United Nations Secretary-General Kofi Annan issued a report on East Timor Thursday, stressing what he termed "the vital necessity" of continued UN aid for the world's youngest nation.

Annan also urged donor countries and institutions to continue their support for Dili to "maintain successes achieved and to aid [East Timor] on its path to development, with a view to self- sufficiency". Among priorities listed in the report, which covers the final phase of the UN transition administration, July 2001 to May 2002, Annan underlined the repatriation of refugees still in Indonesian West Timor – for security "on both sides of the border".

"The great challenge" facing Dili and its partners, he said, was spurring economic development in a country with 40 percent of a population of 800,000 living in "the most absolute poverty", on less than 55 centimes per day.

The secretary-general's report, released in New York, underscored "notable progress" achieved under the UN administration in the "restoration of essential services", namely in the relaunching of infrastructures destroyed in the closing days of Indonesian occupation. UN peacekeepers had assured the necessary "environment of security" to allow "reconstruction and development activities", Annan said.