E. Timor aid — where did billions go?

DILI, East Timor – A decade after tiny East Timor broke from Indonesia and prompted one of the most expensive U.N.-led nation-building projects in history, there is little to show for the billions spent.

The world has given more than $8.8 billion in assistance to East Timor since the vote for independence in 1999, according to figures compiled by The Associated Press from the U.N. and 46 donor countries and agencies. That works out to $8,000 for each of East Timor's 1.1 million people, one of the highest per person rates of international aid.

But little of the money, perhaps no more than a dollar of every 10, appears to have made it into East Timor's economy. Instead, it goes toward foreign security forces, consultants and administration, among other things.

In the meantime, data from the International Monetary Fund, World Bank, World Food Program, U.N. Development Program and others show the money has done little to help the poor. In fact, poverty has increased. Roads are in disrepair, there is little access to clean water or health services, and the capital is littered with abandoned, burned-out buildings where the homeless squat.

"The international intervention has preserved the peace, which was always its primary objective," said James Dobbins, director of the RAND International Security and Defense Policy Center. "Its success in promoting political reform and economic development has been more limited."

East Timor was once seen as the poster child for U.N. nation-building.

After a bloody 24-year occupation by Indonesia that left 174,000 dead, the people of this predominantly Catholic former Portuguese colony voted overwhelmingly in a U.N.-managed referendum on Aug. 30, 1999, to separate. The vote triggered a rampage by Indonesian soldiers and proxy militias who killed more than 1,000 people and destroyed much of the infrastructure.

A provisional U.N. administration restored basic services, repaired buildings and resettled hundreds of thousands of people who had lost their homes. With greater powers than any previous mission, the U.N. was supposed to help create the pillars of a new country, virtually from scratch.

The vastness and complexity of the job became apparent in early 2006, just as the U.N. was pulling out its last staff members. Fighting broke out between rival police and army factions, killing dozens and toppling the government. Then, last February, President Jose Ramos-Horta was nearly killed by rebel gunmen in an ambush.

Timor still faces grave challenges:

• Between 2001 and 2007, the number of Timorese living in poverty jumped nearly 14 percent to about 522,000, or roughly half the population, according to the World Bank.

• Children make up half of the poor, and 60 percent of those under 5 suffer malnutrition, the World Bank and World Food Program found.

• The Norwegian Agency for Development Cooperation concluded in a 2007 report that very little aid was channeled into "productive activities, including private sector development."

• The unemployment rate for 15- to 29-year-olds in the capital, who make up the vast majority of the national work force, was more than 40 percent in 2007, according to the IMF and the state.

Atul Khare, who has headed the U.N. operation in East Timor since mid-2006, dismissed the World Bank and IMF figures as "absolutely incorrect" and not representative. He said the country has made "considerable progress" since 1999, and the U.N. East Timor mission has been effective and successful.

"All these figures are a cause of concern, but they are extrapolations, they are not the real figures, and I would not rely on those figures for making assessments," he said. "In the last 10 years, with their own efforts ... assisted by the international community, this country has largely, yes, been a success."

"Were you here in 1999? If you were not here, you cannot gauge."

Associated Press researchers Julie Reed and Randy Herschaft in New York, writers Yu Bing in Beijing, Jae-Soon Chang in Seoul, Robert Gillies in Toronto, Foster Klug in Washington, Slobodan Lekic in Brussels, Ray Lilley in Wellington, Rod McGuirk in Canberra and Tanalee Smith in Adelaide contributed to this article.

Jonathan M. Romano Skate Park as the sun sets. AP Photo/Houston Chronicle, Nick de la Torre