REPORTER: David O’Shea
JOSE (Translation): This is a drawing of the East Timorese flag.

These children are trying to forget the trauma of fleeing their homes. For the past five months, 'home' has been a refugee camp at Dili airport. This is Jose, a refugee who's volunteered to help keep the children busy.

JOSE: Sometimes we feel very sad because we do not know in an uncertain time, we do not know when we can go home. That sometimes makes us feel a bit sad about it, but with this kind of activity, we can minimise the fear and the stress or depression.

There are still almost 60 camps for 150,000 internally displaced people in East Timor. Many have had their homes looted and burned. They fled here with nothing, they're going nowhere, and they're getting by as best they can.

JOHN BOSCOE, REFUGEE (Translation): The tents are too hot, so we built these. They don't keep the rain out, but they're not as hot.

John Bosco fled to the airport with his family back in April at the first sign of trouble. He's been here ever since. John offers to show me what life is like for the refugees here.

JOHN BOSCOE (Translation): We've got no beds or anything. When it happened, we ran away. We had to leave everything behind. Since then, we've asked friends for help. We've got a few things from our friends. It's like this for us every day. Good morning. Morning!

The refugees here are mostly easterners and have been threatened by mobs from the west.

JOHN BOSCOE (Translation): This is our life. We want to go out, but we feel threatened, so we just stay in our tents. Although it's hot, we stay here because we're afraid.

GIRL (Translation): When things are better, we'll go home.

REPORTER (Translation): But it's not better yet?

GIRL (Translation): There are still disturbances in our neighbourhood.

REPORTER (Translation): Every night?

GIRL (Translation): Yes, every night.

John says that when he and some friends tried to go home they were attacked, and one of them was stabbed. But worse than the fear is the feeling that the refugees are pawns in a political game.

JOHN BOSCOE (Translation): Even those people, our brothers, the ones who behave brutally, burning and looting, even they know that they're being used. We in the camps are also being used, we're also victims. We have suffered too much. If the government want to kill us all they can take us to a field and shoot us. Better to die than suffer.

ARSENIO BANO, MINISTER FOR LABOUR AND COMMUNITY REINSERTION: All of these are maps that we identify different camps.

The government minister responsible for managing the camps is Arsenio Bano. He says the refugees won't go home until East Timor's leaders show some unity.

ARSENIO BANO: We need to have a common understanding or effort by everyone in this country that we are sending one message of how to be able to calm down the situation, because it is not only a sectarian problem - it is most likely a politically motivated problem which makes it so difficult to handle from the humanitarian aspect.

Outside of Dili we pass thousands more displaced people. I've joined the United Nations World Food Program on a field trip to assess humanitarian needs in the east of the country. It's not only the refugees who are suffering here. Life for most East Timorese is a struggle at the best of times and aid agencies were warning of widespread malnutrition even before the current crisis.

RASMUS EGENDAL, WFP EMERGENCY COORDINATOR: At WFP we've done some surveys and we estimate about 350,000 people on average in any given year do not have access to enough food to meet their minimum kilocalorie requirements. That means they don't have enough food, they don't have money to buy enough food or the household doesn't produce enough food.

This family is like many others in East Timor. They have no land to farm, so they rarely eat vegetables, beans or eggs. The father ekes out a living selling fish, but the family only gets to eat fish once or twice a month. The 'blonding' of the children's hair indicates significant protein deficiency and all of them are stunted.

RASMUS EGENDAL: That child there is seven years old - she probably has the height of a 5-year-old. They don't get enough food, they don't get the right kind of food for them to grow at a normal level.

According to the World Food Program, almost 10% of East Timorese children die before their first birthday. Of those who survive, close to half are underweight or stunted and 12% are severely malnourished. Emergency coordinator Rasmus Egendal says there are long-term consequences for the country if malnutrition is not eradicated.

RASMUS EGENDAL: Their growth is stunted, their mental development is not as it's supposed to be, so many kids die. When they go to school, they don't have the same capacity to develop, so for a nation like this that is struggling to come back after this bumpy period it's been through, that's a serious problem.

Is this the rice? The rice. They already ate once today?

TRANSLATOR: Lunch and dinner.

RASMUS EGENDAL: What do they eat with this?

TRANSLATOR: No more, only this - only rice.

RASMUS EGENDAL: What is in this pot? It's empty. OK. So do they eat any vegetables with this?

TRANSLATOR: No, only this.

Even those with land to farm are doing it tough. Like farmers all round here, this family is feeling the effects of two years of bad harvests. This young mother is pregnant with her second child. Egendal wants her to visit the local clinic where she can pick up dietary supplements and doctors can monitor the baby's growth.

RASMUS EGENDAL: She doesn't go if she doesn't have a problem? OK, so that doesn't work very well in terms of growth, so she doesn't really understand how to go.

Whether she understands or not, it costs money and time to reach the clinic and her main concern is finding enough to eat each day.

RASMUS EGENDAL: We can't do anything about the poor agriculture and we don't want to provide free food, but we can do a supplementary program, so the mothers - they go to the clinics, and you bring some support to the children and the pregnant women and also the mothers that are still breastfeeding.

Egendal has brought me to see the local health clinic. It's doing its best to provide for the needs of locals here in the east, as well as the influx of refugees from Dili. This young woman's first child died and she's now pregnant with her second.

REPORTER (Translation): How many months are you?

WOMAN (Translation): Six months.

RASMUS EGENDAL: Does she understand about children. Does she understand what she has to do?

TRANSLATOR: Yes, she understands.

RASMUS EGENDAL: Every month?

TRANSLATOR: Yes, every month.

RASMUS EGENDAL: Every month to the health clinic to weigh, to measure the child.

The World Food program says the current crisis is making a critical situation even worse.

RASMUS EGENDAL: If anything should happen, if there is some sort of generalised violence or any kind of shock, these people can very quickly get into a situation where the acute malnutrition raises to a level where the kids are at risk of dying or getting diseases.

This woman is 1 of 300 Cuban doctors brought into East Timor by former prime minister Mari Alkatiri. She says she was shocked to see the level of poverty here.

CUBAN DOCTOR (Translation): Out of 1,000 children, almost half will be under-nourished. Almost half of them have malnutrition problems. It's disconcerting to find so many under-nourished children.

She has found the Timorese have been through so much, yet expect so little.

CUBAN DOCTOR (Translation): They don't know any better, they think life's like that. Living in those conditions without the minimum... It's hard to see them not knowing life could be better. Sometimes you feel impotent. You don't know how to help. Often there are no resources, so it's hard.

On the way back to the capital, we find more displaced people. Instead of fleeing to a refugee camp, these people moved onto their family's land.

RASMUS EGENDAL: 10 people sleep in here. 10 people sleep in this house? That's a lot. And their house was burned?

WOMAN: No, just broken.

RASMUS EGENDAL: OK, just broken. Just imagine if they are here when the rainy season starts.

Back at Dili's airport, the refugees are also worried about the rainy season, now just a few weeks away.

JOHN BOSCOE (Translation): Even now, many children are dying. When the rainy season starts it will be worse. It's dry now, but when it rains it becomes a catchment area. This place is like a dam that holds water from upstream.

Five months after the violence started, three months after a new prime minister was installed, and despite the presence of international peacekeepers, the outlook is still grim for these families. It has left many in despair about East Timor's leaders.

JOHN BOSCOE (Translation): They are not capable of fixing this problem and they are not capable of running the country. So independence - what for? But I am very emotional, so I say that because we have suffered enough. Life is too hard. We have lost too many family members. It's too hard.

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