Timor-Leste, Asia’s youngest country, has moved past the strife of recent years and is undertaking the difficult task of building a strong, resilient economy that benefits all. ADB Country Director Paolo Spantigati explains how ADB is working with Timor-Leste to support the country's future development.
Dili, Timor-Leste - Since its 1999 independence referendum, Timor-Leste has made remarkable progress building institutions and infrastructure, and improving social services for its population. Yet, a lot remains to be done as the country's development prospects hinge on the prudent use of its petroleum wealth to finance high-quality, sustainable investments in physical and human capital.
ADB Country Director Paolo Spantigati explains how ADB is working with Timor-Leste to support the country's future development.
What are the challenges Timor-Leste is facing today?
Timor-Leste, I would say, has two very peculiar characteristics. The first one is that it has a very young population, and the second one is that it is benefiting from its oil revenues.
Timor-Leste has oil royalties and has a petroleum fund. So, it has some fiscal capacity, but it needs to develop long-term prospects for its population.
The biggest challenge is creating a non-oil-dependent economy. To do so, the government needs to provide basic services to the population, for example education and health, and at the same time build infrastructure.
This would allow the private-sector to grow and investments to happen so that the population can find jobs and build the country’s future.
How is ADB working to support Timor-Leste’s development plans?
The government has a strategic development plan with a set of priorities up until 2030. We are here to respond and support the government in the implementation of this plan.
The way I see it, we are here to support in two main areas. One is capacity-building. We are supporting most ministries, providing technical assistance for a number of reforms such as fiscal reforms, supporting the country's accession process to ASEAN, driving regional cooperation, etc.
The second area is to provide both finance and capacity for investment in development projects.
For example, we are probably Timor-Leste's biggest partner in the road sector. We are financing the construction of roads as well as the capacity to manage, operate, and maintain them, including taking climate change concerns into consideration.
“We are financing the construction of roads as well as the capacity to manage, operate, and maintain them, including taking climate change concerns into consideration.”
Paolo Spantigati, ADB Country Director
In sum, this is a two-pronged approach: on the one hand, we provide investment support, investment, and capacity, what ADB calls "finance plus, plus" - the resources as well as the capacity.
On the other hand, our support is more technically oriented, targeting key reforms such as private-sector growth. The aim is to create an environment that makes it easier for the private investor to come and operate in Timor-Leste.
What are the sectors ADB is involved in?
Going back to the two tenets, historically we have been supporting the road and transport sector. We have also been supporting education and vocational skills training, as well as in the water supply and sanitation sector.
The government has made very significant strides in, for example, telecommunication, energy, probably also the transport sector. In the future, water and sanitation is an area where ADB will partner with the government. We want to provide clean, safe water and sanitation to everyone in the country.
We may also be looking at other opportunities, depending on the government.
On the other hand, in terms of technical assistance and capacity building we will probably keep supporting fiscal reforms so that the government can generate larger fiscal revenues, which in turn will finance long-term development.
And we will keep supporting a number of other areas, including the coffee sector, which has a high potential, as coffee is the biggest export for the country after oil. We would like to help increase the volume and quality of coffee production so that Timor-Leste and its farmers can gain even more from the coffee sector.
What can ADB bring to its partnership with Timor-Leste?
ADB believes in the benefits of partnering together, so we think that what we can bring is not only finance as I mentioned earlier, the government has petroleum resources.
But ADB can also bring knowledge and new solutions. We can bring a wealth of experience from all around Asia as well as management and implementation capacity. This experience can ensure that the money is spent well, to the best of its potential. This partnership can be much more than just a financial one.
We have been building this relationship for years, and we will continue building it in the years to come.
What lays ahead for Timor-Lest in terms of development?
I think that the country will continue to develop its infrastructure. As I said, a lot has already been achieved. For example, more than eighty-five percent of the houses now have access to energy.
The main road corridors are being built and this will facilitate access to services for the population.
In addition, probably we will see growth in the private-sector, with more businesses opening up, providing services, and growing. The private sector will help develop the potential demographic dividend this country has. When Timor-Leste’s large, young population will come of age they will have an opportunity to work and build their future.
This is the challenge this country is facing in the next five to 10 years. The government is committed to taking this opportunity and turning it into a development success. ADB is equally committed, and I am sure that together we will deliver.
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