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By Sunanda Creagh
DILI, Aug 30 (Reuters) - As a student activist in Jakarta, Avelino Coelho da Silva sought refuge in the Austrian embassy to avoid capture by Indonesian troops. Now as East Timor's Secretary of State for Energy Policy, he installs solar power in villages.
Coelho, 46, is likely to be among the next generation of leaders in the tiny, oil and gas-rich nation which voted overwhelmingly for independence from Indonesia exactly a decade ago.
Both Prime Minister Xanana Gusmao, 63, who was imprisoned by Indonesia, and President Jose Ramos-Horta, 59, who campaigned abroad to keep East Timor's struggle in the public eye, are independence heroes.
But a new generation of political leaders, most of whom were children or students during Indonesia's rule, is getting ready to take over.
A former Portuguese colony, East Timor was invaded in 1975 by Indonesia. An estimated 180,000 died during the occupation, and the U.N. estimates about 1,000 East Timorese died in the mayhem that surrounded the 1999 vote for independence.
Since then, Dili has struggled to tackle security, social and economic woes including high unemployment, splits in the army, and poor infrastructure, healthcare and education.
"If you look at other members of cabinet, I tell you, 80 to 85 percent are new generation. People no more than 35-45 years old, who grew up in the era of occupation. This is the new generation running the country. They are the hope of this country," said Ramos-Horta.
Damien Kingsbury, an East Timor analyst from Australia's Deakin University, said there are already several people in East Timor ready to take over the reins from Gusmao and Ramos-Horta.
"It's essentially the student generation, members of the student resistance organisations and expat Timorese who went back from Australia and Indonesia," Kingsbury said.
The next elections are due in 2012.
The challenges the new leaders face remain daunting. Many roads are just dirt and gravel, making communication with remote villages tough.
Almost 30 percent of the adult population is illiterate: the young men who hang around on Dili street corners are evidence of the 40 percent jobless rate in a country where average household monthly income is just $27. In parts of Dili, roadside stalls sell cast-off clothes to people who can't afford to buy them new.
Coelho's Rural Electrification Master Plan has brought electricity to 17 isolated villages in just over a year by installing solar power systems, funded by the government but owned, installed and maintained by community cooperatives.
"Now they have electricity for five to six hours a day. Before, they spent $US1 a day to buy kerosene but now they can save $US30 a month and use it for other things," he said.
Max Lane, a political analyst who covers Indonesia and East Timor, said the electrification project had helped build Coelho's reputation.
"There will be other candidates around when the big guys leave politics but Coelho will definitely be in the race."
NEW KIDS ON THE BLOCK
Ramos-Horta, who survived an assassination attempt in February 2008, said he sees Fernando Lasama de Araujo, the 46-year-old speaker of parliament, as a future leader.
Araujo, who got almost 20 percent of the vote in the 2007 presidential elections, was acting president for several months after Ramos-Horta was shot by disgruntled former soldiers. He was also involved in negotiations with the militants, who eventually laid down their arms.
Araujo, from the Democratic Party, says the government cannot just rely on its $5.1 billion Petroleum Fund, where money from oil and gas deals is collected, to fund development.
"We need to get the money from somewhere to accelerate development. I support foreign loans to achieve this," he said.
"After 10 years of independence, we should have achieved more than we have. Water is a very important one and roads, and schools. Until we build a port we cannot attract investors and tourism."
Finance Minister Emilia Pires, 48, who grew up and studied law in Australia, is another leader carving out a name for herself as she tries to increase spending on education, health and infrastructure. Pires is an independent, like some other cabinet members, and is close to Gusmao.
The economy grew 12.8 percent last year and she expects it to expand 8 percent both this year and next.
(For an interview, click on [ID:nJAK518967] )
Her predecessor, Fernanda Borges, an Australian-educated former credit risk analyst who helped set up the Central Payments Office, the forerunner of the Banking and Payments Authority, or central bank, is also considered a future leader.
Borges, 40, quit as finance minister in 2002 after accusing the government of corruption, and formed her own party, the National Unity Party.
East Timor ranked 145th out of 180 countries in Transparency International's 2008 Corruption Perceptions Index -- on a par with Kazakhstan and below Indonesia.
"I understand my limitations as a member of a small party. I know I don't have the resistance hero image behind me. But with three seats in parliament we can be a voice to say this is wrong and when the government is doing the right thing, we can say this is the right thing too," she told Reuters in an interview.
"We are the new kids on the block but people trust us. (Reporting by Sunanda Creagh in Dili; Editing by Sara Webb and Sanjeev Miglani)
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