Dili – The creation of jobs to invigorate East Timor's feeble economy is the Dili government's main objective, Prime Minister Mari Alkatiri said Wednesday at the opening of an international donor conference in the Timorese capital.

Alkatiri told the conference, the eighth of international representatives and Timorese leaders, that two-thirds of his country's GDP was dependent on government spending and this reliance has to be reduced. Eighty percent of state spending is financed by international aid, he added, making it difficult to cut back the state's pivotal role in the national economy.

The Timorese leader gave the conference a blow-by-blow account of the evolution of his country's dire economic situation and warned this could deteriorate further in 2004 with the withdrawal of the United Nations mission. The current scenario has been worsened by the delay of Timor's rainy season, which has led to "a significant increase in agricultural prices", which could affect Timorese farmers competitiveness and foment a "more severe cycle of crisis", warned Alkatiri.

The reduction of Timor's unemployment, which affects 50 percent of its young people, is "the main challenge faced by the government", Alkatiri said, noting that 16,000 people annually were becoming jobless. Specific action to tackle the structural unemployment will comprise "special interventions, including the improvement of agriculture by improving production techniques", Alkatiri said, adding that the Dili wants more national and foreign investment to support family and cooperative farming and the participation of SMEs in the development of national infrastructures.

Alkatiri told the donor meeting his government had taken over a country "with little governmental experience" and inherited a state "with no memory and a lack of know-how, discipline and institutional and cultural life", which hindered policy implementation.

Dili's head of government wound up his introductory address by saying his government will follow Norway's example in managing Timor's future oil receipts, which will be invested for future generations, in addition to supporting current state spending.