18 January 2013

LH advice on 2013 state budget

This week, La'o Hamutuk testified before two Committees of the Timor-Leste National Parliament about the proposed General State Budget for 2013.  We praised some good aspects, and identified other elements which need improvement.

You can download our written submission in English or Tetum.  It covers the following topics:
  • We appreciate the slower rate of escalation in the total budget.
  • Declining oil revenues should inform budget planning.
  • Double-digit economic growth, amidst inflation, does not benefit most people.
  • Parliament needs total cost information for the Tasi Mane oil infrastructure project and other multi-year projects.
  • Non-renewable electricity gets more and more costly.
  • The Contingency Fund should be smaller.
  • Important information is missing or confusing in the budget documents.
  • Veterans’ pensions: how much in future decades?
  • Parliament should analyze the risks of public borrowing.
  • The MDG-Suco housing program perpetuates past mistakes.
  • Government continues to neglect human resources.
  • Other legislation also requires attention.
We also wrote a short paper on energy policy, in Tetum.  More information, documents and analysis are on our frequently updated budget web page.


  1. Iha Timor ohin loron nian sei iha nafatin buat barak nebe ita precisa halo hodi harii buat hirak nebe seidauk halo, hodi hadia buat nebe ita halo la los no hodi hametin buat diak nebe ita harii ona. Hodi moris hanessan nasaun nebe bele halo ita hotu fihar katak ita bele ukun an duni, ita hotu hatene katak ita tenke buka harii ekonomia ida nebe buka hadok an hussi minarai nebe loron ida, nebe besik dadaun ona, sei maran. Iha nasaun ASEAN nia laran, wainhira ita hanoin ba ekonomia, Brunei Darussalam nia esperiencia besik liu Timor Leste. Sira, hanessan ita, rai ida nebe kiik, no mos hanessan ita, buat nebe sira hakarak halo hodi halo katak sira nia ekonomia la bele sadere makas liu ba sira nia minarai no gas, hanessan haburas sira nia agrikultura no pesca, harii turismo ida nebe bele dada turista, no industria nebe bele hamoris serbisu ba sira nia populasaun, liu liu foin sae barak nebe tinan tinan ramata sira nia estudo, rai maluk seluk iha ASEAN halo diak liu no barato liu.

    Wainhira ita kolia kona ba projeto Tasi Mane no osan bot nebe ita nia governo tenke gasta, ita hare deit ba Brunei hodi bele hatene serbisu hira mak projeto ne bele fo ba populasaun (iha Brunei, 5% ema nebe serbisu, serbisu ba industria minarai), maibe sektor ne halo osan bot ba nasaun. Bele hanessan ne, maibe hanessan ita hotu hare, wainhira ita usa ita nia osan ba projeto ne, osan la to’o hodi usa ba sektor seluk, hanessan agrikultura, edukasaun no saude. Brunei, maske nia iha infrastrutura explorasaun no produsaun minarai, gas no LNG (gas natural likido) nebe metin ona no mos fo esperiensia barak ba sira, sira bele hato’o deit 50% gazolina no gas nebe sira precisa, 50% seluk sira tenke sossa hussi liur. Ba ita, vantagem harii infrastura ba refina minarai ne, iha nebe? Ita nia kompetisaun mai hussi Indonesia, Singapura, Darwin no mos Brunei, nebe dalaruma bele refina minarai barato liu ita.

    Hanessan ita, Brunei mos buka hare sira nia vantagen iha sira nia situasaun geografika hodi buka plano ida nebe halo katak sira bele kompete ho maluk seluk iha ASEAN, hodi bele hetan osan hussi liur nebe la mai hussi fan minarai no gas. Sekarik maluk sira hakarak hatene tan bele hetan informasaun ne iha surat ida ne,"Development and Growth through Economic Diversification: Are there Solutions for Continued Challenges Faced by Brunei Darussalam?" nebe bele foti iha ne http://www.ifrnd.org/admin/jebs/3.pdf. Iha surat barak tan kona ba area diversifikasaun ekonomia Brunei nian nebe konsultor barak hakerek ona. Sekarik ita le surat sira ne, ita bele hare katak ema matenek nain sira ne hatudo nafatin buat nebe dokumento nebe hau rekomenda ba maluk sira halo badak. Wainhira maluk sira le, koko troka Brunei ho Timor Leste. Maluk sira bele hare katak buat barak nebe sira hassoru hanessan los buat hirak nebe ita hassoru. Maluk sira le ba hodi hanoin kona ba seida mak ita bele halo hodi hakat liu no hetan solusaun ba problema hirak nebe Brunei hetan, nebe la dok ba ita nia situasaun. Maibe ita labele haluhan katak Brunei osan barak liu ita, sira nia nia infrastrutura transporte, edukasaun, saude, be no saneamento, eletricidade kompleto no diak liu ita nian, no mos sira nia esperiensia ho industria minarai tuan no barak liu ita nian. Maibe sekarik ita nia governo no ita timoroan hanoin deit hanessan Brunei oan sira ita la bele hakat liu buat nebe Brunei oan sira, nebe halo plano hodi diversifika sira nia ekonomia hahu hussi sira nia plano dezenvolvimento nasional tinan lima lima ba dalarua (1962-1966) seidauk bele.

  2. (Same comments in English) In today’s Timor there is a lot that we need to do to build what we haven’t built, to repair what we didn’t build right and to reinforce the good things that we have achieved. In order to exist as a nation where all of us feel that we are really governing ourselves, we all know that we must build an economy that must move away from our dependence on oil, which one day, very soon, will run dry. In the nations of ASEAN when we consider the economy, Brunei Darussalam’s experience is the one that is closest to Timor Leste’s. Like us, they are a small nation and like us, they too wish to move their economy away from its dependence on oil and gas, through building up their agriculture and fisheries, establish a tourism industry that attracts tourists and put in place manufacturing industries that can create jobs for its population, particularly for their youth that every year complete their schooling. However, in all these sectors, the other nations of ASEAN can do it much better and much more cheaply.

    When we talk about the Tasi Mane project and the huge amount of money that our government must spend, we just need to look at Brunei to know how much employment this project can create for the population (in Brunei, only 5% of the labour force is employed in the oil and gas industry), even though this sector provides large revenues for the nation. Although this is the case, as we have seen, if we invest our money in this project, there will not be enough to invest in other sectors, such as agriculture, education and health. Brunei, despite having a well established experience and infrastructure to explore and produce oil, gas and LNG (liquid natural gas), is only able to produce 50% of the petrol and gas that it needs for its own consumption, the other 50% must be imported from other countries. Where is the advantage for us to build this oil processing infrastructure? We are competing with Indonesia, Singapore, Darwin as well as Brunei, who perhaps can process this oil much cheaper than us.

    Like us, Brunei is also seeking to define its relative advantage in its geographic situation in order to develop a strategy which will allow it to compete with the ASEAN nations, so that it can earn foreign revenues other than from selling oil and gas. If anyone wishes to know more you can find the information in this document “Development and Growth through Economic Diversification: Are there Solutions for Continued Challenges Faced by Brunei Darussalam?" which can be found at http://www.ifrnd.org/admin/jebs/3.pdf. There have been a number of reports that have been commissioned addressing the topic of diversifying Brunei’s economy and when we read them, we find that all the authors address the same points as summarised in the document that I’ve recommended above. If you do read the above document, just substitute Brunei with Timor Leste. You’ll find that the challenges that the Bruneians face are similar to what we face. If you read it, consider the challenges that we face and what possible solutions can be found to overcome these challenges, which are not too different from Brunei’s. Despite these similarities, we should not forget that Brunei has more money than us, their transport, education, health, water and sanitation and electricity supply infrastructure is more established and more complete than ours and they have more experience with the oil industry than us. If we and our government think just like the Bruneians think, who have planned to diversify their economy away from a reliance on oil and gas since their second five year national development plan (1962-1966), we too won’t be able to overcome these same challenges.