 |
|
|
|
|
|
|
 |
| USAID Information:
External Links:
|
|
|
|
|
|
|
|
East Timor
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Economic Revitalization | 472-001 |
11,367 |
|
|
| Support for Democratic Transition | 472-003 |
11,000 |
|
|
| Accelerated Economic Growth | 472-004 |
|
9,956 |
6,500 |
| Good Governance Strengthened | 472-005 |
|
8,912 |
5,000 |
| Improved health of the Timorese people | 472-006 |
|
2,956 |
2,000 |
| Total (in thousands of dollars) |
22,367 |
21,824 |
13,500 |
Excludes P.L. 480. See Program Annex.
|
The Development Challenge: On May 20, 2002, after 24 years of Indonesian occupation, East Timor became the first newly independent nation of the millennium. East Timor is one of the ten poorest countries in the world with an estimated population of 924,642. Its small domestic market, island status, extreme mountainous terrain, and poor infrastructure present formidable challenges. Seventy five percent of the population is rural of which 80% rely on subsistence agriculture and live on less than one dollar per day. Unemployment is estimated to be higher than 19.5% and the illiteracy rate is 57% with an average household level of education of less than three years. Expanding rural poor families' access to financial markets, strengthening rural market institutions, and expanding productive employment opportunities in rural areas, especially for women, is critical to reducing the high level of chronic poverty facing East Timor. Demographics in East Timor reflect a young population with approximately 50% under the age of 15 and with low levels of education. Strengthening public institutions and building local capacity remain one of the most critical issues facing East Timor. The maternal mortality ratio of 830 per 100,000 live births and the under-five mortality of 125 per 1,000 live births are among the highest in the world.
The 2003 World Bank Poverty Assessment highlights the daunting economic and human development challenges East Timor faces, estimating that 39.7% of the population is under the chronic poverty level. Rural families have less access than urban families to basic infrastructure and services such as clean water, electricity, education, information access, health care, and sanitation. Extensive deforestation and subsequent erosion reduces agricultural productivity, degrades water resources, and decreases terrestrial and coastal biodiversity. The reduction of United Nations (UN) presence in May 2002 created a serious contraction in economic activity and a reduction in the overall growth rate. There has been a strong decline in new foreign and domestic investments. Furthermore, labor costs are higher and productivity lower than in neighboring countries.
Despite these challenges, East Timor has made solid progress since 1999 in establishing a democratic state and revitalizing its economy and export market for coffee. It developed a new constitution, held legislative and presidential elections that met international standards, and established working democratic institutions. East Timor has established a Bank and Payment Authority and is a member of the United Nations, the International Monetary Fund, World Bank, and the Asian Development Bank. The Government of East Timor (GoET) has strong political will to implement economic reforms and increase its public investments in social development. Although the country continues to advance economic and social reforms, high population growth and low economic growth continue to impede achievements in improving livelihoods and reducing poverty.
East Timor's leadership has shown a consistent commitment to economic growth and poverty reduction. As a result, East Timor was designated on November 8, 2004 as a Millennium Challenge Account (MCA)-eligible Threshold Country. However, work remains to achieve full MCA candidate country status. East Timor reportedly failed (or lacked information in) the economic freedom category, but passed two other categories. However, rapid progress is possible to achieve in the economic freedom category given the willingness of the GoET to respond, dedication of the international community, and concentration of MCA threshold resources in this area.
During the next few years East Timor will continue to depend on the donor community to meet its core operating costs and social development needs. Projected Timor Sea's oil and gas revenues are higher than expected due to the current historical high price levels. However, the uncertainty of the current price and the outcome of treaty negotiations with Australia continue to make future revenue in the short term difficult to predict. Furthermore, the low level of domestic and foreign investment hinders the ability of the GoET to collect revenue. The GoET's core budget is expected to be fully financed from its own resources by FY 2008 or FY 2009.
The overall goal of the USAID program will continue to address the long-term development needs in accordance with key U.S. foreign policy interests in East Timor: democracy, economic prosperity, improved global health, and regional security.
The USAID Program: The USAID's newly approved five-year Country Strategy focuses on two strategic objectives and one special objective in health. The activities being carried out under the new strategy directly address East Timor's most pressing concerns: accelerating economic growth and job creation; good governance; and improving basic health services. The Economic Growth program will support job creation by improving the business enabling environment, improving markets, and increasing the production of selected products and services. At the same time, it will focus on increasing the capacity and skills of Timorese to perform better in new roles and job responsibilities. USAID's Democracy and Governance program will contribute to strengthening the foundations of governance by improving the rule of law and establishing a more effective democratic governance. This will be supported by increased transparency, accountability, and participation in government. The Health program will contribute to improved health through increased use of maternal and child health practices. This will be supported by a community health network consisting of church and other civil society groups established to effectively support key maternal and child health practices at the local level, and increased use of effective interventions to reduce the threat of priority infectious diseases. Building capacity at the local and national level is a major emphasis of all three program areas.
The three objectives of this strategic plan directly support the State/USAID Joint Strategic Goals for "Economic Prosperity and Security" and "Democracy and Human Rights" and the Performance Goal of "Improved Global Health, including child, maternal, and reproductive health, and the reduction of abortion and disease, especially HIV/AIDS, malaria, and tuberculosis". The economic growth program will assist the GoET in appropriate policy reforms, thus helping East Timor to transition from a threshold country to a full-fledged eligible country under the MCA program.
Other Program Elements: USAID's Bureau for Democracy, Conflict and Humanitarian Assistance (DCHA) has two programs in East Timor; a program to strengthen nongovernmental organizations (NGOs) that provide sustainable services to rural areas and a program that trains rural community groups to address the needs of survivors of torture. East Timor has received support for its national malaria program via the Global Fund for AIDS, Tuberculosis, and Malaria. A four-year program supported by the Global Health Bureau will strengthen key maternal and neonatal health. The Food for Peace Program will support a nutritional supplementation program by the World Food Program in coordination with government counterparts and the NGO community.
Other Donors: USAID actively participates in the GoET-led Donor Conferences and ad-hoc donor and GoET committee meetings to address urgent development issues. East Timor has been a primary recipient of foreign assistance since 1999 and USAID's overall contribution has amounted to approximately 18%. Thirty-five official donors and 18 UN agencies as well as the World Bank and the Asian Development Bank provide assistance to East Timor. The top three bilateral donors in East Timor are Portugal, Australia, and the European Union. The United States ranks fourth. Bilateral programs cover a wide area of activities such as budget support, health, education, and humanitarian assistance. These four areas account for 70% of the assistance provided to date to East Timor. Allocations for agriculture and rural development, basic infrastructure, water supply and sanitation, environmental protection and management, and private sector development received less support. The Transition Support Program (TSP), managed by the World Bank with contributions from the World Bank and nine bilateral donors including the United States, provides capacity building and balance of payment support to the GoET. The TSP is an important program for donor coordination and performance monitoring on a semi-annual basis. From FY 2002 to FY 2004, total TSP contributions amounted to $77 million, including $12 million from USAID. All activities have been closely coordinated with other donors to avoid duplication and to ensure synergy.
Back to Top ^
|
