[East Timor] UN: faces tough task of fighting poverty

From The Mail and Guardian

Asia's newest and poorest nation East Timor faces a tough task lifting itself out of poverty despite social and political gains and rich unexploited oil and gas reserves, a United Nations report said on Thursday.

The Path Out of Poverty report painted a bleak picture of conditions in the nation of one million people, where the economy has been shrinking and development indicators only slightly improving.

With per capita income at just $370 per year, the fledgling nation is the poorest in the region and its economy has eroded further as United Nations personnel and aid workers have left over the past two years, it said.

East Timor gained full independence in May 2002 after more than two years of UN stewardship preceded by almost 24 years of Indonesian rule. Peacekeeping missions remained here until last May.

The former Portuguese colony voted to break away from Indonesia in a UN-sponsored ballot in 1999, infuriating the Indonesian military and militias who murdered at least 1 400 East Timorese and destroyed almost 70% of all buildings here before leaving, according to the UN.

The country's indicators lag abysmally behind most other Asian nations, data cited in the United Nations Development Programme report showed.

Life expectancy in 2004 was 55,5 years compared to a 70,5% average for East Asia Pacific nations, half the population has no access to safe drinking water, and 90 children out of 1 000 die before they turn one, it said.

Data on income poverty has not been updated since 2001, when about 40% of people were estimated as living below the poverty line which was set at 55 US cents per day in East Timor, the report said.

"The situation is unlikely to have improved given the sluggish performance of the economy," it said.

Sustained economic growth was crucial for development, it noted, adding that for now, "growth of any kind is still proving elusive ... Timor-Leste urgently needs a clearly laid out strategy for pro-poor rural development."

Growth would have to start with agriculture, which employs around three-quarters of the labour force but contributes only one-fifth of gross domestic product, it said.

Annual investment to achieve annual economic growth of five to seven percent would need to be $48-million, it estimated, in order to meet a goal of reducing poverty by one third by 2015.

"Given the likely revenues from oil and gas, this is technically feasible and financially affordable, so it would be difficult to justify any plan that did not aim to achieve the poverty goal," the report said.

Despite the millions of dollars expected to flow from oil and gas in the coming years, the report noted that this income was still peppered with uncertainties and the government would "have limited possibilities unless requesting additional financial support" from donors.

"They have their vision of where they want to go, of the nation that they want to be," the report said of the East Timorese. "But realizing that vision will be a long and difficult task and many painful decisions lie ahead."

Prime Minister Mari Alkatiri, who acknowledged in the report the long road ahead, said in a statement that East Timor had embarked on "the right track", with some indicators such as maternal mortality improving.

"We must not deny these facts," he said.