Timor-Leste

Timor-Leste ratified the ACP-EC Partnership Cotonou Agreement on 19 December 2005 and benefited from an amount of €18 million for the two years remaining under the 9th European Development Fund (EDF) with the areas of sustained rural development and institutional capacity building. The country is now included in the programming of the 10th EDF and has been allocated an initial amount of € 66 million (including support to PALOP governance based initiatives). There is a good deal of continuity in the approach of this country strategy and the previous strategy under the Asia-Latin America budget line of which the country received development assistance since its accession to Independence in 2002. The framework is based on EU/ACP co-operation objectives (notably the reduction of poverty and integration of developing countries into the world economy), the Government of Timor-Leste’s (GoTL) own development policies, an analysis of the political, social and economic situation in the country, and an assessment of past co-operation programmes with the EC and other donors.

The National Development Plan 2003-2007 (NDP), the Stability Programme and the Sector Investment Programmes establish the Government’s vision for national development. The NDP has two strategic pillars of i) poverty reduction and ii) equitable and sustainable economic growth. The Stability Programme targets activities under the objectives of job creation, good governance and poverty reduction (the latter through education and health).

Timor-Leste has emerged sovereign recently after a 24 year colonial period of underdevelopment and a struggle to gain independence from Indonesia. It is a young and still very fragile nation as evidenced by the recent serious political and humanitarian crisis which is still far from being over. The latter will only be resolved by addressing its turbulent past and human rights’ violations. In terms of identity and nation-building, Timor-Leste will also need to address and to work for constructive relations with its neighbours. The new country needs to address a number of challenges, i.e. to alleviate widespread and structural poverty, particularly in rural areas, to create sustainable livelihoods for its population and to build human and institutional capacities. Timor-Leste is just beginning to benefit from substantial off-shore oil and gas reserves, a situation which offers great economic potential but also the danger of mismanagement and corruption.

Main objectives and intervention areas (Indicative programme: € 66 million)

1. Sustainable rural development: socio-economic development of the poorer rural areas, in order to achieve sustained poverty reduction and food security and improved service delivery. This supports the GoTL’s own sector investment plan for agriculture and rural infrastructure such as rural roads, water supply and electricity. Indicative allocation: € 35 million.
2. Health: improve the availability, accessibility and affordability of health services to all people in Timor-Leste and the participation of the community and other stakeholders in the implementation of the National Health Plan. Indicative allocation: € 8 million.
3. Institutional capacity building, which is in line with the GoTL’s goal of achieving sustainable national capacity for improved service delivery within the Executive and in the institutions which are responsible for checks and balances. Indicative allocation: € 12.5 million.
4. Non focal sectors: Support to the civil society including gender and environmental initiatives and Technical Cooperation Facility: Indicative allocation: € 8 million. Support for PALOP governance based initiatives: € 2.5 million.