JAKARTA — The world’s youngest democracy will have to stand on its own feet from Sunday. On this day East Timor will become the first newly independent nation of the 21st century. After more than 400 years of colonial rule by Portugal, 25 years of Indonesian occupation and over two years under U.N. administration, the wish of its people is being fulfilled. This is cause for celebration, but not an occasion to ignore some real worries.

The sun burns relentless over the field of Taci Tolo just outside the country’s capital, Dili. This was where the Indonesian Army usually buried its East-Timorese victims. Now locals are building a platform under supervision of Japanese members of the U.N.-forces. At midnight on Sunday, it is on this stage that the secretary general of the U.N., Kofi Annan, will declare the sovereignty of East Timor and hand over power to the recently elected president, former freedom fighter Xanana Gusmao.

Organizers are frantically preparing for 200,000 local and foreign visitors. Estimates vary but the ceremony could cost about $1.4 million. “Some say it’s a waste of money, but this is not a ordinary party,” says Margherita Tracanelli, project manager responsible for attracting money from sponsors. “This is a celebration of the courage of the East Timorese people and a token of appreciation for the international community. It is to show how far East Timor has come.”

Indeed East Timor has come a long way. After the fall of Indonesian President Suharto, Indonesia decided to allow its 27th province to hold a referendum on the question of integration or independence. In August 1999 the population overwhelmingly voted for independence.

Immediately, East Timor was laid to waste by pro-Indonesian militias. When the orgy of violence ended, hundreds of people had been killed and some 250,000 were displaced or on the run. The United Nations Transitional Administration East Timor (UNTAET) took over with the mandate to prepare it for self-rule.

Today East Timor is a U.N. success story. There is peace, and a transitional government — which operates under supervision of UNTAET — is in place. Laws have been accepted, houses and schools rebuilt, hospitals reopened and roads repaired. Gradually refugees are returning home. And the people have shown up in large numbers to vote for their Parliament as well as their president.

All seems well. Then why worry about the future?

“I can’t tell you the truth, because I am under strict orders to say how wonderful things are,” was the telling remark of a high U.N.-official who would only talk on condition of anonymity. Apparently the U.N. has forbidden its personnel to tell outsiders something different than the official story.

“East Timor has been cuddled to death even before it sees the light of day,” the official said. “Until now, everything has been done for them, but now they have to take over. And they are not prepared for the coming shock.”

Over 75 percent of the U.N. staff will have left East Timor by Sunday, independence day. And with them leaving, the Italian restaurants with their espresso-machines, the hotels and the taxi drivers are in for a hard time.

But it is not just the loss of the spending power of the so-called “internationals” that will come as a sobering shock. More important is the disappearance of knowhow.

“They have no idea how they are going to run the power company,” says an U.N.-official currently responsible for the financial management of the utility. The same goes for other vital administrative sectors. He admits it is the U.N.’s fault that it had not spent enough time to transfer knowledge. “After some months East Timor will be forced to hire expensive experts from abroad to solve all kinds of operating problems,” he says.

East Timor is bound to fall back from the current placid situation. The government of Prime Minister Mari Alkatiri will take over from Sunday with high expectations that it will raise this country out of its hole of extreme poverty. But behind the scenes there are growing doubts about his priorities. He plans to disband the coalition government. Only members of his Fretelin Party will be allowed to serve in the Cabinet as far as he is concerned.

There are some other disturbing signs. On April 22, the designated minister of finance, Fernanda Borges, resigned. In a written statement, she explained why she no longer wanted to be part of the government.

“My decision to resign is predicated solely on the failure of the government to implement principles for good governance, lack of transparency in the development of policy and on the personalized decision-making process in government,” she wrote.

“That’s code for corruption,” according to a friend. “She couldn’t accept the fact that donor money was disappearing before it even arrived at the Ministry of Finance.”

“Fernanda Borges is a liar,” said Jose Ramos Horta, a Nobel Peace Prize laureate and designated minister of foreign affairs. He showed an e-mail message that Borges sent him shortly before resigning. In the message she asks for Horta’s support in her bid to have donor money transferred directly to the Ministry of Finance instead of a development fund of the World Bank.

“She was convinced that we were becoming too dependent on the World Bank,” said Horta. “Her plan would introduce a great risk for corruption. Donors would never agree to that.”

Whatever was the real story, important questions remain with regards to the management of the future revenues of the gas fields in the Timor Gap, south of East Timor. According to estimates of the U.N., the exploitation of the Bayu Undan oil field will deliver $3.2 billion in revenues over 17 years starting in 2006. Apart from that there is the much bigger field, called Greater Sunrise, which should raise revenue even more once drilling gets under way.

“We will not waste the money on all kinds of infrastructure projects. It will help us to climb up from an extremely poor country to become a relatively wealthy nation,” says Ramos Horta.

The country won’t stay poor, but it won’t be extremely rich either. “East Timor is no Nigeria, but East Timor will never become a Brunei or Kuwait,” he said.

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