【By Observer Net, Chen Sijia】East Timor has long faced the problem of backward infrastructure, with untreated sewage directly discharged, causing serious pollution. The Millennium Challenge Corporation (MCC), an American foreign aid agency, had signed an agreement with East Timor, promising to invest 420 million U.S. dollars to build a sewage treatment plant for the country. The East Timor government has also spent millions of dollars to purchase land and prepare for construction.
However, the United States recently suddenly changed its mind, which caused dissatisfaction from East Timor. According to the New York Times on October 1, the MCC board had proposed terminating the sewage treatment plant agreement with East Timor in August. East Timor's President Jose Ramos Horta stated that the country has long maintained a friendly relationship with the United States, and it is difficult to understand the American decision.
East Timor is an island nation in Southeast Asia, bordering Indonesia's East Nusa Tenggara province. East Timor was long colonized by Portugal, and after independence in 1975, it was annexed by Indonesia. In 1999, the people of East Timor voted in a referendum to separate from Indonesia and regained independence in May 2002. East Timor has a population of about 1.34 million and is listed by the United Nations as one of the least developed countries in the world.
The Millennium Challenge Corporation was established in 2004 as an independent foreign aid agency of the U.S. government, nominally helping underdeveloped countries develop their economies, but actually serving the U.S. global strategy and geopolitical goals, acting as a tool for the United States to win over regional countries. The organization is managed by a board of nine members, including the U.S. Secretary of State, Treasury Secretary, Administrator of the U.S. Agency for International Development, Trade Representative, and the company's Chief Executive Officer, as well as four members appointed by the U.S. President.
The report said that in July this year, the Millennium Challenge Corporation announced that it was reviewing agreements around the world to ensure that the institution "continues to make the United States safer, stronger, and more prosperous." Two offices of U.S. senators revealed that the MCC board had proposed terminating the sewage treatment plant agreement with East Timor in August.
According to sources, the board also recommended canceling large-scale infrastructure projects in Lesotho and Malawi, as well as agreements being discussed with eight other poor countries. At the same time, the board added Fiji and Tonga in the Pacific Islands to the list of potential investment targets. According to regulations, the decisions of the Millennium Challenge Corporation board must be reviewed by the U.S. Congress.
The New York Times reported that regarding this news, the Millennium Challenge Corporation passed the issue to the U.S. Department of State, while the Department of State refused to comment. The State Department only stated in a statement: "The United States is proud to support East Timor and will continue to commit to promoting and strengthening our strong bilateral relations."
The sudden reversal by the United States has caused dissatisfaction among East Timor. President Horta of East Timor said that the country has maintained a friendly relationship with the United States for a long time, "terminating the agreement is incomprehensible, unprecedented between friends."

Last year, residents in Dili, the capital of East Timor, washed clothes on the dry riverbed. The New York Times
Since its independence, East Timor has maintained close ties with the United States, using the U.S. dollar as its official currency, and receiving hundreds of millions of dollars in aid from the United States. The New York Times is concerned that breaking the commitment to East Timor may damage the United States' reputation, thereby "enhancing China's influence in the country."
During Trump's first term, the U.S. Millennium Challenge Corporation sought to reach an aid agreement with East Timor. The agency proposed building a centralized sewage treatment plant in East Timor, transporting urban sewage through pipelines to the plant for treatment before discharge. The World Bank and the Asian Development Bank agreed to fund part of the project. After the parties finalized the agreement, the East Timor National Parliament approved the agreement in 2022.
In addition to investments in water and sanitation facilities, the agreement would also fund training for middle school teachers and principals in East Timor. The Millennium Challenge Corporation agreed to provide 420 million U.S. dollars, while East Timor would contribute 64 million U.S. dollars.
However, after the 2023 East Timor parliamentary elections, the new coalition government reviewed all loans and decided to withdraw from the World Bank agreement. The New York Times reported that the East Timor government has already spent millions of dollars to purchase land, but due to the fact that East Timor has not yet purchased the last 1.2 acres (4856 square meters) of land required for the factory, the relevant negotiations have been further postponed.
East Timor's infrastructure is very old, and the deteriorating water supply infrastructure in the capital, Dili, dates back to the Portuguese colonial period. Most of the city's sewage is directly discharged into the land or into the sea without treatment. Approximately 325,000 people live in Dili, but the city lacks a sewer system, and drinking water is often contaminated by sewage.
World Bank health expert José Mousaco said that many local families spend several hours every day fetching water, "children waste their time studying or playing just to fetch water."
The poor condition of Dili's groundwater has affected East Timor's economic development. Nutritional deficiencies and water pollution problems have made East Timor have the highest rate of child stunting in the world. Jon Richart, an expert who left the U.S. Millennium Challenge Corporation in May this year, said: "People get sick often, making it difficult for them to become productive workers."
Therefore, the East Timor government highly values the U.S. promise of the sewage treatment plant project. East Timor government official Mariano Carmo, who participated in the project, said: "This is a life-saving project."
Carmo explained that considering the scale of the sewage treatment plant project, equivalent to 20% of East Timor's national budget, slow progress is expected. "Delays are not because the East Timor government does not want to. We are a newly emerging country, still very vulnerable," he said.
Jose Caetano Guterres, a member of the East Timor coordination team, visited the construction site of the project in August and said: "If the project ultimately comes to nothing, I don't know what to say. It's not good."
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