Resources mobilization for the implementation of the Brussels Programme of Action:

The Experiences of Timor-Leste

ECOSOC High-Level Segment Preparatory Meeting New York, 17-18 March 2004

Presented by:Aicha Bassarewan, Vice Minister of Planning & Finance, RDTLHaoliang Xu, Senior Deputy Resident Representative, UNDP

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Timor-Leste was formally recognised as LDC in December 2003 (GA/10221)

SOUTHEAST ASIA MAP

2

TIMOR-LESTE MAP

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Demography• Population: 794,298 (estimate 2001)• 76% rural (as % of total)• Annual population growth rate: 0.90%

(1999-2001)• Population under 15 years old: 44%

(estimate 2001)• Dependency ratio: 82% (2001)• Fertility rate (children/woman): 7.1

(estimate 2002)

Life expectancy and Mortality • Life expectancy at birth - Male: 55.6 years;

female: 59.2 years (2001)• Infant mortality rate/1,000 live births: 80.1

(2001)• Under-5 mortality rate/1,000 live births:

143.5 (2001)• Maternal mortality rate/100,000 live births:

420 (1999)

Poverty• Population below US$1-a-day: 20% • Population below national poverty line:

41%

Inequality• Gini index: 37%

Education• Adult literacy rate (as % of those aged 15

and over): 43% (estimate 2001) • Net enrolment ratio (primary education):

76%

Infrastructure• Access to improved water source: 50%• Access to piped or pump water: 42%

Economy• GDP: US$389m (estimate 2001)• GDP per capita: US$478 (estimate 2001)

Source:UNDP National HumanDevelopment Report

KEY FIGURES

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Emergency relief, rehabilitation & reconstruction

Transition Medium to long-termdevelopment

Popular consultation followed by

violence

Election of Constituent Assembly

Restoration of independenceETTA ETPA

UNMISET consolida-

tionphase?

UNAMETINTERFET followed

by UNTAET

UNMISET

End of UNMISET mandate?

LisbonDonor C.

Tokyo Donor C.

Canberra Donor C.

Oslo Donor C.

Brussels Donor C.

Dili Donor C.

TLDPM TLDPM TLDPM

MDG Workshop

MDG Report

Joint Assess-mentMission

TSP I TSP II TSP III

Substantial oil revenue expected to come inCreation of

FDTL & PNTL

National Development Plan

Road Map SIPs

Vision 2020

CNRT Tibar conference NDP II

KEY MILESTONES OF TIMOR-LESTE FROM 1999

20021999 2000 2001 2003 2004 2005 2006 2007

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Bilateral and Multilateral

Support

CFETTSPTFET

Direct services to communities

from NGOs

United Nations Assessed

Contributions

Funding

National Development Plan

(NDP)

Timor-LesteVision 2020 MDGs

Government Ministries and

Secretaries of State

Non-Governmental Organizations &

Civil Society

Private Sector and Business Groups

Implementation

Bilateral and Multilateral Donors

NATIONAL PLANNING FRAMEWORK

Prioritising &Sequencing

Donor Country Assistance Strategy (CAS)

Annual Action PlansQuarterly Review Matrices

Annual Budget

Planning & Budget

Medium-Term Fiscal Framework

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The state will be based on the rule of law.

The economy and finances of the state will be managed efficiently, transparently, and will be free from corruption, and

Living standards and services will improve for all East Timorese, and income will be fairly and equally distributed,

Production and employment will increase in all sectors,

They will actively participate in economic, social and political development, promoting social equality, nationalism and unity,

People will be literate, skilled, healthy and live a long and productive life,

Timor-Leste will be a democratic and prosperous society with adequate food, shelter and clothing for all people and a sustainable environment,

Vision 2020

Millennium Declaration (Good Governance)

Millennium Declaration (Good Governance)

GOAL 1: Eradicate extreme poverty and hunger

GOAL 1: Eradicate extreme poverty and hunger

GOAL 3: Promote gender equality and empower women

GOAL 2: Achieve universal primary educationGOAL 4: Reduce child mortalityGOAL 5: Improve maternal healthGOAL 6: Combat HIV/AIDS, malaria and other diseases

GOAL 1: Eradicate extreme poverty and hungerGOAL 7: Ensure environmental sustainability

MDG

TIMOR-LESTE VISION 2020 & MDGs

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• Significant amount of resources have been provided

• Humanitarian assistance has been phased out

INTERNATIOAL FINANCIAL SUPPORT 1999-2003

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INTERNATIOAL FINANCIAL SUPPORT 1999-2003

Source: The Government of Timor-Leste

99/00 00/01 01/02 02/03

US$ Million

Other donor support

Committed funds

TFETCFET & Related

99/00 00/01 01/02 02/03

Expenditure

196202 208

179

142

205 221

188

Development and TAHumanitarian/EmergencyBudgetary support

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Emergency relief & food security

16

Programme & Budget Support

14

Governance, Civil Service,

Capacity19

Environment natural resources

0Private sector & business

4Water & sanitation

6Basic

infrastructure9

Education & training

9

Agriculture & Rural

Development10

Health Care9

Agency fees2

Other social2

INTERNATIOAL FINANCIAL SUPPORT 1999-2003100%= US$ 757 million%

Source: The Government of Timor-Leste

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• Following the initial rehabilitation phase, external assistance is decreasing

• High population growth rate, requiring increasing government spending

• Low agricultural productivity and limited tax base

• Timor-Leste expects sizeable oil income, but the IMF estimates that the present value of Timor Sea revenue sustains annual expenditure of USD 55 million

• Substantial oil revenues from Timor Sea are estimated to start by 2007, some 3 years later than expected initially

• Therefore, the medium outlook is particularly difficult

REVENUE AND EXPENDITURE PROJECTION

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0

50

100

150

200

250

300

350

MEDIUM TERM REVENUE AND RESOURCE REQUIREMENTSUS$ Million

02/03 03/04 04/05 06/0705/06

Other donor fundingTFETTSPTimor Sea Tax RevenueDomestic revenue & reserves

Resource requirement (as per Road Map)

Funding gap

Source: The Government of Timor-Leste

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0

50

100

150

200

250

300

350

400

2002

/0320

03/04

2004

/0520

05/06

2006

/0720

07/08

2008

/0920

09/10

2010

/1120

11/12

2012

/1320

13/14

2014

/1520

15/16

2016

/1720

17/18

2018

/1920

19/20

2020

/2120

21/22

2022

/2320

23/24

NDP2007

BPOA2010

MDG2015

Vision2020

LONG TERM REVENUE AND RESOURCE REQUIREMENTSUS$ Million

Sustainable use of oil revenue(IMF estimates)

Total funding requirement

Plus other domestic revenue

Funding gap

Oil revenue

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• Even if Timor-Leste decides to borrow, the amount of concessional loans it can borrow from multilateral sources is extremely limited

• Timor-Leste is a small island country and vulnerable to exogenous shocks (trade, natural causes)

• Without continued and adequate external support, the past investment of the international community may be at stack

• Goal 8 of the Millennium Development Goals

REVENUE AND EXPENDITURE PROJECTION

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7. Mobilizing financial resources

6. Reducing vulnerability and protecting the environment

5. Enhancing the role of trade in development

4. Building productive capacities to make globalization work for LDCs

3. Building human and institutional capacities

2. Good governance at national and international levels

1. Fostering a people-centred policy framework

Commitments

Domestic revenue and fee based services, Aid coordination -TSP, SIPs, IDA grants, bilateral and multilateral support, FDI potential

UNCCD signed, first GEF project, large water management programme started, capacity for environmental governance, rural energy and resource management a key, NDMO

ACP/Cotonou agreement signed May 2003, South-West Pacific Dialogue, Pacific Islands Forum (permanent official observer), Seeking observer status at ASEAN, ASYCUDA

Massive rehabilitation and restoration of infrastructures but still facing daunting challenges, telecom network in place, private sector development still a challenge, agriculture a key

Adequate percentage of resources for primary education and basic health care, limit on spending for universities and hospitals, immunisation, vocational training, Census 2004

Civil Service Act, Office for Promotion of Equality, Office of the Inspector General, Human Rights Unit, Provedor, Justice Sector and Parliament Support programmes

Country-wide consultation that resulted in Vision 2020 and NDP process, Poverty Assessment & public dissemination, MDG report, strong aid coordination effort and database

Achievements / Opportunities

TIMOR-LESTE AND BRUSSELS PROGRAMME OF ACTION

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With the continued support of the international community,Timor-Leste can and will achieve itsdevelopment goals.

Thanks you!