East Timor: Development Challenges for the World's Newest Nation

East Timor: Development Challenges for the World's Newest Nation

East Timor: Development Challenges for the World's Newest Nation

East Timor: Development Challenges for the World's Newest Nation


As the world's newest independent nation, the challenges facing East Timor are particularly acute. Per capita income is roughly $300, making it one of the world's poorest nations. There also remains the possibility of difficult relations with its giant neighbor, Indonesia. This comprehensive volume is the first serious analysis of East Timor's economic prospects. It draws on local as well as international expertise, from both academics and policy makers. Issues covered include internationaleconomic relations, agriculture, finance and infrastructure, and political institutions.


Xanana Gusmao

Since the dreadful destruction of September 1999, East Timor has been undertaking the task of economic reconstruction under the guidance of the United Nations Transitional Administration in East Timor (UNTAET) and with the assistance of the multilateral and bilateral development agencies.

It is obvious that this process, which literally began from scratch, is a gigantic task for UNTAET and for the Timorese people. Amidst the difficulties — ranging from communication between international staff and East Timorese nationals to the slowness of the reconstruction process itself — have emerged some initiatives that will establish the basis for the democratic governance of our country. Other initiatives have also emerged to help us achieve quick economic recovery. These include the rehabilitation of essential infrastructure and the transportation network, the provision of basic health care, the re-opening of schools and, very importantly, the resumption of markets and economic activities.

But a lot more will need to be done to address four important economic and social problems we currently face: poverty, unemployment, inflation and illiteracy. The per capita income of East Timor was already very low, and sank still lower with the destruction of September 1999. Unemployment, mainly in Dili, is very high. Our country has had to cope with high inflation due to the shortages of goods and services and the high transport costs resulting from the remoteness of East Timor from the main international routes.

Looking to the future, one of the main goals of our development will be to create a fair society with an equitable distribution of income, in which those East Timorese with lower incomes have their basic needs for education, health care and public transport met. At the political level, we aim for stability through democratic and orderly elections, and for good governance, with no corruption and with transparency in the decision-making process. The National Council of Timorese Resistance/National Council (CNRT/CN) and UNTAET agreed on the . . .

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