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Friday, 17 May, 2002, 07:28 GMT 08:28 UK
East Timor gets oil treaty
East Timorese students dance during a rehearsal for the independence party in Dili, East Timor
Planning for independence celebrations
Australia and East Timor will sign a treaty to divide up oil and gas reserves under the Timor Sea next week.

East Timor, which is viewed by the United Nations as Asia's poorest country, will gain its independence from Indonesia on 20 May.

"It is my intention to sign the treaty with the East Timorese government," Australia's Prime Minister John Howard said in a radio interview.

Past Australian governments have been accused by human rights activists of ignoring Indonesian atrocities in East Timor to protect access to oil in the Timor Sea.

'Extremely fair'

East Timor has been under UN administration since 1999 when a referendum in favour of independence was followed by massacres by anti-separatist militias.

The treaty Mr Howard will sign replaces Australia's previous treaty with Indonesia.

It marks out a joint development zone of 30,000 square kilometres and splits royalties from the zone 90% in East Timor's favour.

Mr Howard rejected criticism of the treaty as biased towards Australia, saying it was "extremely fair."

International donors have agreed to provide East Timor with $440m in aid to help it through its first three years of independence.

Legacy of past

East Timor's economy has suffered from centuries of neglect as a Portuguese colony and decades of conflict with the Indonesian military after its invasion in 1975.

But it was the systematic destruction by retreating Indonesian troops and militias after the vote for independence almost three years ago which ensured the transition to nationhood would be extremely difficult.

Per capita gross domestic product is $478 and half the population is earning less than 55 US cents a day, according to the United Nations Development Program.

Very few people have received adequate education and more than half are illiterate.

See also:

13 May 02 | Asia-Pacific
East Timor lines up foreign friends
13 May 02 | Asia-Pacific
East Timor 'Asia's poorest nation'
17 Apr 02 | Asia-Pacific
E Timor warned of challenge ahead
26 Feb 02 | Asia-Pacific
Australia pledges $3m to East Timor
25 Feb 02 | Asia-Pacific
E Timor, Indonesia sign accords
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