“This budget is neither lavish, nor imprudent,” Sergio Vieira de Mello said of the requested $65 million for the coming fiscal year. “This is a budget born of compromise between the arguments of fiscal sustainability, economic good governance and aid dependency on the one hand; and the desperate needs of East Timor and its people on the other.”Warning that UNTAET anticipated a deficit of $20 million this year “just to keep the basic operations of government running,” Mr. Vieira de Mello said support to bridge that deficit was what he was asking of the donor community for 2001-02. “Budget support is not unusual in the early days of independence,” he added. “East Timor should be no exception.” The UNTAET chief said four priorities lay ahead for the UN administration: to consolidate the secure and stable environment that presently existed; to steer East Timor through the creation of democratic institutions and successful, peaceful elections; to put in place the building blocks for the management of public finances and policy making; and to establish the framework for a sustainable and effective government administration. In other news, UNTAET reported that a UN patrol had engaged in an exchange of fire today with a small, armed group of suspected ex-militia it had encountered “well inside East Timor,” 11 kilometres south of the village of Batugade. The UN peacekeepers from Australia were conducting a routine security patrol when they came upon the suspected militia, who fired up the patrol after being instructed to stop and put down their weapons. After the UN troops returned fire, the group withdrew. No peacekeepers or East Timorese civilians were injured. The Australian contingent has deployed troops into blocking positions around the incident location and is currently tracking the group in an attempt to apprehend and disarm its members, UNTAET said, noting that its peacekeepers would respond “swiftly and robustly to any threat to security in East Timor.”

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