The challenges for East Timor

Seven years after independence, poverty is one of the biggest problems facing East Timor. Meeting the Millennium Development Goals (MDGs) by 2015 is challenging. The World Bank (PDF 456KB) predicts that youth unemployment is widespread and currently runs at 43 per cent nationally and 50 per cent in Dili.

In 2002, when East Timor gained its independence, guided by its National Development Plan (NDP), the government was fully committed to working with both the international community and civil societies to “reduce poverty in all sectors and regions of the nation, and; to promote economic growth that is equitable and sustainable, improving the health, education, and well being of everyone in East Timor” (see East Timor National Development 2002 (PDF 1.27MB)).

This is said to be in line with the government’s commitments to meeting the millennium development goals set for 2015 which include to eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health, combat HIV-AIDS, malaria and other diseases; ensure environmental sustainability and Develop a Global Partnership for Development.

The 2006 crisis held back much of the progress which had been made under the first constitutional government. In order to revive the country’s shattered economy, the current government, under the leadership of Xanana Gusmao, chose to prioritise six key main areas known as the “2008 National Priorities” (PDF 353KB). These include “public safety and security, elections, justice sector strengthening, public sector strengthening, youth employment and skills development, and social reinsertion”.

Even though the 2006 crisis caused a significant setback, significant improvements have been made by the coalition government after the president was shot in an apparent coup attempt orchestrated by the deserted army leader, Alfredo Reinaldo. These include: the reintegration of Internal Displaced people (IDPs) to their communities; payments to former combatants and the elders; the provision of affordable rice to communities both in urban and rural areas.

Apart from that, the government also provides a significant number of scholarships to many East Timorese students to pursue their advanced study at various universities both within and outside of East Timor.

Within the health sector, scholarship has been provided for students to pursue medical training at the university level. At present, it is estimated that more than 1,000 East Timorese students are attending medical training in Cuba as part of bilateral co-operation between the Cuban and East Timorese governments. The reconstruction of clinics and hospitals in and around the country has now been completed, albeit some of them are still under way.

Strengthening food security in East Timor is another priority. Under the ministry of agriculture, the government has distributed tractors and seeds to rural farmers to boost agricultural production.

In spite of significant progress made by the coalition government, a number of problems continue to persist and hinder the government’s efforts to tackle poverty in order to meet MDGs. Last year Transparency International reported that under the coalition government, the effort to tackle corruption looks increasingly gloomy. Timor-Leste's position fell 22 places from 123rd to 145th - behind Kazakhstan and one place ahead of Bangladesh - for the period August 2007 to August 2008 (see 2008 Corruption Perception Index, Transparency International).

The persecution of journalists, and the arrest without warrant of ordinary citizens during the state of siege following the shootings on February 11 last year, and the recent suppression of student protests about the state budget and the purchase of luxury 4WD Prados for MPs is a discouraging development. So far the government has not conducted an investigation into the reports on these violations by the Ombudsman for Human Rights and Justice.

The existence of poor governance combined with a lack of accountability and transparency has hampered the government’s efforts in three consecutive years to secure funding from the Millennium Challenge Corporation promised by the USA congress in an effort to address the Millennium goals. The International Crisis Group (ICG) recently warned the East Timor government that while changes have been made, the government should stop being “complacent” (Timor-Leste: No Time for Complacency International Crisis Group, Asia Briefing, Asia Briefing N°87, February 9, 2009).

Actions must be taken to address the fundamental problems triggered by the 2006 crisis such as strengthening justice sector and carrying out security reforms. Furthermore, the government should avoid pursuing “buying off” policy where the population relies on the government’s handouts.

In the recent report to the Security Council on the extension of the UN presence, the Secretary General of the United Nations, Ban Ki-moon noted that despite the fact that significant progress has been made since 2006 crisis, poverty and unemployment continue to persist and addressing these problems remain the biggest challenge faced by the East Timor government.

According to the Human Development Index (2006), East Timor was ranked 158th out 179 countries which placed East Timor well below least developed countries like Congo, Sudan and Angola (see 2007/2008 Human Development Report). Reversing this trend implies that actions should be taken to address issues such as adult illiteracy, health, gender, income inequality, respect for human rights and political freedoms.

Can East Timor achieve millennium development goals set for 2015? There are four main areas the government needs to improve in order to achieve millennium development goals. These include: improving physical infrastructure, health and education, business environment, and enhancing national and international co-operation.

First, the government should immediately invest in infrastructure such as roads, communication networks, schools, hospitals, housings, electricity, water infrastructure such dams and reservoirs, agriculture and others. While it is true that many East Timorese leaders have expressed strong interest in halving poverty by 2015 (Jose Ramos Horta: On Poverty and the MDGs in Timor-Leste (PDF 25KB), September 25, 2008), so far the government failed to attract foreign direct investment that would create jobs and reduce poverty and unemployment. Currently, most of the government spending goes to pay the salary of civil servants and other unnecessary subsidies.

Importantly, one of the main obstacles for East Timor to encourage foreign investors to do business in East Timor is the poor infrastructure. Improving infrastructure would automatically attract foreign companies to invest in the country, stimulate local businesses to thrive and support local farmers to boost their agricultural productions, all of which would ultimately lead to job creation, boosting high income and reducing poverty.

Second, poverty is caused by the lack of education on the part of the citizens to participate and be directly involved in decision making processes that affect their lives. AusAid (2006) predicts that the adult literacy rate is only 58 per cent and that means combating illiteracy requires concerted efforts both from the government and donor countries. For that reason, the government should intensify a campaign to reduce illiteracy and improve health systems. Under the coalition government, education and health have become a major priority. In terms of the educational system, a combination of poorly trained teachers and underfunded schools produce poor results among students. Vocational training skills must be expanded to allow unskilled workers to enhance their capacity.

In the health sector, the government must encourage Timorese doctors to gradually take over full responsibilities from international doctors. While the government is credited for sending many Timorese to study medicine in Cuba, the government should now look for ways these future Timorese doctors can apply that knowledge in East Timor and avoid the so called “brain drain” syndrome that is being experienced by many developing countries.

Third, simplifying business regulations and improving the business environment in East Timor are vital for the economy. According to Doing Business (2009) (PDF 4.53MB), a report by International Finance Corporation (IFC), Timor-Leste was ranked 170 in the world and no major reforms have been reported. This indicates that East Timor, thus far, has not created a conducive environment for business.

Establishing a business friendly environment implies that the government must reverse these trends. Improving the business environment in East Timor means that the government should improve justice and security systems and install public confidence. This is because a lack of public trust in justice and security systems will further exacerbate the government’s efforts to address the development challenges facing the country.

Finally, East Timor should also strengthen bilateral and multilateral co-operation with ASEAN and Pacific regions notably Australia and New Zealand. By expediting ASEAN membership as well as joining Regional Pacific Economic Forum, this would help East Timor to gain diverse knowledge from these countries on how to improve economic performance and reduce poverty.

Furthermore, maintaining multilateral relations with the USA and Europe would allow East Timor to access technology and science. Such co-operation subsequently would assist East Timor to promote economic growth to improve the living standards of the East Timorese, and, at the same time, engender a respect for the environment without jeopardising future generations.