There's no such thing as a free lunch...Or is there?

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It's official. The next president of Indonesia is former army general Prabowo Subianto. Quite how the next five years will pan out is anyone's guess but hopefully the foreign pundits who always bring up his dodgy human rights record will be proven wrong. Nonetheless, on policy making, Prabowo's popularist move to literally offer the poor 'a free lunch' every day of the week does not augur well for the future. Such a policy - if it ever came to fruition - would cost a phenomenal amount of money and likely lead to huge inefficiencies (food waste) and poor incentives (make people lazy). Another concern is Prabowo's strong nationalist bent. Thus, in the possible event that he finds himself with his back against the proverbial wall in the face of stern economic challenges, there is a big chance that he will simply scapegoat foreigners. But he will have to be careful. Construction of the new capital city, Nusantara, for example, is highly dependent on foreign in

The East Timor rip-off

If you’ve ever been to East Timor you’ll know what a poor country it is. I went there after spending a few weeks in hedonistic Kuta, and the culture shock is almost as much as flying from Singapore to Jakarta. 

Colonized by the Portuguese and then later a territory of Indonesia, the Timorese basically survive from subsidence agriculture. There is no real industry to speak of. Per capita GDP is only US$400, and it shows. Most Timorese dress in rags and malnourishment is everywhere to be seen. 

And then there is US$30 billion sitting in the Timor Sea separating East Timor and Australia. But guess what? East Timor isn’t going to get its fair share. And why is that? Cos the Australians claim that the maritime boundary between the two countries is a lot closer to East Timor than it is to Australia. See the pic below.

  East Timor oil map But how can that be fair?!! Surely any reasonably minded person would agree that the maritime boundary should be drawn equidistant between the two countries in accordance with international law. But Howard isn’t having any logic. So the Aussie govt does acknowledge East Timor as a sovereign nation but will only accept the maritime boundary it drew up with Indonesia back in 1972. 

And why is that? Cos of the oil of course: Only 20.1 percent of the key Greater Sunrise reservoir falls within the joint petroleum development area set out in the 2002 Timor Sea Treaty interim agreement between Australia and East Timor. 

The other 79.9 percent is in a part of the Timor Sea over which Australia claims exclusive jurisdiction. Now take a look at the map above again, and you can see that if the maritime boundary were drawn equidistant between the two countries then the Greater Sunrise reservoir should indeed belong to East Timor. So the Aussies are basically getting far more than they should be entitled to. How unjust can you get?

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