September 8, 2010 / 1:15 PM / 9 years ago

East Timor deputy PM quits, coalition seen at risk

DILI (Reuters) - One of East Timor’s two deputy prime ministers resigned on Wednesday after he said Prime Minister Xanana Gusmao called him a liar, posing a risk to stability of the ruling coalition of the world’s youngest countries.

Mario Viegas Carrascalao, former governor of East Timor, talks at a seminar on East Timor held in Jakarta July 14. Carrascalao told journalists that special autonomy would never work if the people were not consulted. "Special autonomy would only work if it came from the people and not from the top," he said. CC/FY/ME

Mario Carrascalao accused the government of corruption when it failed to buy construction equipment from a supplier he had recommended. The government in turn issued a statement saying Carrascalao’s preferred supplier would not have been able to deliver and asked him to retract his statement.

Dili’s Tempo Semanal newspaper quoted a letter from Carrascalao on Wednesday in which he said that Gusmao had screamed at him. The letter, in Portuguese, was translated into English by the newspaper.

“At the age of 73, this is the first time anyone has ever called me stupid or a liar,” Carrascalao said in the letter. “My response is to resign from my position of deputy prime minister.”

It was not immediately clear what he is accused of lying about.

Carrascalao is a member of the Social Democratic Party (PSD), which is part of Gusmao’s ruling coalition. The justice minister, foreign minister and natural resources minister are also members of the PSD.

Tempo Semanal said Carrascalao’s resignation could lead to the PSD pulling out of the coalition, causing “a political earthquake in Dili.”

Michael Leach, an East Timor analyst from Australia’s Swinburne University, said the dispute posed a risk to Gusmao’s coalition, known as the AMP.

“The PSD may pull out. If any one of the major AMP coalition parties quit the alliance, it would lose its majority in parliament.

“While there is a clear potential for instability in the government as a result of these events, there is so far no indication that PSD will quit the alliance,” he said, adding that fallouts between Gusmao and leaders of allied parties in the past had not led to the breakup of the coalition.

East Timor became the world’s newest nation in 2002 after voting for independence from Indonesia in 1999, triggering a violent backlash from pro-Jakarta militia groups that destroyed almost 70 percent of buildings, including houses and schools.

Eight years on the tiny country remains fragile. Any widespread public anger over corruption could trigger a repeat of the unrest of 2006, when different ethnic groups warred with one another in part over limited access to jobs and economic opportunities in one of the world’s poorest nations.

Writing by Sunanda Creagh; Editing by Nick Macfie

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