Timor, the International Crisis Group has warned in its latest report on the country.

East Timor, also known as Timor-Leste, is Asia's youngest and this millennium's first new nation, having gained independence in 2002 after a quarter of a century of repressive rule and occupation by Indonesia. However, freedom has brought little peace to this poor nation of 1.1 million; its brief history has been marred by massacre, torture, starvation and sectarian violence. Its citizens have been robbed of jobs and food, creating a humanitarian tragedy likely to fuel yet another conflict.

Deadly riots in April 2006 after the government sacked hundreds of soldiers, and ethnic and political violence in August 2007 after inconclusive parliamentary elections, led to the displacement of one-tenth of the population, the Brussels-based think tank said in its report. Close to 100,000 internally displaced persons live in refugee-style camps set up by the government. Perhaps the most unusual camp is in the national hospital in the capital city of Dili, where hundreds are said to be living alongside their livestock.

Fear runs so deep in people who fled their homes amidst fighting and looting that many are reluctant to leave the camps and return to their homes. Some have no homes left, while many others find it difficult to reclaim their property due to inadequate registration procedures and the lack of dispute-resolution mechanisms. Others simply want to stay put in the camps for the free rice. Some of the camps are allegedly run by people with a vested interest in maintaining the status quo because they control the black market for reselling food aid.

John Virgoe, the Crisis Group's Southeast Asia project director, said that camps for internally displaced persons in Dili are not just a humanitarian disaster zone, but also a visible reminder of the failure of the government and international forces to create a secure environment. "Resolving the displacement crisis is essential if Timor is to move beyond the 2006 conflict," he said.

Although the East Timorese government claims to have a plan, called the national recovery strategy, to address the problems of displaced people, the Crisis Group argues that only rebuilding houses is reflected in the government's 2008 budget while no money has been allocated for other equally important non-infrastructure issues, such as upgrading security, social support and resettlement programs. The report claims that social support programs are crucial to reduce "social jealousy" among the people and help bring reconciliation within communities.

Analysts also point out that the government strategy excludes important issues and options for rebuilding many properties, which are at the center of ownership disputes. "Timor badly needs a functioning land and property regime," the Crisis Group report claims. While it appears that powerful gangs and anti-social elements are profiting by the lack of land reforms, the fact is that East Timor has draft land laws. However, the problem is that successive governments have considered them controversial and so have not ratified them. Although government sources acknowledge the problem, land reforms and solutions for the displaced people will take time, they say.

East Timor is racing against time, however. Sporadic violence and gang-related activities are common, and a strong deterrent to peaceful settlement programs. Sources in Dili say the people living in camps do not trust government security forces to guarantee their safety, and many of the arsonists and perpetrators of the 2006 violence roam free, while some have paved their way to senior leadership positions. East Timor's violent internal conflicts have been blamed on pro-Jakarta militia backed by Indonesian military elements.

Locals believe that the attempted assassination of President Ramos-Horta and Prime Minister Xanana Gusmao on Feb. 11 this year, which left the president seriously injured, is proof of a fractured security that gives them even more reason to fear violence. The Crisis Group's Asia program director, Robert Templer, said, "Arson and displacements have become almost routine events in Timor-Leste. The cycle of impunity must be broken, and potential arsonists need to feel that they may face punishment for their actions."

Rumor is strife that the East Timorese military is planning an operation in the coming days to capture fugitive rebel soldiers believed to be behind the attempted joint assassination of the president and prime minister. Although security forces killed rebel leader Alfredo Reinado when he attacked the president, the Crisis Group report gives a chilling warning that another Reinado will emerge unless the government urgently addresses the country's communal tensions, problems within the security forces, lack of jobs and massive displacement, all of which threaten law and order.

In Dili at the end of last month, Vice Prime Minister Jose Luis Guterres, in talks with 23 donor countries, appealed for US$33.5 million in aid for his impoverished nation. In his closing speech at the end of the two-day talks, Guterres said, "It is critical for the government to receive continuous financial support from the international community during this crucial 2008 transition period."

Battling its internal human-induced crisis and fighting recurring natural hazards like floods, tsunamis and disease will keep East Timor heavily dependent on foreign aid and export revenues from its offshore oil and gas fields. But wise spending of the money will be just as crucial as procuring it.

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