Ruak sworn in as East Timor's new president

Former guerrilla leader and ex-army chief Taur Matan Ruak pledged to "respect the constitution" as he was sworn in as East Timor's new president.

Ruak, 55, also vowed to "engage for the well-being of the country" in a ceremony after midnight, hours before celebrations to mark 10 years of independence from Indonesia's brutal occupation.

Ruak takes over from Jose Ramos-Horta, a Nobel laureate whose international stature gave prominence to the largely ceremonial role.

The new president made his pledge as the national anthem played in the background at Tasi Tolu, a beachside area on the outskirts of the capital Dili where the country declared independence from Indonesia on May 20, 2002.

Ruak signed a register, then amid applause by thousands of ordinary Timorese and guests that included Indonesian President Susilo Bambang Yudhoyono, he smiled and clasped his predecessor in his arms.

In a country with scant public transportation, many ordinary Timorese arrived on foot to watch the ceremony.

This is a crucial year for the country of 1.1 million also known as Timor-Leste. It will choose a new prime minister and government in general elections on July 7, then at year's end will bid goodbye to UN forces stationed there since 1999.

Ruak won a run-off election last month that was widely lauded as peaceful and fair.

He takes over a country that is hobbled by extreme poverty, corruption and an over-reliance on energy revenues.

But the unstable nation has now enjoyed several years of peace.

The UN has said that peacekeepers will pull out as planned by year's end if the general elections are also peaceful.

The former Portuguese colony voted for independence in a UN-supervised referendum in 1999, after Indonesia's 24-year occupation had left up to 183,000 people dead from fighting, disease and starvation.

The Indonesian military and anti-independence militias went on a savage campaign of retribution after the vote, ravaging the new nation's infrastructure and killing more than 1,000 people.

"It's good that Yudhoyono is coming," Ina Varella Bradidge, a 35-year-old humanitarian worker in Dili, said before the ceremony. "It will make him remember who won the war."

Yudhoyono and the first lady on Saturday prayed together with about 100 Timorese families at Dili's Santa Cruz cemetery, where Indonesian troops fired on a memorial procession in November 1991, killing more than 250 people.

The UN administered East Timor until May 20, 2002, when sovereignty was formally handed to its first president.

Since then the nation has suffered bouts of violence -- a political crisis in 2006 killed 37 people and displaced tens of thousands, and Ramos-Horta was lucky to survive an assassination attempt in 2008.

There has been no major political unrest since then, and government spending has increased dramatically in line with East Timor's increased energy income.

Still, the grinding poverty is visible everywhere.

In Dili, away from the venues for the weekend celebrations, mud canals flood slum neighbourhoods after rains, barely clothed children play in the streets, and infrastructure is limited to a few paved roads, a single port and a tiny airport.

The International Monetary Fund calls East Timor the "most oil-dependent economy in the world" after the discovery of large fields of oil and natural gas at sea.

Petroleum products account for more than 90 percent of total government revenue. A special fund, geared for development spending now and to cushion the next generation, recently swelled to $10 billion.

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