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

Dili, Timor-Leste, May 17-19, 2004

 

Your Excellency Mr. Prime Minister
Your Excellency Mr. Ambassador
Honored Ministers of the República Democrática de Timor-Leste
Distinguished Delegates
Members of the Press

The lively discussions we have had together over these two days reflect both the challenges facing Timor-Leste and your achievements, and I would like to take this opportunity to once again pay tribute to the resolve of the Timorese people.  We are proud to work with you and your development partners to help bring the fruits of peace and prosperity to each Timorese family.

As we have discussed in detail, the Government has made solid progress in implementing the National Development Plan.  We have noted key achievements in service delivery, including continuing improvement in health indicators. 

Government has improved the efficiency of its use of public resources, in part by implementing the measures discussed at our last meeting.  Prominently, revenue collection in the power sector has increased markedly. This constitutes tremendous progress in an area that has been a challenge since the early days of the transition period, and we congratulate you.

Timor-Leste has taken important steps to complete the governance architecture set out in the Constitution, and now faces the critical task of transforming this architecture into well functioning, adequately resourced, autonomous institutions, such as the Provedor dos Direitos Humanos e Justiça.   Now is also the time to address emerging problems of corruption and mismanagement, before they become entrenched. 

We note that Timor-Leste has just completed the first round of negotiations on the maritime boundaries with Australia, with the next round scheduled for September.  To safeguard Timor’s future, it is important that these negotiations conclude swiftly and fairly. 

We all welcomed the improved medium-term revenue projections that we discussed yesterday, but we remain mindful that tremendous upward and downward risks can affect oil and gas revenues. The possible volatility in revenues caused by these uncertainties could be very risky for a small, new nation like Timor-Leste. 

I would like to draw attention to the fact that 30 million dollars of the reduction in the projected medium-term financing gap comes from reduced expenditures by Government, and it could be useful to reflect on whether any of the projected reductions might be missed opportunities to contribute to Timor-Leste’s sustainable development.  

In line with the updated medium term fiscal framework, and cognizant of the tremendous uncertainties surrounding projected oil and gas revenues, the World Bank supports Government’s request that development partners extend their financing of the Transition Support Program to fiscal years 2006 and 2007 at levels similar to their current contributions.  

The Sector Investment Programs, or SIPs, that are being finalized now will allow Government to articulate a detailed and truly comprehensive medium-term expenditure framework, one that will provide clear guidance for future funding and programs by Government and donors alike.  This will focus attention on sectors that are underfinanced, such as sustainable road maintenance, and this is indeed a priority. Improved and well-maintained roads are essential to connect people with services, and goods with markets. 

I believe that we should recognize as a community of donors that we still face significant challenges with regards to building the capacity that Timor-Leste needs.  Our capacity building efforts need to be guided by a long-term vision elaborated for each sector, which identifies long-term needs, assesses skills availability and capacity gaps, and highlights the processes and systems that will channel improved skills.   In several key areas, this will most likely require the continued presence of medium- to long-term international assistance, combined with comprehensive training of Timorese teams and carefuly crafted succession plans.

 

Mr. Prime Minister, your progress has been impressive, and the remaining challenges are equally formidable.  The World Bank is dedicated to supporting the government and the people of Timor-Leste, and all your development partners, in striving for a world free of poverty.