Top donors to East Timor

More than a decade after it was declared the world’s newest nation, East Timor seems intent on putting its violent past behind and focusing on sustaining economic growth and development progress. Located between Indonesia and Australia — two countries that see themselves as main players in the Asia-Pacific — East Timor seems strategically placed to play a larger role in the region. Its recent transition to the Human Development Index’s medium development category is a good sign that it is serious about improving conditions in the country. East Timor has set some ambitious goals for itself as well. It has hopes of joining the Association of Southeast Asian Nations, a group of countries in the region that are working toward economic integration this year. More importantly, East Timor is among the countries targeting to reach upper-middle-income status by 2030. But while it has recently enjoyed economic growth from offshore oil reserves, a host of development challenges — poor infrastructure, an agrarian economy dependent on subsistence crops, a small private sector dominated by informal employment, low levels of education, and a legal system undermined by concerns over judicial independence — impedes the momentum that East Timor needs to propel itself into the middle-income track. The Southeast Asian nation’s donors, which comprise a diverse mix of countries that include longtime partners and emerging donors, have been helping the country achieve this goal. Below, we look at what these donors have been contributing to East Timor’s development. Since data on the amount of aid disbursed in 2014 is not yet available, the figures are based on donors’ 2014 spending plans. Australia ($90.5 million) Despite recent revenue from offshore petroleum, East Timor relies heavily on agriculture, which employs up to 80 percent of its population. Through the Australian Center for International Agricultural Research, Australia has been helping to continue the Seeds of Life program, an initiative funded by both the East Timorese and Australian governments that aims to develop a sustainable national seed system in East Timor. Now on its third phase, the program has been prioritizing increasing the yields of staple food crops. World Bank ($40 million) Approved operations from the International Development Association and the International Bank for Reconstruction and Development were worth $40 million last year. The World Bank’s country partnership strategy for East Timor from 2013 to 2017 centers on three areas: improving the delivery of education, health and social services; creating infrastructure to enhance East Timorese people’s access to jobs and markets; and lessening dependence on oil reserves by advancing agriculture and private investment. A theme that cuts across these priorities is the emphasis on raising the quality of spending through better institutions. Japan ($26.2 million) The bulk of Japan’s aid has been devoted to revamping East Timor’s ailing transport infrastructure. A five-year project designed to improve the conditions of East Timor’s National Road No. 1, which is expected to be concluded in 2017, is the focus of this effort. Meanwhile, lengthening the life span of the Mola Bridge — a symbol of friendship between East Timor and Japan inaugurated in 2011 — is also among Japan’s priorities. Asian Development Bank ($13.3 million) Emergency infrastructure was the focus of ADB assistance to East Timor when it became an independent state in 2002. Today, ADB is still largely involved in boosting infrastructure, but with a longer look toward supporting East Timor’s economic development and integration with Southeast Asian economies — an area that according to ADB’s 2011-2015 country partnership strategy for East Timor “will receive special attention.” Cross-border infrastructure and associated trade services with Indonesia are part of the plan to link East Timor with the region. European Union ($11.4 million) EU aid to East Timor is concentrated in good governance and rural development. Among the objectives for these two areas is to expand the checks-and-balances capacity of state and nonstate actors and to rehabilitate rural roads for increased access to economic opportunities and government services. According to the indicative timetable for the EU’s commitment of funds to East Timor, 95 million euros ($113.5 million) will go to both good governance and rural development as well as support measures — 30 million euros for good governance, 57 million euros for rural development and 8 million euros for support measures — until 2019. United States ($9.9 million) Heavily criticized for providing military aid to Indonesia during the occupation of East Timor, the United States now has strengthening democracy and governance among its key objectives in the country. For instance, the U.S. Agency for International Development’s Ba Distrito, or “To the Districts,” program helps around 100 sucos, or villages, deliver services to communities more efficiently. Research from The Asia Foundation confirms this: 4 out of 5 East Timorese are likely to consider their community leaders, more so than any state institution, the main figure for creating and implementing the rules that shape their lives. Portugal ($7.6 million) Much of Portugal’s bilateral aid — almost 94 percent in 2011 — goes to Portuguese-speaking countries, including East Timor. But Portuguese aid disbursed to East Timor over the past several years has been on a steady slump: from a peak of $45.2 million in 2007, official development assistance to East Timor dropped to $16.6 million in 2013. Still, this year, Portugal plans to channel $8.2 million, or an 8 percent increase from last year’s planned spending, to East Timor. New Zealand ($5.4 million) Private sector development and security are among the priorities of New Zealand’s aid to East Timor. With USAID, the New Zealand Aid Program funds a coffee farm rehabilitation program that augments the income of farmers and communities through training and better linkage to national and international markets. Advisers from the New Zealand Police, meanwhile, assist East Timor’s National Police Force to come up with a community policing model to promote safe communities across the country. South Korea ($3.4 million) Having turned itself from a war-ravaged country to a budding donor in a matter of decades, South Korea is eager to pass on lessons from its rapid rise from poverty to developing countries. In East Timor, it invests in human capital by directing its aid toward health and education — two areas that South Korea itself has shown to have successfully promoted. South Korea’s Jeju Island, a special self-governing province, also has its own aid program, which draws on its recovery from conflict to nurture peace in East Timor. Germany ($3 million) Germany’s early work in East Timor largely involved delivering food aid and supplying drinking water. Recently, Germany has focused on peace-building efforts, such as building on a peace fund that financially supports nongovernmental organizations and services for young people aged 16 to 30. Maritime transport is a secondary, but nevertheless salient, part of German aid to East Timor. The Berlin-Nakroma, a ferry financed by Germany, not only created a link between the island of Atauro and the capital Dili, but also paved the way for the financing of a second ferry — a project that the East Timor government has heavily invested in. Check out more practical business and development advice online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.