Rod McGuirk – East Timor has a good chance of becoming financially independent in a few years through Timor Sea energy royalties, the World Bank told donor nations yesterday.
Delegates from 27 countries, including Australia, met in Dili today to consider East Timor's extraordinary request for $US77 million in direct budgetary aid for its first year of independence.
They were also presented with the new nation's development strategy, predicting that after 18 per cent growth in GDP in the last year, the East Timorese economy will contract next year with the United Nations withdrawal to follow full independence next Monday.
World Bank director for East Timor Klaus Rohland said much had been achieved in reconstruction and sustainable development during more than two years of UN administration. "East Timor has a good chance of being economically independent in a few years with revenue from offshore," Rohland told delegates.
The development plan predicts annual resource revenue from the Timor Sea will average almost $US100 million within five years. Development in the short term was expected to remain fragile and uncertain.
The strategy paper said East Timor, which will emerge as one of the 20 poorest nations in the world, was suffering from its decision to adopt one of the world's strongest currencies. "An increase in wage levels under UNTAET (UN Transitional Administration in East Timor) along with a very strong US dollar has weakened international competitiveness," it said.
One of the most difficult tasks facing schools was the extension of Portuguese as the official language and the standardisation of the local language Tetun, which varies from district to district.
Outgoing UN administrator Sergio Vieira de Mello reminded donor nations that 41 per cent of East Timorese lived below the poverty line of $US55 cents a day.
Chief Minister Mari Alkatiri said the challenge ahead was to raise the quality of life in East Timor. "We know that we have set the right development goals for East Timor," Alkatiri said. "We also know that they are ambitious."
An Australian delegation source described the budget as sensible and responsible.