The first positive case of COVID-19 emerged in Timor-Leste on 21 March 2020. A week later, 28 March 2020, the first national State of Emergency (SoE) was declared to prevent the spread of COVID-19, with an end date of 26 June 2020. The SoE, included actions such as domestic and international travel restrictions, closure of schools and physical distancing. Since the initial Decree, the SoE has been renewed monthly, and there have been sanitary fences and home confinements with varying degrees of restrictions and duration in different municipalities.
The nature of COVID-19 presented novel challenges for Timor-Leste. Restricting inter-municipality travel and the face-to-face interactions necessary for the large informal sector hit uniquely hard in a country with limited access to technological supports and relative geographic isolation. With 46 percent of the population being multidimensionally poor; and a significant majority of the population relying on small-scale subsistence farming, by the end of 2020, Timor-Leste’s progress towards SDG 1 (No poverty) and SDG 8 (Decent work and economic growth) had slowed. Like in many other small-island developing states, the impact of COVID-19 has also been compounded with climate change effects. In particular, Timor-Leste was hit by large-scale floods in April 2021.
Socio-Economic Impact Assessment of COVID-19 in Timor-Leste, Round 2, 2021 Micro, Small and Medium Enterprises (MSME) Survey in Timor-Leste
The global economic downturn due to the COVID-19 pandemic is having a disproportionate impact on low-income and emerging economies. Timor-Leste experienced the largest GDP contraction since its independence, significantly worse than the income loss during the 2006 civil unrest, and the 2017 political deadlock (IMF, 2021). In March 2021, the Government of Timor-Leste (GoTL) introduced lockdowns and other restriction measures to prevent the spread of COVID-19. These restrictions along with the global economic slowdown and oil price uncertainty plunged the local economy into severe contraction with expected real GDP per capita to slip down to the 2009 level. Timor-Leste’s non-oil businesses, represented mostly by micro and small enterprises, continue to be squeezed by the fallout of the COVID-19 crisis with looming long-lasting negative outcomes.
Based on the rapid Socio-Economic Impact Assessment of COVID-19 (SEIA-1) conducted by the United Nations (UN) with the technical lead of the United Nations Development Programme (UNDP) Timor-Leste in 2020, the private sector had been heavily impacted by the pandemic with 81.0% of micro, small, and medium enterprises (MSMEs) reported a loss of income, 26.0% reporting difficulty in paying staff, and 65.0% reported a drop in demand.
The United Nations Development Progamme is the leading development agency in Timor-Leste. Since 1999 we have assisted Timor-Leste to transition from post conflict recovery to sustainable development. In the decade to 2030 our focus is on advancing the SDGs in democratic governance, environmentally sustainable development, and economy prosperity.