KEY POINTS:
Prime Minister John Key has committed New Zealand forces to remain in East Timor at least until the end of next year.
He gave the undertaking at a Beehive meeting yesterday with East Timor President Jose Ramos Horta. It is the President's first official visit overseas since he was shot twice in the back a year ago at his home in Dili.
Mr Ramos-Horta said he hoped the International Stability Force (Australia, New Zealand, Portugal and Malaysia) would stay until at least the end of 2010 and that the United Nations would stay until 2012, the year of the next presidential elections.
New Zealand has about 150 Defence Force personnel there and 25 police officers.
The numbers had been scaled down after the territory gained independence in 2002 from Indonesia.
But the East Timor Government was forced to seek foreign intervention again in 2006 with violence among its own security forces and a breakdown in trust between the police and the Army.
Mr Ramos-Horta yesterday described new Zealand's contribution as "a noble example of humanity, and solidarity which you can be very proud of".
He told the Institute of International Affairs in Wellington that it had been "humiliating" for the East Timorese defence forces when the Government had to seek outside intervention.
Mr Ramos-Horta took on the role of Defence Minister as well as Prime Minister at that time but said he viewed his role "more as an Army chaplain" addressing the wounded souls and pride.
But in the President's speech yesterday, and an interview later, he concentrated on some of the big ideas and big spending projects that are underway in East Timor.
He said hundred of millions would be spent on roads, on a new port and airport.
And a Chinese company had won a tender to build a national grid to supply the country with power 24 hours a day.
Not until the electricity supply was reliable would people be charged for power.
He said the Government was working on a taxation system that would be implemented by 2010 and it would set up a pension fund.
The Government budget in the current year was about US$900 million ($1.74 billion), US$700 million of which was funded from the Petroleum Fund - royalties from gas and oil in the Timor Sea - and US$200 million in overseas aid.
The country had no foreign debt and the Petroleum Fund at present had US$4 billion in reserves. The fund was held in US Federal Reserve bonds.
"We didn't invest in any speculative markets around the world."
Of the 60 camps that sprang up with the internal upheaval in 2006, three remain to be closed.
He said that all the elderly in the country had been tracked down and given US$20 every six months, which would be an ongoing payment. That had been a move of the Minister for Social Solidarity, Maria Domingus Fernandes Alves, whom he called his "favourite minister" at present.
"Who knows? She may be the next president," he said, reviving speculation that he might step down before the 2012 election if he deemed the country stable enough.
He hoped the country would not have to draw too much on the Petroleum Fund, but said that if it had no choice, it would.
Mr Ramos-Horta believed it was "inevitable" that the global economic crisis would have an impact on the donor community around the world.
"Official speeches by leaders say it will not affect it but most likely it will be."
The crisis had not affected East Timor at all. "If anything it has had some positive impact on our import bill as commodity prices depreciated drastically since last year and continue this year. So we pay less for what we buy."
