14 September 2013

Konsultasaun ba proposta Kódigu Mineiru hahú ona

Informasaun foun, Junu 2014: MPRM hatete ba La'o Hamutuk katak sira muda ona sira nia planu, no sei LAIHA konsultasaun publiku iha Dili kona-ba ezbosu lei ida ne'e.  Sira hanoin atu haruk nia ba Konsellu Ministru iha tempo badak.

Ministériu Petróleu no Rekursu Minerais ko’alia ona ho ema barak iha nasaun ida ne’e kona ba ezbosu Lei Mineiru ba lisensiamentu no regulamentu operasionál minerais nian iha nasaun ne’e. Konsultasaun primeiru iha Oekusi hahú iha 26 Agosto, no konsultasaun tuir mai sei hala’o iha Suai iha 25 Setembru. La’o Hamutuk sírkula ezbosu lei ne’e no liu husi pájina ne’e ami enkoraja ita boot sira atu estuda no fó sujestaun.

Operasaun mineiru kria problema barak ba ema iha mundu tomak. Maski sei fó rendimentu ba governu no kompañia transnasional sira, atividade operasaun ne’e dala barak hamosu destruisaun ambientál, kria problema hanesan eviksaun; poluisaun rai, bee no atmosfera; violasaun direitus umanus; konflitu; funu no harahun buat barak ba ema hirak ne’ebé hela besik ka iha area atividade operasaun minerais.

Iha Novembru 2008, Sekretáriu Estadu Rekursu Naturais estabelese
Asosiasaun Lia Na’in ne’ebé simbolikamente fó direitu esplorasaun
mineira nian ba Primeiru Ministru Xanana Gusmão.
Esperiénsia hatudu katak regulasaun ne’ebé efetivu sai esensiál (maski dala barak la sufisiente), atu redús devastasaun no proteje povu nia direitu. Haree ba realidade katak atividade minerais la'os sustentavel (ho gastu rikusoin minerais naun renovavel hodi hetan osan), ne’e sempre iha dezafiu boot atu minimiza impaktu negativu. Ami espera katak konsultasaun públiku ne’ebé efetivu - no mós ho boa vontade hosi governu no Parlamentu hodi rona - sei ajuda implementa lei ne’ebé sei proteje ita nia povu nia interese ba tempu badak no mós tempu naruk.

La’o Hamutuk halo scan ezbosu lei ne’ebé inklui artigu 178 iha ezbosu Kódigu Mineiru, ne’ebé ita bele download iha Ingles hanesan PDF ka dokumentu Word. MPRM mós fasilita versaun Tetun no Portugés.

Ministériu Petróleu no Rekursu Minerais seidauk husu atu hakerek submisaun, maibé ami espera katak sira sei konsidera hanoin balu hosi ema matenek na’in sira, espesialmente ba ema ne’ebé iha esperiénsia ba operasaun mineira nian. Labele ignora atividade operasaun ne’e tanba nia risku boot liu hanesan lisaun ne’ebé hatudu iha nasaun hotu. La’o Hamutuk husu komentáriu no sujestaun atu aumenta ami nia submisaun ne’ebé ami sei hakerek (favor bele haruka ba laohamutuk@gmail.com), no ami enkoraja ba públiku no organizasaun sira atu haruka sira nia komentáriu ba Ministru Alfredo Pires. La’o Hamutuk kontente atu publika iha ami nia pájina web kualkér submisaun ka análize ne’ebé ita boot sira fahe ba ami.

08 September 2013

Draft Mining Law consultation starts

Lee blog ida ne'e iha Tetum.

Update, June 2014: MPRM told La'o Hamutuk that they have changed their plans, and there will NOT be any public consultation on this law in Dili. They expect to send it to the Council of Ministers soon.

Timor-Leste's Ministry of Petroleum and Mineral Resources (MPRM) has been talking with people around the country about a proposed law and code to license and regulate mining operations in the country.  The first consultation was in Oecusse on 26 August, and another will take place in Suai on 25 September. La'o Hamutuk is circulating the draft law through this posting, and we encourage people to study it and offer suggestions.

Mining operations create problems for people all over the world. Although they may provide income for governments and transnational companies, they often result in environmental destruction; displacement; pollution of land, air and water; human rights violations; conflict; war and other devastating consequences for people living near or downstream from the mines.

Experience shows that effective regulation is essential (although not always sufficient) to reduce damage and protect people's rights. Given the intrinsic non-sustainability of mining activities (which use up non-renewable mineral resources in order to provide cash), it is always challenging to minimize their negative impacts. We hope that effective public consultation -- together with the willingness of the Government and Parliament to listen -- can help Timor-Leste enact legislation which will protect our people's short- and long-term interests.

In November 2008, the State Secretariat for Natural Resources created an
association of Timor-Leste's traditional leaders (lia nain) who symbolically
handed over the right to explore for minerals to Prime Minister Xanana Gusmao.
La'o Hamutuk scanned the English translation of the draft law and associated 178-article draft Mining Code, which you can download as a PDF or Word file. MPRM has also provided Portuguese and Tetum versions.

MPRM has not yet asked for written submissions, and we hope that they will consider input from knowledgeable people, especially those who have experience with mining operations.  The risks are too high to ignore lessons already learned all over the world. La'o Hamutuk welcomes comments and suggestions to improve the submission we will write (please send them to laohamutuk@gmail.com), and we encourage people and organizations to send their own comments to Minister Alfredo Pires. La'o Hamutuk is happy to web-publish any submissions and analyses which are shared with us.

07 September 2013

LH Bulletin highlights land rights, food sovereignty

After a lapse of several years, the La'o Hamutuk Bulletin has resumed publication.  The July 2013 issue includes:
  • Whom Will the Land Laws Empower?
  •      Land Law glossary
  •      New books on land consultation
  • Food Sovereignty and Food Security
  •      Seed Policy glossary
  •      La'o Hamutuk Submission on Seed Policy 
  • Editorial: Together We Can End Impunity
Paper copies of the Bulletin are available in English or Tetum from La'o Hamutuk's office in Bebora, Dili. The Bulletin can also be read online in English or Tetum or downloaded as PDF in English or Tetum.

Click here for links to all previous Bulletins and a list of the articles they contain.

19 July 2013

How long will the Petroleum Fund carry Timor-Leste?

June 2014: The paper this describes is online in English and Tetum.
This article was updated on 25 July 2013.
For further updates, or to read an October 2013 version as a paper, see our web page on this subject.


This blog summarizes a paper we presented at the Timor-Leste Studies Association on 15 July. Download the presentation (which has many more graphics) as PowerPoint (6 MB) or PDF (2MB).  You can also download the underlying Excel spreadsheet to verify the model or explore what happens with other assumptions.

Historical case, if current trends continue
Oil and gas currently provide 95% of Timor-Leste's state revenues and 80% of GDP. Income from exporting nonrenewable petroleum wealth is channeled through a Petroleum Fund which contains US$13 billion. Many believe that the Fund’s balance and investments will continue to pay for state activities after the oil and gas fields are exhausted, which could be by 2025 if the Greater Sunrise project remains stalled. Unfortunately, the Petroleum Fund may be empty by then.

La’o Hamutuk has developed a spreadsheet model to predict approximately how long the Petroleum Fund can finance state activities. The model incorporates historical and projected data, showing the effects of external factors (like oil prices and interest rates) and policy decisions (such as tax and spending levels, borrowing, capital investment). We hope that it will support prudent, evidence-based planning and decision-making.

In each graph, the gray box at left summarizes the assumptions, while the green box at right summarizes the outcomes. The vertical scale is in millions of U.S. dollars (up to $20 billion), while the horizontal axis shows years from 2008 to 2040. The background turns red when Timor-Leste's desired spending exceeds our income and we can no longer pay for planned state activities. Click on any graphic to see it larger.

How long will the Petroleum Fund carry Timor-Leste?

Reference case, more optimistic than recent history
  • With historic trends and current policies, until 2024, with 96% austerity after 2026. This is the case shown above at left.
  • If we’re lucky and smarter, until 2027, with 67% austerity after 2029. This more optimistic scenario, shown at right, is our Reference Case.
  • With a lot of luck and skill, until 2036, with 56% austerity.
  • With hopes and dreams, until 2037.
  • If we’re lucky, strategic, prudent and wise, until our non-oil economy can replace it. This will require a change of direction from current policies.
What can we do to prevent Timor-Leste from going
broke before these girls finish secondary school?

Petroleum Dependency

2013 State Budget     $1,648 million
        $787 million (48%) will come from the Petroleum Fund in 2013.
        $680 million (40%) more is from the PF in the past and future.
Non-oil GDP in 2011          $1,046 million
Petroleum GDP in 2011    $3,463 million (81% of total)
South Sudan is the only country more dependent on oil and gas exports than Timor-Leste.
  • State activities, paid for with oil money, are about half of our “non-oil” economy, because some of this money circulates in the local economy.  
  • Our GDP only grows because of increasing state expenditure.
  • Balance of trade (2012): $670m imports, $31m exports.
  • Half of Timor-Leste's 2013 State Budget is to build physical infrastructure, but spending on health and education is less than international norms.
  • The Budget goes up much faster than inflation, faster than the GDP and faster than almost every other nation.

Sustainable budgeting is not a new idea in Timor-Leste

State income for the Reference Case

This model

  • Estimates future state revenues and expenditures based on current trends, external factors and future decisions.
  • Provides approximate, incremental and relative results, not precise predictions.
  • Is open source – we welcome discussion and improvement.
  • Takes an engineering approach, based on history, explicit assumptions and causality. It dos not include economic predictions -- GDP, inflation, poverty or trade balance -- or use dubious correlations.

Outputs from the model

  • Balance remaining in Petroleum Fund
  • Spending and revenues year-by-year
  • Severity of budget cuts if desired expenditures cannot be paid for
  • Balance owed from borrowing
  • Other outputs, not shown in the graphs:




  • Estimated Sustainable Income from Petroleum Fund
  • Breakdown of spending: recurrent (salaries, transfers, goods & services, operation & maintenance), debt service, minor and development capital
  • Breakdown of income: Electricity ratepayers, loans, domestic taxes, oil revenues, Petroleum Fund return
State expenditures for the Reference Case

Assumptions and inputs which can be modified

  • Global inflation, TL population growth, budgetary inter-relationships
  • Oil prices: Brent or WTI; EIA high/low/reference price cases; gas/oil price differential
  • Petroleum production: recoverable amounts from Bayu-Undan and Sunrise
  • Greater Sunrise development: when and if it is developed, where the LNG Plant is, and how revenues are shared with Australia
  • Return on Petroleum Fund investments
  • Domestic revenues, including recovery of fuel costs for generating electricity
  • Recurrent expenditure, including maintenance of capital investment
  • Capital expenditure:  Port, airport and Tasi Mane projects components: inclusion and costs
  • Loans: existing, planned and possible for projects and deficit, including amounts, interest and repayment periods
  • Ministry of Finance “Yellow Road” and other sustainable scenarios from the MoF and elsewhere

The PowerPoint includes examples of comparisons with the Reference Case

La'o Hamutuk suggests a more achievable path than the "Yellow
Road" suggested by the Ministry of Finance, which might allow
enough time to develop Timor-Leste's non-oil economy in a
sustainable way. It will require significant policy changes.
  • Without Greater Sunrise
  • With higher B-U prices and production
  • Higher Petroleum Fund return (8%)
  • Lower Petroleum Fund return (4%)
  • Recover 80% of EDTL fuel costs
  • Cancel Tasi Mane project (Suai Supply Base & highway)
  • Full Tasi Mane project (including refinery but not LNG plant)
  • Finance full Tasi Mane project with loans
  • Increase revenue growth (from 10% to 13%)
  • Reduce spending growth (from 15% to 12%)
  • MoF “Yellow Road” - impossible
  • LH Yellow Road: ESI + domestic revenues + capital + maintenance

Further analysis

La'o Hamutuk will continue to refine this model, with deeper analysis and incorporating new information and ideas. Possible enhancements include:
  • Other capital investment decisions and projects
  • More refined recurrent spending projections, including pensions
  • Possible future oil and gas discoveries
  • Links between human & physical investment and revenue growth
  • Baby boom population dynamics
  • Impact of local inflation

26 June 2013

TL Donors Conference materials online

Last week, Timor-Leste hosted the annual Development Partners Meeting, which included presentations by La'o Hamutuk (also Tetum)  and many others.  With the help of several participants, we have assembled more than 50 of the speeches, presentations, documents and other materials, in English, Tetum and Portuguese.  These include presentations by Government officials, donors, the UN, the private sector, civil society and guests.  You can access them by clicking here. 

Semana kotuk, Governu Timor-Leste organiza enkontru anuál ho parseiru dezenvolvimentu sira, inklui aprezentasaun husi La’o Hamutuk (mós Ingles) no ema seluk barak. Ho asisténsia husi partisipante balun, ami koleta liu 50 diskursu, aprezentasaun, dokumentu no matéria seluk iha Tetum, Ingles no Portugés. Sira ne’e inklui aprezentasaun husi ofisiál sira estadu nian, doadór sira, ONU, setór privadu, sosiedade sivíl no bainaka seluk. Ita boot bele asesu sira hotu ba kliik iha ne’e.

22 June 2013

Gov. & parseiru sira tenke dezenvolve ekonomia ho sériu

Durante loron 19-20 Juñu 2013, Ministériu Finansas Timor-Leste nian sai na’in ba Reuniaun Anuál ho Parseirus Dezenvolvimentu Timor-Leste nian (TLDPM) iha Dili. Fongtil husu La'o Hamutuk atu fó aprezentasaun kona ba Dezenvolvimentu Ekonómiku, no ami halo blog ida ne'e husi aprezentasaun ida ne'e. Ita bele hetan aprezentasaun no dokumentu sira iha Tetum no Ingles husi ami nia pájina web kona-ba TLDPM 2013. PowerPoint husi aprezentasaun ida ne'e (mós Ingles).

Deklarasaun Sosiedade Sivíl
ba Enkontru Timor-Leste ho Parseiru Dezenvolvimentu iha 2013
Setór Ekonómiku

Dezenvolve husi La'o Hamutuk, World Vision Timor-Leste, Kolping Nasionál Timor-Leste, Luta Hamutuk, Juventude ba Progresu no Lezival.

Timor-Leste presiza dezenvolve ekonomia ida ne’ebé ekuitavel no sustentável.

Ba da uluk, ami apresia tebes ba Governu Timor-Leste no Parseiru Dezenvolvimentu sira ne’ebé hadi’ak sira nia kooperasaun ho Sosiedade Sivíl, inklui apresia Yellow Road Workshop foin lalais ne’ebé hala’o ona husi Governu konvida ami atu diskute kona-ba dezenvolvimentu.

Ami fiar katak Governu no Parseiru Dezenvolvimentu hatudu ona sira nia jenuínu atu dezenvolve rai ida ne’e, no ami espera katak dezenvolvimentu sira ne’e sei hamenus dezafiu ne’ebé Timor-Leste hasoru, hanesan falta rekursu umanus, dependénsia ba petróleu, dependénsia maka’as ba importasaun, ignora dezenvolvimentu setór naun petróleu, no mós kualidade despeza estadu nian ne’ebé sei fraku. Tanba ne’e, ami sujere ba Governu no Parseiru Dezenvolvimentu sira atu rona hanoin sira husi ema barak no instituisaun sira seluk hodi muda polítika ba dezenvolve ekonomia ne’ebé ekuitavel no sustentável. Katak garante povu hotu iha direitu hanesan atu hetan distribuisaun rikusoin liu husi asesu ba setór edukasaun, saúde, bee mós no agrikultura. Ekonomia wainhira sustentável iha ne’ebé bele dezenvolve mós iha futuru la’ós iha tinan balu nia laran de’it.

Timor-Leste moris tiha ona iha “malisan rekursu” nia laran, no ami fiar katak parseiru dezenvolvimentu sira iha knar importante atu ajuda ami nia Governu hodi lori nasaun ne’e sai hosi malisan ida ne’e. Ami sempre fiar katak úniku dalan ne’ebé Timor-Leste tenke foti mak dezenvolve “Konseitu Dezenvolvimentu Ekonomia ida ne’ebé mak Ekuitavel no Sustentável”.

Planu Estratéjiku Dezenvolvimentu presiza halo revizaun.

Ami apresia ba objetivu PEDN nian atu halakon pobreza no lori povu ba moris di’ak. Tinan rua ona Timor-Leste hahú atu implementa PEDN ne’e, no ita aprende ona buat balu husi esperiénsia, prosesu no mós ho informasaun foun ne’ebé iha. Ami fiar katak, ohin mak oportunidade di’ak ba ita atu halo revizaun no muda ita nia estratéjia hodi atinje objetivu PEDN.

Durante tinan rua ne’e, despeza estadu nian barak liu ba setór infrastrutura fíziku liu-liu iha Projetu Tasi Mane no Eletrisidade. Ita ignora tiha atu dezenvolve infrastrutura umanu, edukasaun, saúde, agrikultura no peska, bee moos, indústria ki’ik no eko-turismu-setor ida ne’ebé bele hadi’a povu maioria ninia moris.

Tanba ne’e, ami sujere atu ita muda diresaun hodi prioritiza setór servisu sosiál nian ba futuru. Bainhira ita la hahú muda diresaun ida ne’e ohin loron, ita sei laiha tan rekursu atu dezenvolve setór sira ne’e, bainhira ita nia riku-soin petróleu no gas ne’ebé limitadu ne’e mamuk tiha ona iha dékada oin mai.

Ita tenke hasees-an hosi dependénsia petróleu ba dezenvolvimentu ne’ebé mak sustentável.

Timor-Leste nudár nasaun segundu iha mundu mak nia ekonomia depende liu ba esportasaun petróleu no gas. Osan barak ne’ebé suli hosi rekursu naun renovavel ida ne’e halo ita ignora tiha dezenvolve setór potensiál seluk ne’ebé bele substitui petróleu bainhira ita nia rekursu petróleu maran tiha ona bele sustenta ita hafoin mina hotu.

Agrikultura mak setór ida ne’ebé importante ba futuru Timor-Leste, atu sustenta no fornese meius subsistensia ba ita nia povu maioria. Infelizmente setór ida ne’e la hetan prioridade hosi Governu, ne’ebé hetan de’it 2% hosi Orsamentu Estadu tinan ida ne’e.

Konta Nasionál 2000-2011 ne’ebé foin lalais ne’e publika hosi Diresaun Jerál Estatístika (DJE) nian foka sai katak husi total ita nia Gross Domestic product (GDP) iha 2011 iha biliaun $5.8, no 81% ne’e mai hosi ekstrasaun petróleu no gas. “GDP naun petrolíferu” maizumenus biliaun $1.1 de’it.  Maske nune’e, metade hosi GDP naun petróleu ida ne’e mai hosi despeza estadu rasik ne’ebé besik 94% mai hosi rendimentu petrolíferu.

Ita nia dependénsia ba importasaun aumenta beibeik. Durante 2011, Timor-Leste esporta tokon $34 iha bens (esklui mina-rai) no tokon $77 ba iha servisu, no importa tokon $325 iha bens no tokon $1,033 ba servisu (la inklui setór petróleu).  Tinan 2012, importasaun sasán aumenta dala rua: tokon $670 ba sasán tomak hanesan ekipamentu eletrisidade, kombustivel, veíkulu, besi, foos, bebidas no simentu. No ita nia esportasaun tokon $31 de’it, ne’ebé maioria mai hosi kafé. Ohin deficit merkadoria hirak ne’e ita bele taka ho osan hosi reseita petróleu. Maibé bainhira ita la dezenvolve setór ekonomia naun-petróleu nian no redús importasaun ohin, ita sei la iha osan atu importa ka fó asisténsia sosiál bainhira ita nia rezerva mina-rai no gas maran.  [Fonte: RDTL DGE Quarterly Statistical Indicators (4q2012) no 2011 External Trade Statistics.]

Tanba ne’e, ami husu ba ita nia Parseiru Dezenvolvimentu sira bele ajuda Governu hodi suporta agrikultór sira atu aumenta sira nia produsaun, aumenta sira nia matenek no ajuda sira ho teknolojia sira ne’ebé sustentável no apropriadu ba sira nia moris. Maske nune’e, ami hein katak ajuda sira ne’e la’ós atu importa tan fini, adubu kímiku no sosa tratór ne’ebé la sustentável no sei estraga meiu-ambiente. Basa, ami fiar katak uza teknolojia sira ne’ebé la sustentável sei estraga prinsipiu no valor sósiu kulturál.

Kreximentu ekonomia “rua digitu” la’o ho inflasaun, la benefisia ema barak.

Beibeik no dala barak ona Governu liu hosi komunikadu, palestra no dokumentu ofisiál hateten katak, Timor-Leste iha kreximentu ekonomia non-oil GDP “rua digitu.” Ami triste tanba kreximentu ekonomia ida ne’e akompaña ho nivel inflasaun ida ne’ebé “rua digitu” mós, no aumenta pobreza no hamlaha maske nasaun ida ne’e gasta ona osan dolar biliaun ba biliaun.

Inflasaun hanehan maka’as ema kiak, hamenus kapasidade atu sosa sasán, no sei aumenta pobreza ba sira ne’ebé hela iha area rural no mós sira ne’ebé laiha servisu. Ita nia inflasaun ida ne’e akontese tanba ita la konsege kria ekonomia produtivu ida ne’ebé forte iha rai laran atu bele absorve despeza estadu nian ne’ebé sa’e maka’as tinan-tinan.

Aleinde ne’e, distribuisaun rekursu ekonomia tomak la justu ba povu sira, liu-liu sira ne’ebé hela iha area rural. Maski ekonomia maiór parte husi esporta mina no gas, ne’ebé pertense ba povu tomak, so grupu ki’ik oan ida husi klase aas mak hetan benefísiu boot. 10% ema sira ne’ebé riku liu hetan rendimentu dala 14 kompara ho rendimentu ne’ebé kiak liu 10%, maski agrikultura subsistensia no barter inklui ona. Medida rendimentu perkapita kada fulan nian iha tokon $40 no ki’ik liu mak tokon $24 iha Oecusse. Ida ne’e hatudu katak metade hosi populasaun Timor-Leste ne’e nia rendimentu menus $1.33 ba kada ema ba kada loron. [Fonte: RDTL DGE Household Income and Expenditure Survey 2011.]

Ita hotu tenke servisu hamutuk atu enfrenta dezafiu atu muda situasaun sira ne’e ba dalan ida ne’ebé sustentável liu. Mudansa sistema ekonomia, dezenvolve setór naun petróleu, liu-liu agrikultura no peska atu ita bele fornese ai han ba ita nia an rasik. Barak ko’alia kona ba “ekonomia inklusivu,” maibé fó benefísiu ba ema uitoan de’it, ita tenke koko hamutuk atu atinje justisa ekonómiku, ne’ebé ema hotu hetan no simu nia parte justu.

Ita tenke iha esforsu atu atinje soberania ai han, no valorija ita nia kolleita no prodús sasán ba nesesidade bázika hodi substitui sasán maioria mak ita importa hela. Indústria ki’ik no prosesamentu agríkola no peska ba konsumu lokál bele hadi’ak balansu komérsiu no fó servisu, no mós sei ajuda ita atu ekonomikamente no mós polítikamente sai independente duni. Iha tempu ne’ebé hanesan, turizmu no fatin ba merkadu esportasaun bele aumenta vizita estranjeiru.

Ami husu ba Parseiru Dezenvolvimentu Timor Leste atu ajuda ami atu prodús ba ami nia merkadu doméstiku hanesan“value added” ba povu Timor-Leste rasik, duke luta atu kompete hasoru agrikultura indústria sira husi nasaun seluk.

Governu tenke kontinua hamenus ninia gastu total.

Ba tinan ida ne’e, ami apresia tebes ba esforsu Governu hodi redús nivel kreximentu orsamentu estadu nian. Ami hanoin mudansa ida ne’e tenke kontinua no mós akompaña ho dezeñu orsamentu ida ne’ebé realistiku liu ba despeza infrastrutura nian, basa, partikulármente ida ne’e sei ajuda orsamentu tuir liña realidade nian.

Redús nivel kreximentu orsamentál ida ne’e iha tinan ne’e hatún osan ne’ebé atu foti hosi Fundu Petrolíferu hodi la’o tuir nivel Rendimentu Sustentável Estimadu, Governu foti biliaun $0.8 hosi Fundu Petrolíferu kompara ho 2012 ne’ebé foti biliaun $1.5. Ami hein atu disiplina Governu nian ida ne’e tenke la’o iha tinan sira oin mai, atu nune’e bele garante iha fiskál sustentabilidade ekonomia ba jerasaun sira ohin loron no mós ba jerasaun sira ne’ebé sei mai. Maske, nune’e ita hatene katak bele iha redusaun iha 2013 tanba tinan kotuk ita hasai barak liu duke ita presiza; 41% orsamentu 2013 finansia ho osan mak foti husi Fundu Petrolíferu durante 2012, no 48% seluk sei selu husi osan foun ne’ebé foti husi Fundu Petrolíferu.

Despeza rekorente iha OJE 2013, 21% as liu kompara ho gastu OJE 2012, eskala neineik liu duke 37% sa'e husi 2011 ba 2012, maibé kreximentu ida ne’e nafatin la sustentável. Ema barak ladún fiar katak Timor-Leste nia situasaun ekonomia iha hela perigu nia laran tanba ita iha biliaun $14 ne’ebé rai hela iha Fundu Petrolíferu.

Ita besik laiha ekonomia doméstiku ida ne’ebé produtivu atu bele absorve osan sira ne’ebé fakar sai ne’e. Agrikultura ne’ebé akumula 80% populasaun tenke sai nudár baze ba kriasaun ekonomia doméstiku. Maibé OGE 2013 sei gasta $144 ba iha Projetu Tasi Mane, maski nune’e sei gastu osan biliaun 10 ka liu se wainhira atu halo hotu. Despeza ba Projetu Tasi Mane tinan ida ne'e inklui Baze Fornesimentu iha Suai, Aeroporto Suai, no Auto-estrada Suai-Beacu.

Ami duvida tebes katak Projetu Tasi Mane sei lori benefisiu ba povu maioria, tanba gastu publiku ba projetu ne’e barak liu duke atu hetan retornu. Ne’e sei fornese númeru servisu uitoan de’it, no ita fó subsídiu boot liu ba kompañia sira husi rai li’ur. Agrikultór sei lakon rai ba prodús ai-han no dependénsia ba importasaun sai boot liu, no mós pobreza sei sai maka’as liu bainhira osan mina hotu ona. Ami hein katak Parseiru Dezenvolvimentu, bele ajuda Governu no sosiedade sivíl, hatudu analiza realistiku ba kustu, benefísiu no viabilidade husi Projetu Tasi Mane antes kontratu obrigatóriu Timor-Leste atu selu atus tokon dolar balun ba konstrusaun, ne’ebé sei bele akontese iha fulan balu.

Aleinde ne’e Projetu Tasi Mane, ohin loron Governu hakarak gastu osan barak tan ba aeroportu Dili, Zona Ekonómiku Esklusivu Oecusse, Portu Tibar, ponte rua Comoro, ne’ebé ita sei duvida hela mós nia benefísiu. International Financial Corporation (IFC) ajuda dezeña portu no aeroportu, bazeia ba asumsaun la realistiku enormemente aumenta importasaun no viajen aereas. Ami preokupa bainhira Parseiru Dezenvolvimentu sira nia “ajudu” ne’e atu halo aat liu malisan rekursu ba Timor-Leste, aloka parsela bot husi rekursu públiku atu benefisia ba ita nia povu minoria de’it.

Tanba ne’e, ami husu ba Parseiru Dezenvolvimentu sira atu bele ko’alia onestu ba ami nia Governu, hodi ajuda desizor polítiku atu kompriende katak mega projetu ne’e la realistiku ameasa justisa ekonómiku no futuru Timor-oan tomak nian. Ajuda ami investe iha rekursu umanu, jestaun di’ak ba polítika fiskál no orienta ba dezenvolvimentu ekuitavel no sustentável. Timor-Leste presiza imi tau prioridade ba programa sira hodi ajuda ami nia povu kiak no vulneravel sira, nafatin fornece ba sira no sira nia gerasaun.

Governu kontinua taka matan ba dezenvolvimentu umanu.

Ohin loron, ema barak mak preokupa kona-ba kualidade rekursu umanus Timor-oan sira nian. Labarik sira la estuda iha eskola, futuru labarik sira permanentemente limitadu- falta nutrisaun ai-han, tuir loloos ema seidauk bele mate maibe tanba sistema saúde labele ajuda sira nia moris. Oinsá ita bele alkansa direitu umanus, ne’ebé Timor-Leste ho kometimentu ratifika Akordu Internasionál kona ba Direitu Ekonómiku, Sosiál, no Kulturál, iha tinan sanulu kotuk?

Problema sira ne’e sei bele redús bainhira iha investimentu ida ne’ebé sériu ba setór servisu sosiál ida ne’e. Maske iha OJE 2013 ne’e hadi’ak liu uitoan iha saúde hanesan atu sosa ekipamentu médiku nian ne’ebé importante, maibé OJE ne’e nafatin aloka de’it 4.2%, menus metade kompara ho norma global.

Setór edukasaun mós nafatin ladún hetan atensaun OJE 2013 aloka de’it 8.4%, maske iha aumenta osan uitoan kompara ho tinan 2012 7.0%. Nasaun sub-dezenvolvidu sira ne’ebé valorija sira nia povu gasta maizumenus 20% hosi sira orsamentu estadu nian ba edukasaun. Nasaun sira iha progresu atinje MDG tanba sira gastu 28% husi gastu estadu ba iha edukasaun no saúde.

Daudauk ne’e, Governu halo hela prosesu konsultasaun atu identifika oinsá Timor-Leste bele atinje Objetivu Dezenvolvimentu Miléniu nian iha setór sira hanesan edukasaun no saúde. Atu atinje padraun sira ne’e, Governu no Parseiru Dezenvolvimentu sira tenke sériu atu investe maka’as no prioritiza setór sira ne’e, atu hadi’ak kualidade servisu no povu bele asesu. Ami fiar katak hadi’ak kualidade povu nia moris no rekursu umanu sai hanesan aliserse fundamental ba nasaun Timor-Leste ninia dezenvolvimentu.

Setór privadu presiza investe futuru nasaun nian.

Timor-Leste presiza duni iha setór privadu ida ne’ebé forte atu bele ajuda dezenvolve nasaun Timor-Leste. Ita nia empreza la-bele depende osan husi estadu nafatin.

Durante ne’e, setór privadu sira iha Timor-Leste haluha atu investe ba setór sira ne’ebé bele fornese kampu traballu ba nia ema sira. Hosi forsa laboral na’in 600,000 iha Timor-Leste ne’e, 70% depende ba setór agrikultór, servisu informal, no menus husi 10% mak servisu iha empreza privadu inklui kontraktor Governu nian. Setór privadu tenke fó prioridade ba agrikultura, ne’ebé bele hamenus kiak no dezenvolve ekonomia.

Ema na’in 58,200 mak servisu iha setór privadu, hosi sira ne’e 75% traballadór sira ne’e mesak mane. Hosi ne’e, ema na’in 18,000 servisu iha empreza konstrusaun. Kompañia na’in sira foti maioria barak liu husi lukru ne’ebé sira hetan, no investe fila fali oituan liu duke atu haboot sira nia empreza no mós Timor-Leste. Liu-liu kompañia ne’ebé baze iha Dili ki’ik liu- maski sira nia lukru sa’e 44%, husi 2010 too 2011 re-investe tun duni ba 38%, valor menus husi 9% husi lukru. Empreza distritu di’ak liu- sira investe husi metade lukru sira, boot liu kompara iha tinan 2010. Ita nia setór privadu tenke hanoin ba futuru sira nian, nune’e mósita nia nasaun nia futuru. [Fonte: RDTL DGE Business Activities Survey 2011.]

Alende, kontraktor lokál no internasionál presiza prodús servisu ho kualidade di’ak. Ita nia Governu no Parseiru Dezenvolvimentu bele servisu ho ita nia setór empreza atu dezenvolve ekuitavel no sustentabilidade Timor-Leste, ho kualidade projetu no kualidade moris, ba tempu naruk, ka lae?

Ohin loron, Timor-Leste iha benefisiáriu barak -- empresariu kontraktor, veteranu, funsionáriu públiku - ne’ebé moris husi rikusoin mina nian no mós generozidade parseiru dezenvolvimentu nian. Sosiedade tomak ita -- sosiedade sivíl, Estadu, setór privadu, parseiru dezenvolvimentu no kada sidadaun -- tenke fokus ba ita nia osan, ita nia rekursu, ita nia tempu no ita nia esforsu atu hadi’ak moris ba kada ema Timor-oan, inklui ita nia oan no bei-oan sira.

Se ita la servisu ho matenek liu maka’as liu ba hadi’ak futuru nian, se tan?

21 June 2013

RDTL and Donors: Take economic development seriously

On 19-20 June, Timor-Leste's Ministry of Finance hosted the annual Timor-Leste and Development Partners' Meeting in Dili. The NGO Forum asked La'o Hamutuk to give a presentation on Economic Development, from which this posting is derived. Presentations and documents in Tetum and English are on our web page on TLDPM 2013. PowerPoint of this presentation (also Tetum).

Civil Society presentation to the 2013 TLDPM on the Economic Sector
Developed by La'o Hamutuk, World Vision Timor-Leste, Kolping Nasionál Timor-Leste, Luta Hamutuk, Juventude ba Progresu and Lezival.

Timor-Leste must develop an equitable and sustainable economy.

First of all, we greatly appreciate that the Government and Development Partners have improved cooperation and communication with civil society, including the recent Yellow Road Workshop where the Government invited us to discuss Timor-Leste’s economic and social development.

We believe that the Government and Donors have demonstrated their commitment to develop this country, and we hope that this development will reduce the challenges confronting Timor-Leste, such inadequate human resources, reliance on petroleum, extreme import dependency, neglect of non-oil development and weak quality of expenditure. Therefore, we suggest that Government and Development Partners listen to ideas from many people and institutions, to shift their policies in order to achieve sustainable and equitable economic development. This will guarantee that everyone has the same rights to share in the nation’s resources, including access to education, health, clean water and farming. Our economy will be sustainable when it provides for the future, not only for a few years.

Timor-Leste is already “cursed” by our resources, and we believe that development partners have an important responsibility to help our Government exorcise this curse from our nation. We continue to believe that the only way Timor-Leste can do this is through an economic development concept which is equitable and sustainable.

We need to revise the Strategic Development Plan.

We appreciate the goal of the Strategic Development Plan to eliminate poverty and provide good lives for our people. In the two years since Timor-Leste began to implement this plan, we have gained experience and new information. We believe that today is a good opportunity to reflect on this knowledge, and to revise the SDP so that we can achieve its objectives.

During these two years, the bulk of state spending has gone for physical infrastructure, especially electricity and the Tasi Mane project. We have neglected to develop human resources, education, health, agriculture, fisheries, clean water, small industry and ecotourism – sectors which would improve nearly every Timorese person’s life.

Therefore, we suggest to move in a direction of prioritizing social services in the future. If we don’t start to shift direction today, we will not have enough resources to develop these sectors when our oil and gas reserves run dry, which could be in only a decade.

We need to escape from petroleum dependency and move toward sustainable development.

Timor-Leste more dependent on oil and gas exports than every nation but one. The temporary windfall from this nonrenewable resource makes us ignore other potential sectors which could sustain us after the petroleum is exhausted.

The agriculture sector is critical for Timor-Leste’s future, to sustain and provide livelihood for most of our people. Unfortunately, the Government does not prioritize this sector, which receives only 2% of this year’s State Budget.

81% of our $5.8 billion Gross Domestic product (GDP) in 2011 comes from extracting oil and gas. Even worse, about half of the $1.1 billion “non-oil GDP” was from state spending, of which 94% is fueled with oil revenues. [Source: RDTL General Directorate for Statistics 2011 National Accounts.  See highlights from this and other recent GDS reports.]

We are increasingly reliant on imports. In 2011, we exported $34 million in non-oil goods and $77 million in services that year, while importing $325 in goods and $1,033 million in services, not counting the petroleum sector. Last year, imports doubled -- $670 million worth of goods like electrical equipment, fuel, vehicles, steel articles, rice, beverages and cement, while exports were only $31 million, mostly coffee. Today we are able to close this trade deficit with oil revenues, but if we don’t develop our non-oil sector and reduce imports, we will have no money for imports or social assistance when the oil is gone. [Sources: RDTL GDS Quarterly Statistical Indicators (4q2012) and 2011 External Trade Statistics.]

Consequently, we ask our Development Partners to help our Government support farmers to improve their production, increase their skills and provide technology which is sustainable and appropriate to their lives. Therefore, are not asking help in importing seeds, chemical fertilizers or tractors, which are not sustainable and will damage the environment, as well as undermining our social and cultural values.

“Double-digit” economic growth comes with inflation, benefiting only a few people.

Nearly every week, Government speeches, press releases or documents boast of “double-digit” GDP growth. We regret that this growth comes with double-digit inflation, and increases poverty and hunger even while this nation spends dollars by the billions.

Inflation hits poor people hardest, reducing their buying capacity and increasing poverty among those in rural areas and those without work. We have inflation because we have not developed a strong, productive domestic economy which can absorb state spending, which increases rapidly every year.

In addition, our wealth is not shared fairly among our people, especially those in rural areas. Although the great majority of our economy is fueled by exporting petroleum wealth which belongs to all of our people, a small upper class gets most of the benefits. The richest 10% of our population receives 14 times as much income as the poorest 10%, even when subsistence farming and barter is included. Timor-Leste’s median monthly per capita income is $40 (in Oecusse it’s only $24). In other words, half of Timor-Leste’s people survive on $1.33 per person per day. [Source: RDTL GDS 2011 Household Income and Expenditure Survey.]

All of us must work together to meet the challenge of finding a more sustainable path. By transforming our economic system and developing the non-oil sector, especially agriculture and fishing, we will be able to provide food for ourselves. Many now talk about an “inclusive economy” –meaning that the poorest people get a few crumbs – but we should strive to achieve economic justice, where everyone gets a fair share.

We must try harder to achieve food sovereignty, to add value to our farming, producing basic needs to substitute for imports. Small industry and agricultural and fish processing for local consumption can reduce our trade deficit, provide jobs, and help become truly economically and politically independent. At the same time, tourism and places for selling local products can increase foreign visitors.

We ask Timor-Leste’s Development Partners to help us produce for our domestic market, adding value for Timor-Leste’s people, rather than struggling to compete with industrialized agriculture in other countries.

Government should continue to reduce state spending.

We appreciate the Government’s effort to reduce the growth of the 2013 state budget. We believe that this reduction should continue, and be accompanied by more realistic budget allocations for infrastructure spending, which will help bring the budget in line with reality.

This year’s budget reduces the money taken from the Petroleum Fund to the Estimated Sustainable Income of $0.8 billion, compared with $1.5 billion taken out in 2012. We hope that the Government’s discipline will continue, enabling fiscal sustainability for current and future generations. However, we also recognize that the reduction in 2013 is possible because last year we withdrew much more than we needed; 41% of the 2013 budget is financed with unspent money taken out of the Petroleum Fund in 2012, and another 48% will be paid for with new withdrawals from the Fund.

Recurrent expenditures in 2013 will be 21% higher than what was spent in 2012, which is a slower escalation than the 37% increase from 2011 to 2012, but is still unsustainable. Some people don’t think our economic situation is dangerous because we have nearly $14 billion in our Petroleum Fund, but that will not last very long.

We have almost no productive domestic economy to absorb the money flowing through government from our oil wealth. But the 2013 budget will spend $144 million on the Tasi Mane project, mostly for the Suai Supply Base, airport and highway. The entire Tasi Mane project, including the Betano oil refinery and Beacu LNG plant, could cost ten billion dollars or more if it is ever completed,

We seriously doubt that the Tasi Mane project will bring benefits to most of our people, because public spending for this project is far more than the return it can earn. It will provide few jobs for Timorese workers, but large subsidies to foreign contractors. Farmers will lose productive land and imports will grow, creating even more poverty when the oil is gone. We hope that Development Partners will help Government and civil society carry out a realistic analysis of the costs, benefits and feasibility of Tasi Mane before imminent construction contracts obligate Timor-Leste to pay hundreds of millions of dollars.

In addition to the Tasi Mane project, the Government is spending more money on Dili airport, the Oecusse Economic Zone, Tibar Port, two Comoro bridges, and other projects of dubious benefit. The IFC is helping with the port and airport, based on unrealistic assumptions of vastly increased imports and air travel. We worry when development partners’ “assistance” makes our resource curse more acute, allocating large shares of public resources to benefit a minority of our people.

Therefore, we ask the Development Partners to be honest with our Government, helping policy-makers understand that unrealistic mega-projects threaten economic justice and the future of all Timorese people. Help us invest in human resources, effective management, and fiscal policies oriented to sustainable, equitable development. Timor-Leste needs you to prioritize programs which help our poor and vulnerable people, enabling them to provide for themselves and their grandchildren.

The Government continues to close its eyes to human resource development.

Today, many people worry about the quality of Timorese human resources. Kids don’t learn in school; children’s futures are permanently limited for lack of nutritious food; people die unnecessarily because our health care system does not help them. How can we achieve these human rights, which Timor-Leste committed to ten years ago when we ratified the International Covenant on Economic, Social and Cultural Rights?

This problem can be reduced by serious investment in the social service sector. Although the 2013 State Budget is a little better on health, including important medical equipment purchases, it still allocates only 4.2% for health, less than half of global norms.

We still don’t allocate enough to education, only 8.4% in 2013, improved over last year’s 7.0%. Most developing countries place more value on their people, spending around 20% of their budgets on education.

At the moment, the Government is asking how Timor-Leste can achieve the Millennium Development Goals in sectors like education and health. To achieve these standards, Government and donors need to get serious, improving the quality of education and health and making them accessible to everyone. This will make people’s lives better, respecting their human rights. It will also enable them to earn and produce more, providing a basis for developing Timor-Leste’s national economy.

The private sector should invest in their own and the nation’s future.

Timor-Leste needs a strong private sector to help build this nation. Our businesses cannot continue to depend on money from the state.

At present, Timor-Leste’s private sector largely ignores areas which provide jobs for Timorese people. Around 70% of our 600,000-strong labor force works in the agriculture and informal sectors, while less than 10% work for private companies, including government contractors. The private sector should give higher priority to agriculture, which can reduce poverty and develop our economy.

Our non-oil private sector employs 58,200 workers, three-fourths of whom are men, and 18,000 of whom work in construction, the largest sector. Business owners took out almost all their profits, reinvesting very little to make their companies and Timor-Leste grow. Dili-based businesses were especially short sighted – although profits increased by 44% from 2010 to 2011, reinvestment actually dropped by 38%, amounting to less than 9% of profits. District businesses were better – investing more than half of their profits, a significant increase over 2010. [Source: RDTL GDS 2011 Business Activities Survey.]

In addition, local and international contractors need to produce better quality work. Can Government and Donors work with our business sector to build an equitable and sustainable Timor-Leste, with better quality of projects and quality of life, for the long term?

Today, Timor-Leste has many beneficiaries – contractors, veterans, public employees – living off our petroleum nonrenewable petroleum wealth and the generosity of development partners. All of us – civil society, the State, the private sector, development partners, and every citizen – must focus our money, our resources, our time and our efforts on improving the lives of every Timorese person, including our children and grandchildren.

If we don’t work smarter and harder for a better future, who will?