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I. Country Performance Assessment
A. Economic Performance Assessment
B. Poverty Assessment
C. Assessment of Socio-Environmental Performance
>> D. Governance: Sound Development Management
II. Country Operational Strategy
III. Sector Strategies
IV. Regional Cooperation
V. Donor Activities and Aid Coordination
VI. Cofinancing and Catalyzing External Resources
VII. ADB’s Operational Program
VIII. Economic and Sector Work Program
Country Assistance Plans - East Timor : I. Country Performance Assessment

D. Governance: Sound Development Management

17. In January 1999, the Indonesian Government announced its intention to allow East Timorese people to vote for either autonomy within Indonesia, or independence. The ballot itself was conducted on 30 August 1999 under the auspices of the UN. More than 98 percent of East Timor's 450,000 registered voters participated in the popular consultation and 78.5 percent of these voted in favor of independence. On 25 October 1999, following the formal separation of East Timor from Indonesia, the UN Security Council resolution 1272 was unanimously passed, establishing the UN Transitional Administration for East Timor (UNTAET), initially until 31 January 2001.

18. In the intervening period, the severe outbreak of violence, destruction and displacement of people caused public administration in East Timor virtually to disappear, both in terms of systems infrastructure and personnel. Over 70 percent of administrative buildings were partially or completely destroyed, along with almost all office equipment and materials. Because the majority of senior civil servants were non-East Timorese, vital knowledge and skills have been lost. It will take time before essential public goods and services can adequately be provided. Even more importantly, there is a drastic shortage of skilled personnel for the secondary and tertiary levels, as most technical positions were occupied by non-East Timorese, who have now left the country.

19. During the transition period until democratic elections can be held, UNTAET is the government in East Timor, exercising all legislative and executive authority, including the administration of justice. UNTAET comprises three components: (i) military, to provide and maintain peace and security; (ii) governance, to establish an administration for civil and social services, including capacity for self-government and conditions for sustainable development; and (iii) humanitarian, to coordinate the delivery of humanitarian assistance. UNTAET has been charged with assisting the East Timorese to develop a Constitution, organizing and conducting elections, and building the institutional capacity for electoral processes. Initially, all key positions were held by expatriate officials but during 2000 East Timorese have progressively been brought into key positions in the Government and Cabinet.

20. A National Consultative Council (NCC) provides a mechanism for East Timorese participation in decision-making during the transition period. The NCC includes representatives from a cross-section of East Timorese society including all political parties, church groups and other non-government organizations. The NCC will make policy recommendations on significant executive and legislative matters, and will require substantial skilled advisory support for some time. In this regard, the NCC is in the process of creating joint sectoral committees composed of East Timorese and international experts, to analyze and advise on issues in agriculture, education, environment, finance and macroeconomics, health, human rights, infrastructure, local administration, and national resources. The responsibilities of these committees include promoting information sharing and coordinating donor-funded activities in each sector to avoid overlap and identify gaps in project funding.

21. A key objective during the transition period is to establish a small civil service that can be sustained in the long term, with a lean administrative structure. The previous civil service was estimated to comprise 28,000 people and was subsidized by the Indonesian government. The JAM estimated that East Timor could function effectively with a civil service of about 12,000 staff, of whom almost 10,000 would be teachers and health personnel. The effectiveness of this lean civil service would depend on merit recruitment, adequate compensation, and intensive staff training and development. Achievement of such a lean civil service will also involve a radical departure from the past, and is expected to have a significant social impact, at a time when most East Timorese have lost everything and employment and income generating opportunities are scarce. At the same time, steps have now been taken to establish representative, community-based institutions and to develop these into a system of local government.



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II. Country Operational Strategy