UNDP National Human Development Report released

After three years of work, the United Nations Development Program (UNDP) has released its third Human Development Report for Timor-Leste, Managing Natural Resources for Human Development: Developing the Non-Oil Economy to Achieve the MDGs. The report was launched by President Jose Ramos-Horta on 3 May 2011, with observations by UNDP head Finn Reske-Nielsen, economist Rui Gomes, Dr. Rui Maria Araujo (Council of State), Deputadu Joaquim Amaral, UNTL Rector Aurelio Guterres, and Charles Scheiner from La'o Hamutuk. UNDP distributed an Executive Summary (also Tetum), a Press Release (also Tetum) and a Statistics summary (also Tetum).

La'o Hamutuk's comment Timor-Leste Must Win Independence from Petroleum (also PDF or Tetum), included a Tetum slide show. While supporting the objectives of the report, we focused on several points, including:

China is the only nation which has achieved long-term double-digit GDP growth, and we should plan with realistic goals of less than 7%.	UNDP changed how it calculates the Human Development Index to use GNI instead of GDP and years of school instead of literacy, which reduces its usefulness for Timor-Leste's extremely petroleum-export-dependent economy with an inexperienced, under-resourced educational system.

Timor-Leste spends much more now than in 2009, when much of the report's data was collected. The allocation for education and health dropped from 15.6% to 9.6%, although countries making progress toward the MDGs spend 28% on these essential investments in human resources,	Timor-Leste's population is growing rapidly, and there are twice as many children under 10 as young adults aged 20-29. Today 15,000 people enter the labor force every year; in 2023, when Bayu-Undan is exhausted, it will be 34,000.

Timor-Leste's total petroleum wealth is extremely limited, and income from cannot fund future State activities at today's levels of $2.65/person/day, even with optimistic assumptions.	Current spending policies could entirely empty the Petroleum Fund by 2030.

Follow the links above for more complete explanation, documents and references on these critical issues.

Provide input to TL Fragile States Paper

For Tetum, more up-to-date information and documents see La'o Hamutuk's web page on this process.

During the last two years, Timor-Leste has become one of the leaders of international processes relating to "Fragile States" and aid effectiveness.  In 2010, Dili hosted an "International Dialogue on Peacebuilding and Statebuilding," and a follow-up conference will be held in Korea later in 2011.  The National Directorate for Aid Effectiveness in the Ministry of Finance is consulting people on Timor-Leste's Country Paper for this process, and received comments on a mid-April draft by 6 May. La'o Hamutuk made a submission, as have others.

Public Meeting on Alternative Energy Law

(Tetum iha kraik)

How Alternative Energy Development Can Contribute to
Social, Cultural, Economic and Environmental Development
Thursday, 28 April 2011    9:00 am - 12:30 pm
NGO Forum meeting room, Kaikoli (beside the Ministry of Health)

Speakers: Avelino Coelho (Secretary of State for Energy Policy), Demetrio de Amaral (Director, Haburas Foundation) and Rui Pinto (academic representative)

The Government's Development Plan says that energy has an important role in improving social, economic and environmental development. The State Secretariat for Energy Policy (SEPE) has carried out many programs in alternative energy, including solar panels, jatropha biofuels and biogas. In addition, SEPE has developed an Alternative Energy Law.

La'o Hamutuk has organized this event to help people participate and share their thoughts about this law. The meeting will be in Tetum, although informal English translation can be arranged if necessary.

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Tuir Kuarto Governu Konstitusional iha Planu Desenvolvimento hateten katak setor energia sai papel importante atu hadiak setor sosial, ekonomia no meiu-ambiente. Aktualmente Governu AMP liu husi Sekretariu Estadu Politika Energetika halo ona programas barak kona ba energia alternativa hanesan, uza solar panel, ahi-oan mutin, biogas, nsst.  Alem ne'e, Sekretariu Estadu Politika Energetika desenvolve ona Lei ba Energia Alternativa nian.

La'o Hamutuk hanoin katak importante atu fahe informasaun kona ba asuntu sira ne'e ba publiku atu nune'e publiku bele partisipa hodi fahe mos sira nia hanoin kona ba lei ne'e. Tan ne'e La'o Hamutuk organiza Enkontru Publiku ho Tema "Oinsa Desenvolvimentu Energia Alternativa Kontribue ba Desenvolvimentu sosial, kultura, ekonomia no meiu-ambiente."

Narador sira mak hanesan: Senhor Avelino Coelho nudar Sekretariu Estadu Politika Energetika, Senhor Demetrio de Amaral nudar Diretor Fundasaun Haburas no Senhor Rui Pinto nudar Representante Akademiku.

Enkontro Publiku ne'e sei halao iha:
Loron:       Kinta, 28 Abril 2011
Horas:      09:00-12:30 OTL
Fatin:        Salaun Fongtil, Kaikoli (iha Ministeriu Saude nia sorin)

Ba ita boot sira nia atensaun no partisipasaun ami hatoo obrigada wain.

EITI 2009 report to be launched 25 March

Timor-Leste's compliance with the international Extractive Industries Transparency Initiative was accepted in July 2010, following the publication in late 2009 of its report on oil and gas payments here during 2008. The 2009 report will be released on Friday 25 March 2011, 3:00-6:00 pm, at the Ex-Mercado Lama Convention Center. This event will include comments from the NGO Forum, an EITI working group civil society representative, an oil company representative, a government representative and the President of Parliament.

We hope that this report, released more than 14 months after the reporting period, will provide important information about oil and gas revenues during 2009, which comprised about 80% of our economy and paid for 95% of state activities. This report will complete other 2009 annual reports which omitted data, including those from the National Petroleum Authority and the Ministry of Finance on the Petroleum Fund.

A pre-release version of Timor-Leste's 2009 report was analyzed by Revenue Watch Institute and compared with those from 22 other EITI-engaged countries. Timor-Leste's report ranks a little worse than average, as summarized in this excerpt from the RWI website.

For more information on EITI in Timor-Leste (mos iha lian Tetum), including the 2008 and 2009 reports and commentary, see La'o Hamutuk's website.

Update 6 April: La'o Hamutuk has posted the official version of the 2009 EITI Report to our website in four languages. 

Heavy Oil project collapsing under its own weight

La'o Hamutuk recently obtained the January 2011 report from the Italian company  overseeing the $900 million national electricity project, and we have added its information to our web page on this project, which contains background and context, as does our blog entry late last year. This project will use 3/4 of the $599 million allocated to Infrastructure Fund for 2011.

The January report portrays a drastic deterioration in the quality of the work, although the pace has picked up slightly. A contract was signed with the Indonesian company Tehate for the Liquica-Maliana-Suai-Cassa-Betano part of the grid, after negotiations with DCP fell through. Wärtsilä has begun work, and invited EDTL to send people to Finland and Italy in March to observe factory testing of the first three generator sets. The number of Timorese workers on the project has dropped to 331, along with 591 workers from China.

 Here are a few quotes from the report:

• "[EDTL] was disappointed during the visit made in Dili substation on January 20th to see the site in a state of neglect."
• "with the present trend we believe that the Contractor is not able to meet the completion dates given to H.E. the Prime Minister."
• "From Liquica substation up to Lospalos substation ... no substantial progress is visible. The number of towers in this north part of the Power Grid is 554, at the end of January a total of 249 towers were erected, but many of them have missing pieces, are incomplete and require additional time to make an overhaul."
• "The situation which seemed had improved as far as the quantity of the work is concerned had been badly darkened and affected by the quality of the workmanship. A lot of reparation works are required and therefore towers can not be considered completed."
• "The Contractor is invited once again to take action on the issue of the Timorese workers to be trained as tower erectors."
• "The conductors strung in the section of 10 towers in Hera-Manatuto has been heavily damaged and must be dismantled and done it again."
• The heavily deterioration of the quality of the workmanship in the transmission line, the tower erection and the stringing of the conductors are carried out in a manner which do not have a proper word to be described — ghastly — horrible, the photos produced as evidence of the quality of the work show that workers are not at all qualified rather they are common labourer. The Contractor is warned that all the towers with defects and conductors damaged will not be paid for till all adequate reparation is carried out. The Consultant had shown a lot of tolerance collaborating in order to have the work done fast, but there is a limit to be tolerant .... Those workers responsible of this situation are incompetent and should be sent back to China and replaced.
• "Attending this meeting [two weeks later] are also the Leaders of all the Tower Erectors Teams (previously requested by the Consultant) to give them a strong warning that if they continue to produce such disgusting quality of the works all of them will be dismissed and sent back to China. The photos produced as evidence left them astonished. We hope that the lesson taught them something. The Contractor is warned for the last time that drastic measures will be adopted."
• "Pollution and environmental problem. Once more the Contractor is reprimanded for the fact that in the weekly report it is mentioned that is taking good care of the situation, but in the reality it is a mess in every working place.
  Yesterday the sea side and the beach in Dili were scattered with hundreds of pieces of red plastic sheets used to wrap up the steel structures bundles for protection during transportation, so it means that in Hera-Manatuto-Baucau all the waste are dumped in the sea and from there the current transported all these polluting waste up to Dili. Fisherman made a lot of complains for the fishing area polluted and all these plastic trapped in the fishing nets.
  CNI22 does not make a good reputation of itself."
• Two weeks later, CNI22 objected: "The Contractor considers the statement made by the Consultant exaggerated, but it is not because photos are there as evidence and fishermen can be questioned all the time."
• "The Contractor in the weekly reports always states that is taking good care of the [environment] situation keeping all the places clean and under control, but in the reality it is not like that, nothing or very little is being done concerning the protection of the environment."
• CNI22 and EB pointed fingers at each other about approval of drawings for transmission line materials, with EB calling CNI22's claim that EB is holding up purchasing by failing to sign off on drawings "totally groundless."
• "The Consultant reminded once more that the quality of finishing works [at Dili substation] must be improved. ... In the 20Kv building the concrete floor done is not in accordance to the drawing and must be demolished and removed."
• "Unprofessional handling of the materials during loading, unloading and transporting from the year to the site that causes minor to heavy damages of the materials."
• "Coordination to local residents around the work sites is not properly handled."

The January report reiterates concerns in previous reports about worker safety, health, housing, pollution, littering, sanitary facilities, lack of required permits, and failure to report or monitor environmental issues. "To date, [CNI22] has yet to commence the implementation of the [March 2010] Environmental Management and Monitoring Plan."

The Government's oversight of the project is lackadaisical, with only a few EDTL representatives attending project meetings. Although "by instruction of the Prime Minister, no compensation should be paid for the land," several land disputes have been left to the companies to work out. CNI22 blames EDTL for delays in clearing material through the port and customs, although ELC/Bonifica says it is the forwarding agent's fault.

Nevertheless, $90 million of Timor-Leste's money was spent on this project during 2010, $447 million more is allocated for 2011, with more than $370 million to follow. The EDTL project manager pointed out that Timor-Leste's National Parliament, by enacting the 2011 state budget, has "announced officially that the project will be completed within the year 2011, is CNI22 in the position to guarantee this time schedule?"

IMF report discusses critical economic issues

The IMF has just released its annual report on Timor-Leste's economy and financial management, dubbed the Staff Report for the 2010 Article IV Consultation. This year's edition is more than 70 pages long, and includes a Debt Sustainability Analysis co-authored with the World Bank.

The IMF reached different conclusions than the Government about a number of things in "the most oil-dependent economy in the world," including forecasts of non-oil GDP and advisable levels of public spending. They wrote that "Large uncertainties surround the medium-term outlook, including the path of oil prices and production, the magnitude and quality of public spending, and progress in business-enabling structural reforms." They observed that "spending at a slower-than-planned pace, consistent with the absorptive capacity of the economy, would stand a better chance of realizing high quality projects and crowding in private investment."

The report includes a statement conveying the Government's dissenting views.

As the IMF website can be difficult to access, La'o Hamutuk has copied the documents to our site. You can download the complete report (1.3 MB), which includes the following documents:

• Staff Report for the Article IV Consultation
• Informational Annex to the above Staff Report, on RDTL-IMF relations, World Bank-IMF Collaboration, relations with the Asian Development Bank, and statistical issues
• Joint World Bank/IMF 2010 Debt Sustainability Analysis
• IMF staff statement on new developments through 19 January 2011
• Public Information Notice summarizing IMF Executive Board views on 28 January
• Statement by IMF Executive Director for Timor-Leste, explaining where the Government disagrees with the IMF Article IV report

The IMF report relates to several important issues which La'o Hamutuk works on, including the 2011 State Budget, borrowing, the Strategic Development Plan and revising the Petroleum Fund Law. We will continue to analyze and publish about its observations and recommendations.

Corruption and the Resource Curse in Timor-Leste

La'o Hamutuk was recently asked to give a presentation as part of the Strategic Planning for Timor-Leste's new Commission Against Corruption. Our Tetum-language presentation (also translated into English) focuses on lessons to be learned from other countries as well as the characteristics of oil-export-dependent economies that encourage corruption. We pointed out some signs of corruption which can be found in budget, documents and suggested that CAC form a legislative division to ensure that future laws can prevent, rather than allow, corruption.

La'o Hamutuk foin halo aprezentasaun ba planimentu estratejeiku Komisaun Kontra Korrupsaun (CAC) nian. Ami nia aprezentasaun iha lian Tetum (mos iha Ingles) inklui buat balu Timor-Leste bele aprende husi rai seluk, no mos karakteristika ekonomia depende makaas ba exportasaun mina rai, bele hamosu korrupsaun. Ami dehan katak dokumentu husi Orsamentu Estadu bele fo indikasaun ba korrupsaun, no mos sujere katak CAC bele kria divisaun legislativa ida atu garantia katak lei foun sira bele prevene, la'os fasilita, korrupsaun.

Click for information on the draft Anti-Corruption Law currently before Parliament.