The challenges for East Timor

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.