DILI, 06 march 2023 (TATOLI)- Timor-Leste highlighted its effort to meet the criteria to graduate from LDC (Least developed countries) status.
This effort was highlighted by Timor-Leste Minister of Finance, Rui Agostu Gomes at the Least Development Country’s (LDCs) Conference Round Table 1 held in Doha Qatar march 3, 2023.
In his statement Gomes said, Investing in people is important to leave no one behind.
“For the second time, Timor-Leste appears to have met some of the criteria for passing LDC status. However, this does not tell the full story, over the past four years, we have experienced three recessions,” Rui Gomes said in a statement.
He said TL experienced negative economic growth in 2017 and 2018 due to prolonged political uncertainty which resulted in the state budget not being approved.
Economic growth has contracted even more in 2020 due to the Covid-19 pandemic. That year GDP fell 8.3%, while the poverty rate rose to 27%. Economic recovery in 2021 was hampered by Cyclone Seroja which resulted in damage to agriculture, infrastructure, and housing.
Timor-Leste experienced a small average growth rate of 3.1% between 2002 and 2021. However, this has been undermined by the combined impact of Covid-19, climate change, and political instability that, together, have forced the country to deviate for seven years.
“We also continue to rely heavily on imports dependent. This means that we are vulnerable to the global prices increasing caused by the Covid-19 pandemic and the war in Ukraine,” he said.
The inflation rate in 2021 and 2022 will be much higher than in the previous five years. Last year, inflation hit 7% and is expected to remain high for the next two years.
TL can report progress in several key areas. For example Malnutrition – where we have reduced stunting and wasting; Social Protection – where coverage for over 60 is that 100%, which is almost double the Asia-Pacific region average.
Gender Development – where TL has recorded an increase in the Gender Development Index, while in 2020, 40% of seats in the National Parliament are held by women.
However, TL still faces major socio-economic challenges that require large public spending commitments. Malnutrition, for example, is still far above the average for other countries in the region.
TL faces a large youth unemployment challenge, with 32% of 15-24-year-olds not attending any Employment Education or Training. Labor force participation remains low overall at 37% for men and only 24% for women.
These challenges must also be framed in the broader context of the need for economic diversification in the face of depleting petroleum resources. At 10% of GDP, non-oil revenues remain small. At the same time, current projections suggest that the country’s Petroleum Fund will be exhausted by 2034.
“Considering all these factors, further progress is essential for the country to successfully graduate from LDC status, in line with the goals of the Doha Program of Action,” he concluded.
Journalist: José Belarmino De Sá
Editor: Nelia Borges
