By Randy Fabi
(Reuters) - East Timor's independence hero and out-going prime minister Xanana Gusmao will stay in the cabinet as investment minister, the government said on Wednesday, raising questions about the independence of the new prime minister.
Gusmao, 68, a guerrilla leader who helped end Indonesian rule over the poor half island in 2002, resigned last week as prime minister. Former health minister Rui Araujo was appointed as his replacement on Tuesday.
The president approved the new prime minister's cabinet list that includes Gusmao as head of a newly created investment ministry, which is believed to oversee planning, infrastructure and the statistics department.
"He knows where the money is. The parts that he has got seems to be the agencies that have the most control over the country's money," Charles Scheiner, researcher at Dili-based think-tank Lao Hamutuk, said of Gusmao.
"No one knows yet how much independence Dr Rui is going to have as prime minister and how much Xanana is going to try pull puppet strings."
Gusmao, who was prime minister for nearly eight years after serving as the first post-independence president, said he stepped down to allow a younger generation to lead.
Araujo, East Timor's fifth post-independence prime minister, said the new cabinet represented unity and consensus.
Former president and Nobel Peace Prize winner Jose Ramos-Horta was not on the list of ministers who will be sworn in on Monday.
After decades under Indonesian rule, East Timor has struggled to develop economically since independence. Despite gas production worth billions of dollars, about of its 1.2 million people in poverty, the World Bank says.
Indonesia invaded East Timor in 1975, after Portugal abruptly pulled out of a colony it had ruled for three centuries, and annexed the territory later that year, maintaining a heavy and at times brutal military presence.
Indonesia later allowed a vote and the people of East Timor opted for independence in a violence-plagued poll in 1999.
(Reporting by Randy Fabi in JAKARTA; Editing by Robert Birsel)