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Annual Report 2002 : Pacific

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Timor-Leste

Economic performance

Timor-Leste’s GDP in 2002 is estimated to have declined by about 1.0%–3.0%. The contraction, which had the greatest impact on the construction and services sectors, was primarily due to the decreased presence of the United Nations and the slower-than-expected implementation of bilateral projects and use of the budget. Agriculture sector production rose due to increased availability of rural capital and farm inputs. Following the reduced international presence, commercial activity declined in terms of exports and imports. The trade deficit was close to 45% of GDP in 2002, according to International Monetary Fund estimates. Major economic problems, such as a significant increase in unemployment, were concentrated in Dili.

ADB operations

Operational strategy: In May 2002, Timor-Leste became the world’s newest country; shortly thereafter, the Government introduced the National Development Plan (NDP). In July 2002, Timor-Leste joined ADB. An ADB country strategy, to be formulated in 2003, is expected to focus on helping the Government meet its NDP goals of reducing poverty and accelerating economic growth. For more on Timor-Leste, see the Special Theme chapter.

Policy dialogue: Several ADB technical assistance grants have included components for developing a regulatory and legislative framework and analyzing policy issues. High-level policy dialogue with the Government is expected to be part of a 2003 country programming mission.

Loans and technical assistance: No loans have been approved yet for Timor-Leste. In 2002, two advisory technical assistance totaling $1.3 million were approved (see tables 24 and 25 in the Statistical Annex).

Project implementation: Since the start of ADB operations in the country in 2000—before it became an ADB member in 2002—Timor-Leste has received 20 technical assistance totaling $8.6 million, of which 11 are substantially completed and 9 are ongoing.

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