Dili – Foreign donors have confirmed their support for the struggling new nation of East Timor, a World Bank spokesman said at the end of a semi-annual meeting here.

Sixteen delegates including Japan, the European Union, United States and multilateral agencies gathered for the day and a-half meeting. "The donors will continue to support Timor Leste's [East Timor's] development regardless of what has been achieved," the spokesman, who declined to be named, told AFP.

On Wednesday East Timor signed a memorandum of understanding with Finland for 1.2 million dollars to be channeled through the World Bank for "capacity building." The spokesman said he was not aware of any other new aid pledges at the meeting.

Upon independence just over one year ago East Timor was the poorest country in Asia. The economy is contracting and still greatly reliant on foreign assistance. Forty percent of the population lives below the poverty line of about 55 cents a day.

Basic human needs such as health, food and shelter are a top priority, Sukehiro Hasegawa, the United Nations' second-highest official in East Timor, said at the start of the meeting.

Hasegawa urged East Timor's development partners to provide more support so that "tangible results" can be achieved in agricultural production, water supply, sanitation and basic infrastructure.

Other challenges include bridging the gap between East Timor's cities and the rural areas where most of the people live, the need for strengthening public administration, the prevention of corruption and nepotism, support for Portuguese-language education and empowerment of women and vulnerable groups, the UN said.

Despite the challenges that remain, the meeting began with widespread praise from development partners for how much has already been achieved, the UN said.

The country remains burdened by an unemployment rate estimated at more than 70 percent, although Foreign Minister Jose Ramos-Horta said recently employment is higher than it was two years ago. He said the agricultural sector has returned to pre-1999 levels of production but admitted East Timor lacks foreign direct investment.

East Timor became independent after a UN administration lasting 31 months attempted to rebuild the country's infrastructure from scratch. Departing Indonesian troops and their militia proxies carried out a scorched earth policy that left much of the country in ruins in 1999.