Development Plan for Poverty Reduction

Because East Timor is still a new nation, the development strategy plan should design programs and pursue initiatives that systematically address its main development goals.  The main development plan that needs to be address is the poverty reduction sector.  The specific strategies formulated by the Poverty Reduction and Rural and Regional Development of East Timor include the following as mentioned in the IMF (2005) report:

a) Transformation of the non-farm subsistence economy through small-scale, home and cottage industries and other business activities that generate income for the poor.

b) Provision of skills training and guidance to increase the ability of the poor in managing small businesses so that they become self-reliant.

c) Increased production in the rural areas through the application of appropriate farming techniques and promotion of agro-industries.

d) Identification and development of potential markets for products inside and outside the country.

The Poverty Reduction Strategy would focus on improving the productivity of the poor by achieving strong economic growth within an enabling environment.  This will catalyze and sustain contributions of the poor to national development.  Government would have to provide basic social and economic services to the poor, nurturing and promoting their entrepreneurial initiatives, and prohibiting discrimination based on gender, ethnic origin, language, or geographic location. Because poor people in East Timor are engaged primarily in agriculture (including fisheries and forestry), improving productivity in this sector is a high priority.  Proposed initiatives include rehabilitation and construction of irrigation systems and their improved operation, introduction of water harvesting techniques, wider distribution of improved seeds of cereal crops, fruits and vegetables, improved livestock health, improved management of fishing, and sustainable management of forests and other natural resources.  These initiatives will need to be undertaken with the participation of the communities that depend on them.  As reported by the UN and the East Timor Government (2004), improvements in marketing and infrastructure are planned for this new nation. The micro-enterprise segment of society (a substantial part of the informal economy) has been an important contributor to growth in developing nations.  A large number of people work in micro-enterprises or pursue very small independent activities to subsist.  Expansion of opportunities and productivity improvements in this sector are crucial, not only for rural families but for those in urban slums.  The development plan must address provisions made for training, quality-improving technologies, support services, and micro-credit (UNDP, 2009). A critical requirement for poverty reduction is to strongly enhance opportunities in the formal private sector, where growth and employment can be achieved in manufacturing, construction, trade, transport, tourism, and many domestic services.  These would depend largely on government policies and legislation being formulated to improve the private sector and the ability of East Timor to sustain both domestic and foreign investment (Da Costa, 2000).  Poverty eradication in Timor-Leste as indicated by the UN (2009) report calls for multiple efforts, including the following:

  • There is a need for agricultural policies that lead to adequate levels of food self-sufficiency.  This strategy would lessen dependency of Timor-Leste on imported food items.
  • It is necessary to control the inflation rate to ensure that the poor, who are vulnerable to macroeconomic shocks, are insulated from the risk of reduced purchasing power.
  • Investment must promote the business and industrial sector through the creation of a conducive investment climate, to ensure that people have alternative employment opportunities in the non-agriculture sector.
  • Distribution of agricultural produce and farmers’ access to the market and financial services should be improved in order to bring about a transformation from subsistence agriculture to commercial agriculture.  The purpose of this is to generate an income for farmers and increase the percentage of paid workers in the agriculture sector.

Poverty reduction cannot occur without the provision of infrastructure that includes an effective network of roads and bridges, efficient seaports and airports, reliable electric power, a telecommunications system, and postal services.  The IMF (2005) document indicate that agricultural and business developments are crucially dependent on this infrastructure, and trade, tourism, and foreign investment cannot be encouraged without it.  Consequently, a poverty reduction strategy is an integrated process that requires a pervasive effort by government and international donors who will play a major role in assisting East Timor’s development.


From INTERNATIONAL DEVELOPMENT PAPER for Concept of Community Development by Luc Sabot

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