Developing the Non-Oil Economy in Timor-Leste

4 May 2011

Developing the Non-Oil Economy in Timor-Leste

Dili, 3 May 2011
Petroleum Fund revenue must target the development of the non-oil economy, especially the rural sector, in order to raise living standards, says Report.

Much progress has been made in Timor-Leste in recent years, but many people remain poor. Wealth from the oil resources must be utilised effectively to promote sustainable development of non-oil areas of the economy, and to reduce disparities between the urban and rural population. This is according to Timor-Leste's National Human Development Report 2011, launched today by President Jose Ramos-Horta and the United Nations Development Programme (UNDP).
The Report, entitled Managing Natural Resources for Human Development: Developing the Non-Oil Economy to Achieve the MDGs, presents the achievements of the country, thus far, and proposed strategies for development in the coming years.
The Report concludes that poverty levels have improved substantially since 2007. However, approximately 41 percent of the rural population continue to live in poverty.
Timor-Leste's Human Development Index (HDI) value for 2010 is 0.502, placing it in the medium human development category, with a ranking of 120 of the 169 countries reporting in the 2010 Global Human Development Report. This constitutes a rise of 11 places since 2005. Between 2005 and 2010, Timor-Leste's life expectancy at birth increased by more than two years, whilst mean years of schooling and expected years of schooling remained the same during this period. Timor-Leste's Gross National Income (GNI) per capitaincreased by 228 percent during the same period.
The Report recognises that the economic and social impact of the 2006 crisis in the country was severe. Subsequent governments have worked hard to address the underlying issues contributing to the crisis, and to establish national priorities for development. Despite the setbacks of 2006, Timor-Leste has managed to recover and achieve high rates of growth, largely due to increased oil prices and increased public spending. The Report highlights the fact that growth needs to be equitable:
"Policies to address levels of poverty cannot rely solely on the 'trickle down' effect of petroleum wealth, but as shown by the experiences of countries in the Southeast Asian region, policies and programmes must be put in place to ensure that growth is inclusive."
The challenge for Timor-Leste in the coming years will be how best to use the revenue from its Petroleum Fund, and to promote the development of the non-oil economy. Consequently the focus of Timor-Leste's National Human Development Report is on the following:
"How the country's petroleum wealth can most effectively be used for implementing pro-poor economic growth, developing the rural sector, enabling poverty reduction, facilitating employment generation and promoting private sector development."
Developing the non-oil economy
The agricultural sector provides livelihoods for around 70 percent of the population of Timor-Leste. Most of the people survive largely by subsistence farming. As the Report notes:
"Improving livelihoods in the rural sector requires sustainable improvements in a number of key strategic areas, most notably in agricultural productivity, promoting crop diversification, developing agricultural processing and in enabling the marketing of products – particularly those with export potential."
In addition, the Report identifies a number of other rural industries that are suitable for development. The fishing industry, for example, could be expanded through greater investment in boats, ice factories and transport.
Ecotourism also has economic potential. Timor-Leste has a number of coastal and inland sites that are ideal for the development of eco-friendly tourist villages, which would involve local communities and provide sustainable employment for village households.
"Successful implementation of policies to improve levels of human development requires a greater involvement in decision-making by those for whom these policies are devised. Hence, rural communities must be involved actively in development decisions affecting their livelihoods, via an effective decentralization to the districts and below," says Finn Reske-Nielsen, Deputy Special Representative of the Secretary General and UNDP Resident Representative in Timor-Leste, in his Foreword to the Report.
There are also non-rural parts of the economy that could benefit from greater development. In recent years, for example, there has been substantial growth in the construction industry. Other important sectors are wholesale and retail trade, health, education and social services, the hotel and restaurant trade, and security services.
Improving Timor-Leste's climate for business is critical for growth and for job creation. The current perception of the country's business potential is not particularly favourable. The Report identifies a number of issues that need to be addressed in order to counter this perception:
"Difficulties in resolving contract disputes; high communication costs; a serious lack of supporting services such as auditing, accounting and law practices; lack of a credit registry; limited transparency of procurement procedures; insecurity of tenure; difficulties in obtaining credit; and high risks associated with business closure."
Achieving the Millennium Development Goals (MDGs)
Timor-Leste has made substantial progress in many of the MDG areas. It has achieved its 2015 goals for infant and under-5 mortality rates, for antenatal care coverage, and for the proportion of tuberculosis detected cases. It is on-track to reach targets in other areas, such as net enrolments in primary education and proportion of population with access to an improved drinking water source.
However, Timor-Leste remains off-track for achieving a number of the MDGs targets, such as proportion of the population below the national poverty line, prevalence of underweight children under 5 years of age, and maternal mortality rate.
The Macro-Economic Framework presented in the National Human Development Report 2011 outlines strategies for the country to achieve all its MDGs by 2025. The Report argues that the strategies are:
"Feasible, financially sustainable, and will enable efficient and productive use of the Petroleum Fund, provided efforts are made to develop appropriate strategies for the development of the non-oil economy and primarily for the rural sector."
Population changes and tackling unemployment
"The country is experiencing demographic changes with profound implications for its future development," emphasised Timor-Leste's President Jose Ramos-Horta, in his message for the Report.
Timor-Leste has one of the highest birth rates in the world, and the majority of its population is under the age of 21. In addition, migration from the countryside to the capital, Dili, is extremely high. Dili has seen a population increase of around 150,000 since 1999, and the city accounts for around 22 percent of the total population of the country. These trends are difficult to sustain, both socially and economically, and particularly in relation to employment.
"The country requires a reasonably expeditious mix of policies enabling a reduction in fertility rates, and facilitating a reduction in the current high levels of rural-urban migration," is the recommendation of the Report.
To deal with unemployment in the longer-term, and to create a sustainable basis of development when petroleum revenues have declined, it is vital that the development of the non-oil economy be addressed.
Timor-Leste's National Human Development Report 2011 was authored by an independent panel of experts, with consultation and peer review by UNDP, the Government of Timor-Leste, and civil society partners. The principal objective of the NHDR is to raise public awareness and trigger action on critical human development concerns.
For further information, please contact:
Rui Gomes, UNDP Head of Pro-Poor Policy Unit, Dili, +670 7231571,

Dezenvolve Ekonomia Naun-Petrolífera iha Timor-Leste

Rendimentu Fundu Petróleu tenke foka ba dezenvolvimentu ekonomia naun-petrolífera, liu-liu setór rurál, atu nune'e bele hasa'e kondisaun moris, Relatóriu ne'e hateten.
Dili, 3 Maiu 2011 - Halo tiha ona progresu barak iha Timor-Leste iha tinan hirak foin lalais ne'e, maibé povu barak mak sei kiak nafatin. Rikusoin husi rekursu mina-rai nian tenke utiliza efetivamente hodi promove dezenvolvimentu sustentavel ekonomia área naun-petrolífera nian, no hodi redús diferensa entre populasaun urbanu no rurál nian. Ida-ne'e bazeia ba Timor-Leste nia Relatóriu Dezenvolvimentu Rekursu Umanu 2011, ne'ebé lansa ohin husi Prezidente Jose Ramos-Horta no Programa Dezenvolvimentu Nasoins Unidas nian (PNUD).
Relatóriu ne'e ho títulu Jere Rekursu Naturál ba Dezenvolvimentu Umanu: Dezenvolve Ekonomia Naun-Petrolíferahodialkansa ODM sira, aprezenta susesu nasaun ninian, to'o ohin loron, no propoin estratéjia ba dezenvolvimentu iha tinan hirak tuirmai.
Relatóriu ne'e fó konkluzaun katak nivel kiak nian hadi'ak substansialmente dezde 2007. Mezmu nune'e, maizumenus porsentu 41 husi populasaun sira iha área rurál sei moris nafatin iha kiak nia laran.
Valor Índise Dezenvolvimentu Umanu (IDU) Timor-Leste nian iha tinan 2010 mak 0,502, ida-ne'e tama iha kategoria dezenvolvimentu umanu média ho pozisaun da-120 husi nasaun 169 ne'ebé hato'o sira-nia Relatóriu Dezenvolvimentu Umanu Globál iha tinan 2010. Ida-ne'e hatudu katak Timor-Leste sa'e pozisaun 11 dezde tinan 2005. Entre tinan 2005 no tinan 2010, Timor-Leste nia esperansa ba moris bainhira partu aumenta liu fali tinan rua, ne'ebé signifika katak tinan eskolaridade nian hanesan nafatin durante períodu ne'e, Timor-Leste nia Rendimentu Brutu Nasionál (GNI) per kapita sa'e porsentu 228 durante períodu ne'ebé hanesan.
Relatóriu ne'e rekoñese katak impaktu ekonomia no sosiál husi krize 2006 iha nasaun laran maka'as tebes. Governu tuirmai serbisu maka'as hodi hatán ba kestaun fundamentál sira ne'ebé kontribui ba krize ida-ne'e, no hodi estabelese prioridade nasionál sira ba dezenvolvimentu. Maski iha obstákulu durante tinan 2006 nia laran, Timor-Leste konsege hetan rekuperasaun no alkansa taxa krezimentu ne'ebé aas, baibain tanba folin mina nian no mós despreza públika ne'ebé aumenta. Relatóriu ne'e subliña realidade katak kreximentu ne'e tenke iha ekuidade:
"Polítika sira hodi hatán ba nivel kiak nian la depende de'it ba impaktu rikusoin petróleu nian ne'ebé 'sulin husi leten mai kraik', maibé hanesan hatudu ona husi esperiénsia nasaun sira rejiaun Ázia Sudeste nian, katak tenke kria polítika no programa ruma hodi asegura katak kreximentu ne'e inkluzivu."
Obstákulu ba Timor-Leste iha tinan hirak oinmai mak oinsá atu uza rendimentu husi ninia Fundu Petróleu ho di'ak no hodi promove dezenvolvimentu ekonomia naun-petrolífera nian. Tuirmai, Relatóriu Dezenvolvimentu Umanu Timor-Leste nian foka ba buat hirak tuirmai:
"Oinsá rikusoin petróleu nasaun ninian bele uza ho di'ak ba implementasaun programa hodi promove kreximentu ekonómiku ba ema kiak, dezenvolvimentu setór rurál, fó biban ba redusaun kiak, fasilita kria kampu serbisu no mós promove dezenvolvimentu setór privadu."
Dezenvolvimentu Ekonomia Naun-Petrolífera
Setór agrikultura fornese nesesidade moris loro-loron nian ba maizumenus 70% husi populasaun Timor-Leste. Povu barak liu halo agrikultura hodi han-hemu de'it. Hanesan relatóriu ne'e hateten:
"Hadi'ak nesesidade moris loro-loron nian iha setór rurál presiza dezenvolvimentu sustentavel iha área estratéjika prinsipál ne'ebé barak, liuliu iha produtividade agrikultura nian, promove diversifikasaun kolleita nian, dezenvolve prosesamentu agrikultura no mós fó biban merkadoria nian ba ninia produtu sira - liuliu produtu hirak ne'ebé iha potensiál ba esportasaun."
Tuirmai, relatóriu ne'e idéntifika ona indústria rurál sira seluk ne'ebé apropriadu hodi hetan dezenvolvimentu. Nu'udar ezemplu, indústria kaer ikan nian bele haboot liután liuhosi investimentu ba ró, fabrika jelu nian no mós transporte.
Ekoturizmu mós iha potensiál ekonómiku. Timor-Leste iha fatin sira iha Kosta no interiór ne'ebé di'ak tebes ba dezenvolvimentu suku ekoturizmu nian ne'ebé bele envolve komunidade lokál no bele fornese empregu sustentavel ba família hirak-ne'ebé hela iha suku refere.
"Implementasaun polítika hodi hadi'ak nivel dezenvolvimentu umanu nian presiza envolvimentu di'ak iha foti desizaun ba hirak ne'ebé sei hetan benefísiu husi polítika hirak-ne'e. Nune'e mós, komunidade rurál sira tenke envolve ativamente iha desizaun sira dezenvolvimentu nian ne'ebé bele afeta ba sira-nia moris loro-loron nian, liuhosi programa desentralizasaun nian ne'ebé efikás ba distritu sira no mós iha kraik liután," hateten Finn Reske-Nielsen, Reprezentante Espesiál Adjuntu Sekretáriu-Jerál nian no Rezidente Reprezentativu UNDP nian iha Timor-Leste, iha ninia introdusaun ba relatóriu ne'e.
Ekonomia mós inklui parte naun-rurál nian ne'ebé bele hetan benefísiu husi dezenvolvimentu ne'ebé di'ak liu. Iha tinan hirak daudaun ne'e, nu'udar ezemplu iha ona kreximentu substansiál iha indústria konstrusaun nian. Setór importante seluk tan mak komérsiu boron no retallu, saúde, edukasaun no servisu sosiál, komérsiu otél no restaurante no mós servisu seguransa nian.
Hadi'ak klima Timor-Leste nian ba negósiu krítiku tebes ba kreximentu no mós kriasaun serbisu. Nasaun nia vizaun foun kona-ba potensiál negósiu nian ladún di'ak. Relatóriu ne'e idéntika ona kestaun barak ne'ebé presiza rezolve atu nune'e bele kontra vizaun ida ne'e.
"Difikuldade hodi rezolve disputa kontratu nian; gastu ba komunikasaun ne'ebé aas; falta apoiu servisu ne'ebé sériu hanesan auditoria, kontabilidade no mós pratika direitu nian; falta rejistu ba kréditu; no mós prosedimentu aprovizionamentu ladún transparente; serbisu la garantidu; difikuldade atu hetan kréditu; no mós iha risku ne'ebé aas katak negósiu la kontinua."
Alkansa Objetivu Dezenvolvimentu Miléniu (ODM sira)
Timór-Leste halo ona progresu substansiál iha área sira ODM nian. Timor-Leste atinje ona ninia objetivu 2015 nian ba taxa mortalidade infantíl no labarik tinan 5 mai kraik, ba kuidadu saúde antenatal nian, no mós ba númeru husi kazu morastuberkulozenian ne'ebé deteta ona. Timor-Leste iha progresu di'ak hodi atinje objetivu dezenvolvimentu iha área sira seluk, hanesan númeru labarik ne'ebé rejista an iha edukasaun primária no mós proporsaun populasaun ne'ebé hetan asesu ba rekursu bee moos ne'ebé di'ak liu.
Mezmu nune'e, Timor-Leste nia progresu ladún di'ak atu alkansa ODM balu, hanesan proporsaun populasaun ne'ebé moris iha liña nasionál kiak nian nia okos, prevalénsia husi labarik sira ho idade tinan 5 mai kraik ne'ebé krekas, no mós taxa mortalidade materna.
Kuadru Makroekonómiku nian ne'ebé aprezenta iha Relatóriu Nasionál Dezenvolvimentu Umanu tinan 2011 deskreve estratéjia sira ba Timor-Leste hodi alkansa ninia ODM hotu-hotu to'o 2015. Relatóriu ne'e hateten katak estratéjia hirak-ne'e maka:
"Viavel, sustentavel finansialmente, no bele fó biban ba uzu Fundu Petróleu nian ho efikás no produtividade, naran katak iha esforsu sira ne'ebé halo hodi dezenvolve estratéjia ne'ebé apropriadu ba dezenvolvimentu ekonomia naun-petrolífera nian no prinsipalmente setór rurál nian."
Mudansa Populasaun nian no Halakon Dezempregu
"Nasaun ne'e hetan mudansa demográfika ho ninia implikasaun profunda ba ninia dezenvolvimentu iha futuru," realsa Prezidente Timor-Leste nian Jose Ramos Horta iha ninia mensajen ba Relatóriu ne'e.
Timor-Leste nu'udar ida husi nasaun ne'ebé ho taxa natalidade aas tebes iha mundu, no maioria husi ninia populasaun sira ho idade menus husi tinan 21. Aleinde ida-ne'e, migrasaun husi foho mai sidade kapitál Dili aas tebetebes. Populasaun Dili nian sa'e maizumenus 150.000 dezde tinan 1999, no sidade ne'e hetan ona maizumenus porsentu 22 husi totál populasaun nasaun ninian. Aumentu ida-ne'e difisil atu sustenta, sosialmente no ekonómikamente, liuliu relasiona ho empregu.
"Nasaun ne'e presiza kombinasaun polítika iha tempu besik hodi hatún taxa fertilidade nian, no mós fasilita redasaun nivel migrasaun rurál-urbanu nian ne'ebé daudaun ne'e aas," mak rekomendasaun husi relatóriu ida-ne'e.
Atu rezolve problema dezempregu iha tempu naruk, no mós atu kria báze dezenvolvimentu sustentavel ida bainhira rendimentu petróleu nian tun ona, importante tebes katak presiza dezenvolve duni ekonomia naun-petrolífera.
Timor-Leste nia Relatóriu Nasionál Dezenvolvimentu Umanu Tinan 2011 (RNDU) hakerek husi peritu sira iha painél independente ida, ho konsulta no halo revizaun husi PNUD, Governu Timor-Leste nian, no mós parseiru sosiedade sivíl nian. Objetivu fundamentál husi RNDU nian maka atu hasa'e koñesimentu públiku no mós hahú halo asaun kona-ba preokupasaun dezenvolvimentu umanu ne'ebé krítiku.
Informasaun klaru, favor kontakta:
Rui Gomes, UNDP Head of Pro-Poor Policy Unit, Dili, +670 7231571,



As receitas do Fundo do Petróleo devem almejar o desenvolvimento da economia não-petrolífera, particularmente o sector rural, por forma a elevar os padrões de vida, diz o Relatório.
Dili, 3 de Maio de 2011 -Enormes progressos foram feitos em Timor