Timor-Leste became the first new nation of this millennium on May 20, 2002 following a quarter century of occupation and conflict. The country experienced a fundamental social and economic upheaval after its people voted for independence from Indonesia in a referendum in August 1999. The bulk of the population was displaced in the weeks following the ballot results and most of the physical infrastructure was destroyed or rendered inoperable. Soon after the violence ceased, it began rebuilding itself with the support from UN agencies, the international donor community and NGOs.
On the eve of independence, the government presented its vision for the year 2020 and its strategy for achieving this vision in its National Developrnent Plan (NDP).
Timor-Leste's Vision for 2020:
Timor-Leste will be a democratic country with a vibrant traditional culture and a sustainable environment;
It will be a prosperous society with adequate food, shelter and clothing for all people;
Communities will live in safety, with no discrimination;
People will be literate, knowledgeable and skilled. They will be healthy, and live a long, productive life
They will actively participate in economic, social and political development, promoting social equality and national unity;
People will no longer be isolated, because there will be good roads, transport, electricity, and communications in the towns and villages, in all regions of the country;
Production and employment will increase in all sectors - agriculture, fisheries and forestry;
Living standards and services will improve for all East Timorese, and income will be fairly distributed;
Prices will be stable, and food supplies secure, based on sound management and sustainable utilization of natural resources;
The economy and finances of the state will be managed efficiently, transparently, and will be free from corruption; and
The state will be based on the rule of law. Government, private sector, civil society and community leaders will be fully responsible to those by whom they were chosen or elected.
Timor-Leste has made enormous progress in rehabilitating its economy, reconstructing its infrastructure, reintegrating its refugees and building the key elements of a sustainable political process in an environment of internal peace. But Timor-Leste still faces many challenges in building the nation. Limited human resources, embryonic institutions, a stagnant economy, widespread poverty on the one hand, and high expectations about tangible progress in people's livelihoods on the other hand, give rise to social and political tensions. It now faces many challenges of nation-building and of overcoming the deprivation affecting the lives of the poor.
This report, written in two volumes, lays out the challenge of poverty reduction in Timor-Leste. It is based on the first nationally-representative household survey collected during August to December 2001. The report's objectives are modest: to set a baseline for the new country on the extent, nature and dimensions of poverty; and to assist the decision making of the newly elected government and its efforts in formulating, implementing and monitoring its Poverty Reduction Strategy. The overall objective was not to lay out the elements of poverty strategy but rather to present evidence on the basis of which the Timorese can define and refine their own poverty reduction strategy.
The key challenge lies now in formulating a poverty monitoring plan that includes both quantitative and participatory elements, and lays out the institutional arrangement for data analysis and reporting to ensure that the collected data inform policy making and program design.