Over the past decade, Timor-Leste has created the conditions for successful development. It has credibly emerged from a crisis of internal violence and political instability between 2006 and 2007 and has increased tangible services for the population, establishing hard-won political stability and a new confidence in the state. Largely peaceful democratic elections since 2012 reflect these achievements.
Timor-Leste has achieved tremendous progress since achieving independence in 2002 – drawing down money from the Petroleum Fund and channeling it through the budget to meet pressing needs. The impact is evident in the near-halving of infant and child mortality rates; significant gains in health and education; economic growth in line with regional neighbors; increased citizen participation, and; the gradual strengthening of state institutions.
Yet immense challenges remain. Ensuring Timor-Leste’s young people are educated, healthy, and productively employed are arguably the biggest development challenges facing Timor-Leste over the next decade. With 60% of the population under 25 years of age, Timor-Leste is one of the youngest countries in the world. Benefitting from high global oil prices, the country achieved lower middle-income status in 2011, yet poverty remains high, particularly in rural areas where the majority of the population lives.
To create job opportunities for youth, sustain inclusive growth, and prepare for a future of potentially-declining natural resource returns, Timor-Leste needs to diversify its economy and sources of revenue, elevate the quality of health and education services, and equip the population with viable skills. These efforts must be underpinned by capable institutions with a strong and consistent focus on quality of spending and policies that nurture private investment.
The World Development Report 2011 found that on average, post-conflict countries take between 15 and 30 years – a full generation – to transition out of fragility and to build resilience. It is against this backdrop that Timor-Leste’s social and economic development can be seen as remarkable.
The Timor-Leste government’s Strategic Development Plan for 2011 – 2030 offers a vision, targets and indicators for the next two decades. It is built around four pillars:
i. Social capital: health, education and social protection;
ii. Infrastructure: transport, telecommunication, power, and water supply and sanitation;
iii. Economic foundations: targeting three sectors for development – agriculture, tourism and petrochemicals – to bring about growth, jobs, and new sources of public revenues beyond oil; and
iv. Institutional framework: focusing on macroeconomic management and improving the capacity and effectiveness of government institutions.
Last Updated: Apr 10, 2017