Offering public financial management advice, analysis and history to Timor-Leste
Supporting DFAT's Timor-Leste Governance for Development Team on public financial management issues
Timor-Leste is at a critical point in its development. The experience of other post-conflict, resource rich fragile states demonstrates that the transition from resource dependency towards a broad-based economy will have to be carefully managed.
Nonetheless, the revenues that have been and will continue to be generated from the successful exploitation of the country’s hydrocarbon resources, provide the government of Timor-Leste with an opportunity to improve public service delivery and to diversify the economy.
In recognition of this opportunity, in 2011 the government released its 20 year Strategic Development Plan, which seeks to develop the economy in an equitable way with the aim of alleviating poverty – particularly in the districts – through its petroleum wealth.
As the government scales up its spending to deliver on the plan, it will need to develop effective budgetary and financial systems, and the human capacity in government to allow it to properly manage this expenditure.
The government also faces efficiency and productivity challenges in the delivery of basic services. A healthy and well educated population is critical for the country’s long term development prospects. However, the limited effectiveness and efficiency of the public services and frontline professionals, such as teachers and health workers, severely constrains service delivery. The interdependence between central government agencies and Line Ministries also means that meeting the Strategic Development Plan’s targets for improving service delivery is linked to improvements in central agency systems. Australia’s Department for Foreign Affairs and Trade (DFAT) has recognised both the opportunity and need to contribute to poverty reduction in Timor-Leste through economic development and improved service delivery.
Between 2013 and 2014, we provided support to DFAT’s Timor-Leste Governance for Development team on public financial management issues in Timor-Leste. This included leading the team through an overview of the fiscal history of Timor-Leste’s government agencies through analysis of the budget documents, preparing a comprehensive guide to the public financial management processes and practice in Timor-Leste both in theory and in recent practice, and a public financial management analysis of sectoral programs in health, education and infrastructure. These measures will have a significant impact on the capacity of the government of Timor-Leste to appropriately manage its petroleum wealth for the benefit of its people.