6 Develop a global partnership for development

Where we are?

Children drawing during a day of MDG advocacy activities held in September 2012. Photo Louise Stoddard/UNDP TL
Children drawing during a day of MDG advocacy activities held in September 2012. Photo Louise Stoddard/UNDP TL

As a newly independent and a post-conflict nation, Timor-Leste is categorized as a Least Developed country (LDC), still in need of assistance from the international community. Inspite of its status as an LDC, Timor-Leste falls in the World Bank lower middle income bracket (US$1,026 – $4,035 GNI per capita, based on the Atlas method). Timor-Leste’s GNI per capita was US$5,446 in 2012 (2005 PPP $).

Net Official Development Assistance (ODA) includes grants or loans to countries on the Organization for Economic Cooperation and Development/Development Assistance Committee’s (OECD/DAC) list of aid recipients. This assistance is given by governments in order to support economic development and social welfare objectives, particularly to establish better youth employment opportunities, and increased opportunities to generate a sustainable income in the future.

In the years 2000–2005, ODA to Timor-Leste averaged US$200 million per year. In 2006, it rose to US$210 million, but started to decline to US$200 million from 2012.

In spite of these relatively high-levels of ODA, Timor-Leste’s labour market is not capable of absorbing large numbers of job-seekers. This is particularly the case with young job-seekers. An estimated 15,000 young people enter the labour market every year, while only 400 new jobs are created annually. With 50 per cent of the the population below the age of 18 years and continued rapid population growth, unemployment will remain a pressing problem.

In terms of other targets under Goal Eight, Timor-Leste has made a commitment to good governance, sustainable development and poverty reduction and focused particularly on establishing the foundations for an open, rule-based, non-discriminatory trading and financial system.

Between 2007 and 2009, key institutions were established, including the Civil Service Commission and the Anti-Corruption Commission and the National Petroleum Authority. New penal and civil codes were also adopted. Reforms have been implemented to begin the decentralization process and public financial management has been strengthened to provide better oversight, transparency and accountability. In 2009, new tax reforms gave Timor-Leste one of the lowest tax thresholds in the world.

Non-oil GDP has grown in double digits since 2008. Sound policies, particularly those related to the use of petroleum fund, have contributed to relative macroeconomic stability.

The private sector is small but growing, and public-private partnerships are still in a nascent stage. While there is small-scale investment in agriculture and in the service sector, direct foreign investment is still relatively small.

Mobile phone uptake has increased markedly with an estimated 35 per cent market penetration. As of 2013, the mobile phone market was deregulated, paving the way for multiple providers to enter the market.

Coffee represents the single largest export commodity among non-oil exports, giving the country approximately US$20 million a year. Service exports, though significant, reflect the large presence of donors and security agencies in the country.

Timor-Leste’s trade policy is liberal. Import tariffs are in line with the ASEAN standards and amongst the lowest in the world.

What needs to be done

  • Despite the high levels of financial aid provided to Timor since 1999, unemployment has remained high. The linkage between aid and employment generation – especially for young people – should be recognized as a strategic issue
  • With the help of international community, join ASEAN and integrate with regional economic and trading blocs.
  • Promote investment in ICTs and innovative uses of mobile technology.
  • Maximize the economic potential of remittances.
  • Promote private sector activities, including foreign direct investment in non-petroleum sectors.Increase the competitiveness of agricultural exports by removing supply-side barriers.

Sources: 2009 The Millennium Development Goals, Timor-Leste, RDTL and UN; Millennium Development Goals 2010, RDTL, National Statistics Directorate, Ministry of Finance and ICF Macro, 2010.

 

1.34 years
remaining
until 2015

1990 2015
Targets for MDG8
  1. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system
    • Developing countries gain greater access to the markets of developed countries
    • Least developed countries benefit most from tariff reductions, especially on their agricultural products
  2. Address the special needs of least developed countries
    • Net Official development assistance (ODA), total and to the least developed countries, as percentage of OECD/DAC donors' gross national income
    • Proportion of total bilateral, sector-allocable ODA of OECD/DAC donors to basic social services (basic education, primary health care, nutrition, safe water and sanitation)
    • Proportion of bilateral official development assistance of OECD/DAC donors that is untied
    • Market access
    • Debt sustainability
  3. Address the special needs of landlocked developing countries and small island developing States
    • Official development assistance (ODA) received in landlocked developing countries as a proportion of their gross national income
    • ODA received in small island developing States as a proportion of their gross national incomes
    • Proportion of bilateral official development assistance of OECD/DAC donors that is untied
    • Market access
    • Debt sustainability
  4. Deal comprehensively with the debt problems of developing countries
    • Total number of countries that have reached their HIPC decision points and number that have reached their HIPC completion points (cumulative)
    • Debt relief committed under HIPC and MDRI Initiatives
    • Debt service as a percentage of exports of goods and services
  5. In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries
    • Proportion of population with access to affordable essential drugs on a sustainable basis
  6. In cooperation with the private sector, make available the benefits of new technologies, especially information and communications
    • Telephone lines per 100 population
    • Cellular subscribers per 100 population
    • Internet users per 100 population