By
Jemal-ud-din Kassum
Vice President
East Asia & Pacific Region, The World Bank

Dili, timor-Leste, May 17-19, 2004 

Your Excellency President Xanana Gusmao
Your Excellency Prime Minister Mari Alkatiri
Your Excellency President of Parliament Francisco “Lu-Olo” Guterres
Your Excellency Ambassador Kamalesh Sharma,
                Special Representative of the Secretary General
Honored Ministers of the República Democrática de Timor-Leste
Members of Parliament
Distinguished Delegates
Members of the Press

I am indeed privileged to join you again for this fourth meeting of Timor-Leste with its Development Partners, and I would like take this opportunity to congratulate you on the occasion of the second anniversary of the Restoration of Independence of Timor-Leste.

Please allow me to draw attention to some of the most notable achievements of the past six months, and the ongoing challenges facing the nation. 

Timor-Leste is making significant progress in enacting legislation to complete the governance architecture set out in the Constitution. The Government has engaged actively with development partners in discussions on governance in recent months, and we look forward to the implementation of further initiatives that contribute to the ongoing progress in building a transparent and accountable public sector.

Timor-Leste is at a critical juncture now.  Laws and organigrams must be transformed into adequately resourced, well-functioning governance institutions that can effectively provide the checks and balances provided for in the Constitution.  Timor-Leste also has a brief window of opportunity now, to address emerging problems of corruption and mismanagement before they become entrenched. 

With regards to improving the efficiency of public spending, Government has reached a breakthrough in cost recovery in the power sector.  It has implemented a range of measures that reduce overhead spending and improve value-for-money, and these are important achievements. Continued attention to public expenditure management is critical, especially the plans to assess constraints to smooth budget execution in the districts and identify solutions to problems that may be slowing service delivery.

Considerable concerns have arisen regarding road maintenance; this is an area that warrants increased attention over the next fiscal year, as an efficient road network provides crucial links for people to services and goods to markets.

We will discuss these topics, and many others, over the next two days – and we will also cover another important challenge – the mobilization and utilization of resources.

When we last met in this venue, technical problems in exploitation of the Timor Sea resources had resulted in a projected financing gap for the upcoming four years that was estimated at USD 126 million.  As we will hear later today, a number of positive developments have transpired since December.  As we discuss these details,  we are all reminded that oil and gas revenues are subject to tremendous uncertainties, and we all know that the possible volatility in revenues caused by these uncertainties could be very risky for a small, new nation like Timor-Leste. 

Finalization of the Sector Investment Programs, or SIPs, will allow Government to articulate a truly comprehensive Combined Sources Budget and Medium Term Expenditure Framework, aligned with the NDP.  A detailed and comprehensive medium-term framework would provide clear guidance for future funding and programs by Government and donors alike, and would contribute greatly to Government’s efforts to effectively manage revenue risks.

We look forward to an active discussion over the next two days to explore how the World Bank, and all your development partners, can support your efforts to manage those risks as you strive to reduce poverty and improve the lives of your people. 

Please allow me to close with a brief word of thanks to Ambassador Kamalesh Sharma, the outgoing Special Representative of the Secretary General.  He has been an important part of our collective efforts in these past two years, and we have valued his thoughtful leadership.  I know that everyone joins me in conveying our heartfelt best wishes for the future – he will always be known as a great friend of Timor-Leste. 

As we bid farewell to Ambassador Sharma, I also am reminded of another great friend of this country, Mr. Sergio Vieira de Mello, who served as SRSG during the challenging times of the Transitional Administration, and was taken from us all tragically less than one year ago.  As we move forward together in our continuing endeavor to improve the lives of all Timorese,  Sergio’s memory stays with us, and his optimistic voice echoes into the future.

Thank you.