East Timor opened a stormy new chapter in its history on 30 August 1999 when its people voted overwhelmingly for independence from Indonesia. More than 98 per cent of registered voters defied intimidation to cast their ballots in an orderly and peaceful manner. The people of East Timor won the world's admiration for their commitment to democracy. The discipline, patience and dignity displayed on that day will be a hallmark of East Timor as it moves towards recovery and independence. Implementation of the results of the ballot should have been an occasion for celebration. Instead, the people of East Timor were forced to watch the birth of their country with tears.

The reconstruction that will accompany the journey towards independence in East Timor, while arduous and painful, will also provide a genuine opportunity to establish appropriate infrastructure, institutions and economic policies at the outset. That will facilitate the rebuilding of this small and devastated land into a viable, self-sufficient, democratic state for the 21st century.

In order to establish a sound macroeconomic framework for East Timor, more hard choices will need to be made. These pose formidable challenges for future policy-makers in this country. The Transitional Cabinet has endorsed policies establishing a framework for macroeconomic stability. This needs to be supplemented by appropriate structural and social policies to increase investment and employment in both the private and the public sector. Growth based on attracting private investment, both national and foreign, requires public policies and investment to provide better infrastructure, well-established property rights, effective governance and the rule of law.

Parallel with this, a future independent East Timor must begin to show its commitment to sustainability by building a sound fiscal framework underpinned by a stable, credible currency. Initiatives to establish a national currency in the future will include efforts to ensure it has strong financial backing and the credibility necessary to be welcomed by international financial markets.