Just four years ago, East Timor’s fledgling ministry of finance was still controlled by foreign consultants recruiter by international donors, who reported only to these and did not even mention the department as part of their mission.
Now that has changed and they are receiving direct budget support.
“We’ve come a long way … everything [now] is inside the ministry, driven by the ministry, led by us. The donors themselves have turned around and are now convinced that [this] the best way,” East Timor Finance Minister Emilia Pires told Devex President and Editor-in-Chief Raj Kumar at the European Development Days in Brussels.
Pires acknowledged that direct budget support to promote country ownership of development products does have risks, but continuing with a “parallel system” will only undermine the assistance and its overall goal of building a country and making its development sustainable in the future.
“Yes, there may be leakage, but where is the leakage if you don’t put water into the pipe? Once you find out, then you fix that, and then you minimize the space for leakage,” she said regarding corruption fears when governments receive the funds directly. “Otherwise you never know and [never] get out of that vicious circle.”
Check out the above video for more insights from Pires about how her tiny nation is slowly building itself after decades of Indonesian occupation with generous help from donors all around the world.
Devex was at the European Development Days 2013. Check out our coverage of Europe’s leading global development event of the year.