Regions and Countries

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Country Strategy and Program Update 2005-2006: Timor-Leste

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I. Country Strategy

1. The assistance of the Asian Development Bank (ADB) to Timor-Leste was first set out in Country Assistance Plan 2001–2003 East Timor.¹ This Plan was prepared in 2000 in close consultation with the United Nations Transitional Authority in East Timor (UNTAET). Given the emergency conditions of the time, the plan was indicative only and underwent frequent revisions. ADB activities in this period involved the administration of Trust Fund for East Timor² (TFET) projects and a number of ADB-funded technical assistance projects that, for the most part, supported the TFET projects.

2. In 2003, a country strategy and program update (CSPU) was prepared, which identified ADB’s objectives in Timor-Leste as the reduction of poverty and improving the quality of life of the people. The stated focus was on: (i) capacity-building support to selected ministries to help establish appropriate institutional, policy, and regulatory frameworks, (ii) job generation in local communities through microfinance and small enterprise development activities, and (iii) physical infrastructure development by the completion of the remaining TFET-financed projects. The program of activities was small and short term, covering only the period 2003–2004, and remained indicative, in response to the Government’s decision to develop detailed action plans at agency level to support the National Development Plan (NDP) 2002, before committing to a 3-year program of activities with ADB.

3. The Government’s NDP and associated Road Map focus on two development goals: (i) to reduce poverty and (ii) to promote equitable and sustainable economic growth. The Government’s immediate priorities are law and order; justice; the legitimization of local authorities; employment creation; and service delivery for poverty reduction in health, education, and agriculture. In the medium term, the Government will focus on infrastructure development, education and health, and economic recovery. The Government is committed to a market-based economy and emphasizes the importance of foreign investment to stimulate the economy. The Government’s current policy is to avoid borrowing, although it has announced that this policy is now under review.

4. It is proposed that ADB’s strategy focus on three main areas: capacity building for economic management, microfinance development, and infrastructure development.

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