Timor-Leste’s Socio-Economic Situation, Challenges, And Opportunities In Context Of Covid19

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United Nations believes that together we can achieve transformation that would enable girls, boys, women and men to realize their full potentials and contribute to a prosperous Timor-Leste that leaves no one behind

UN Resident Coordinator Roy Trivedy’s take on Timor-Leste’s socio-economic outlook and challenges ahead


Social and economic situation in Timor-Leste

Timor-Leste’s economic prospects for 2020 have been heavily constrained by the lack of a state budget for 2020, renewed political uncertainty as well as the global impact of the COVID-19 outbreak. The World Bank’s latest (May 2020) Economic Report estimates that growth (GDP) is forecast to contract by nearly 5 percent in 2020 – but we may see an even greater contraction of economy this year and there is a strong likelihood that this impact will continue to be felt for several years ahead. Public spending is likely to be constrained for the remainder of 2020 due in part to the duo-decimo regime in place as well as implementation delays in many public investment programmes owing to COVID-19. Another factor is the global reduction in remittances this year which will also have a social and economic impact on many families over the next year and possibly longer.

Timor-Leste has implemented several vital public health measures to help contain the spread of the virus, including restrictions on international travel; temporary closure of universities and schools; mandatory confinement of those infected or entering the country; and banning large on public gatherings. The Government has also announced a package of socio-economic support to families, businesses and employers and employees. It is vital that the socio-economic support package is implemented efficiently and quickly. An effective response to COVID-19 will require measures to contain the virus and strengthen the capacity of the health system, protect vulnerable households, support affected businesses, and ensure the continuity of public ser vices.

While the COVID-19 global emergency presents huge challenges, it also offers opportunities for national economies, businesses and public services to focus more strongly in future on more sustainable and equitable production and consumptions patterns. Nations that use this emergency to shift to more sustainable patterns of production and consumption, including greater use of clean-energy, are likely to come out of this emergency better placed for the future. The COVID-19 pandemic is also a wakeup call that we are only as strong as our weakest link in society: for Timor-Leste, this points to the need for investing in the diversification of economy (at national and municipal levels), building skilled-based human capital, and strengthening the country’s social safety nets.  To build resilience of communities in Timor-Leste to better withstand future shocks (be it economic and climate), we need greater investment in agriculture and fisheries, safe water and sanitation, renewable energy, as well as health, education and social protection.

UN’s support around growth and development of Timor-Leste

The United Nations family has supported a range of programmes in the country over the past two decades. We recently signed a new Cooperation Framework with the Government of Timor-Leste. This Framework covers the period 2021-2025. It builds on the experiences and lessons learnt from the previous programming cycle. The new Cooperation Framework, most importantly, recognizes the collective development efforts of the Government of Timor-Leste, the United Nations development system, development partners, the private sector and civil society in changing positively the lives of Timorese people. It sets out how Timor-Leste can accelerate progress to achieve the Sustainable Development Goals and realise the aspirations set out in the national Strategic Development Plan (SDP), driven by its overarching principle of inclusiveness, with all Timorese having the opportunity to contribute to, participate in, and benefit from national development.  In the coming years, the UN Timor-Leste will focus on six key areas: (i) supporting nutrition, food security and sustainable agriculture; (ii) promoting sustainable economic opportunities and decent work for all; (iii) building human capital from early childhood development and supporting life-long learning and skills; (iv) promoting quality health care and well-being; (v) strengthening accountable, inclusive and participatory governance and quality public services; and (vi) supporting sustainable management of natural resources and resilience to climate change.

In all its work, UN agencies will put greater stronger emphasis on respect for human rights, gender equality and inclusion. These outcomes will only be achieved through close partnership with the government (national and local) and other key stakeholders. The UN believes that together we can achieve the transformation required that would enable all citizens of Timor-Leste – girls, boys, women and men – to realize their full potential and contribute to a strong and prosperous Timor-Leste that leaves no one behind.

Current challenges

The immediate challenges for Timor-Leste include how to ensure that as we come out of the COVID-19 emergency period, the development gains that the country has achieved since independence do not slip. We need to protect the gains that the country has made and ensure that things like the rates of stunting and wasting, gender equality, access to education, health, water and sanitation and other services do not decline. Another important gain that must be protected is peace and social cohesion. Women and young people have a critical role to play in sustaining peace and stability in Timor-Leste.

The country also requires improved financial, and governance systems in line with its aspirations to move up from least developed to a middle-income country. And to increase investment in human development by: improving food security for all; promoting better learning and skills development for all especially youth; investing in health and well-being; strengthening public services; and supporting resilience to climate change. These are vital areas to ensure that as Timor-Leste comes out of the COVID-19 emergency, together we build a more sustainable and inclusive economy. They are also vital to assist Timor-Leste to achieve its national development aspirations and the Sustainable Development Goals by 2030.

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