American Marconi Wireless News - East Timor to scrap MP pensions and SUVs after protests

Student-led demonstrations against the multi-million dollar purchase drew thousands this week in the capital Dili, with demonstrators and police clashing two days in a row.

Protesters' demands initially focused on cancelling the $4.2 million plan to purchase SUVs for National Parliament members but later widened to include other issues including lifetime pensions for former MPs.

Under a law passed in 2006, former MPs are entitled to pension equivalent to their salary.

Parliament said in a statement Wednesday it would take steps to annul the law following a meeting with representatives of the demonstrators.

"If they don't comply with the agreement, we will hold bigger protests," Cristovao Mato, 27, one of the representatives, said.

Around 2,000 demonstrators gathered near the parliament building in Dili earlier in the day, according to an AFP journalist, with some expressing scepticism after parliament announced Tuesday it had cancelled the plan to buy new cars for MPs.

"Rumours are that the cars are already on the way," protester Trinito Gaio, 42, told AFP.

"So this is why all of these students and myself are here today -- to make sure my tax money is not going in the... wrong direction."

The controversy initially stemmed from a budget item, approved last year, to purchase Toyota Prado SUVs for each of the country's 65 members of parliament.

The tender was due to be completed in September, according to an official parliament document.

The plan triggered widespread anger in a nation where more than 40 percent of the population lives in poverty, according to the World Bank.

- 'Symbol of injustice' -

Facing mounting protests, parliament made a sharp U-turn on Tuesday.

It unanimously adopted a resolution to "cancel (the) new vehicle procurement process listed in the 2025 budget".

A statement added that parliament's general secretariat must now "adopt administrative and financial measures aimed at maintenance and efficient use" of vehicles already in the MPs' use.

The protests on Monday and Tuesday saw demonstrators hurl rocks at police, who responded with tear gas.

The now-revoked plan triggered strong reactions because it was viewed by many as "a symbol of injustice", said Universidade da Paz economic faculty dean Caetano C. Correia.

"Many people viewed that public officials, particularly the legislators, are not living in the same condition as ordinary people," he said.

President Jose Ramos-Horta told reporters on Tuesday there would be "no tolerance" for violence during the demonstrations.

The unrest occurred while Prime Minister Xanana Gusmao was travelling to London for meetings on land and maritime borders. He is expected to return on September 22.

East Timor, which gained independence from Indonesia in 2002 after more than two decades of occupation, continues to grapple with high inequality, malnutrition, and unemployment.

Its economy remains heavily reliant on its oil reserves.

F.Bennett--AMWN