Environment and natural resources are particularly important for the development of East Timor. East Timor is relatively poor as mentioned above, however endowed with natural resources apart from the oil and gas reserves of the Timor Sea. Anderson and Deutsch (2001) note that oil and gas are amongst the few high value natural resources that can be exploited for economic purposes, with the Timor Sea thought to be one of the world’s 20 richest oil deposits.
Fishery stocks that are poorly regulated and managed may also comprise an important economic resource. UN (2000) concluded that East Timor’s marine ecosystem, if used in a sustainable fashion,
has considerable potential to support economic development and sustain the population, thereby contributing to poverty reduction. Fisheries development is currently guided by a Strategic Plan formulated by the Department of Fisheries and Marine Environment (FME) (UN, 2001). Strategies must recognize these limitations, but must seek to develop sustainable domestic capabilities that optimize natural resources while also protecting the natural environment.
East Timor’s economy is largely agricultural and a society which is largely agrarian. However, East Timor is a mountainous country that is less than ideal for agricultural production. Its soils are derived from limestone and metamorphosed marine clays and are, consequently, generally of low fertility. The generally steep terrain, shallow soils and heavy rainfall events during the wet season, render many parts of East Timor very prone to erosion. Deforestation and grazing often adds to the problems of loss of topsoil. Ongoing erosion causes sedimentation of rivers, reservoirs and near-shore marine areas (World Bank, 1999).
Data collected by the IMF (2005) from the poverty assessment undertaken in 2001 showed that agriculture is the main source of income in 94% of the rural areas and that 97% of the cultivable area have farms, and that 57% have some irrigation. It was also found that the crops produced were predominantly used for self-consumption (subsistence), with less than 20% of the villages selling most of their rice or maize. Consequently, it appears that there is little surplus agricultural production in the nation. The cash income of farm families in 2002 was generated mainly by the sale of chickens, pigs, eggs and some vegetables (IMF, 2005). Coffee for export is the main cash crop and engages over one-quarter of Timor-Leste farming households. Like other crops, coffee is grown with limited inputs and modern techniques.
From INTERNATIONAL DEVELOPMENT PAPER for Concept of Community Development by Luc Sabot