The new government of Timor-Leste needs to be able to solve problems such as widespread unemployment and unsustainable economic growth.
By Sirisha Veera, Edited by Isabel Yeo
2017 has been a positive year for Timor-Leste politics. Despite initial fears, both the May presidential election and the July parliamentary election concluded peacefully. Mr Francisco Guterres was elected as President while The Frente Revolucionária de Timor-Leste Independente (FRETILIN), received the largest vote share in the parliamentary election. FRETILIN then formed a coalition government with the Congresso Nacional de Reconstrução de Timor (CNRT). The CNRT promised to contribute to the process of nation-building and to consolidate the democratic transition of the country.
Source: The Interpreter
Political stability was the first step in ensuring Timor-Leste’s development as a nation. Next, its leaders need to address the concerns of the Timorese electorate.
The new Prime Minister and President has promised the young nation stability and growth
“Now we will look forward to guaranteeing stability, ongoing development and to bring people out of poverty. This responsibility that the people now give us will be treated with the greatest sense of responsibility,” FRETILIN’s leader Mari Alkatiri told reporters. Alkatiri later became Prime Minister.
Alkatiri has a wealth of political experience. Shortly before Indonesia’s invasion of East Timor, he was appointed to be East Timor’s Politics Minister. After the country attained independence in 2002, he became Timor-Leste’s first Prime Minister. He later resigned in 2006 due to civil unrest. Nonetheless, Alkatiri’s political experience will undoubtedly serve him and Timor-Leste well.
62-year-old Francisco Guterres, popularly known as Guerre Lu-Olo, was sworn in as the country’s fourth President with 57.3% of the vote share. As a well-respected fighter for Timorese independence, Guterres has been committed to securing Timor-Leste’s future. The former guerrilla commander’s primary responsibility will be to maintain peace between politicians of different parties.
“This is the decision from the voters, from the people. Changes will happen in many aspects, and fundamentally, I want to change the people’s condition in health services, education and have a sustainable economy to accelerate national development,” said Mr Guterres during the early vote count.
The new government has promised to tackle the issue of youth unemployment
Unemployment is a massive problem in Timor-Leste, particularly among the youth. 20% of the Timor-Leste youth have been unemployed. For a country with 60% of its population aged 25 and below, this unemployment rate is severely high. FRETILIN has acknowledged this problem and announced its commitment to alleviate youth unemployment. Other parties have also expressed their concern over the welfare of the youth and their plans to help this demographic.
Source: Trading Economics
It has also announced its commitment to increase the Timorese standard of living
In 2015, the Asian Development Bank reported that 41.8% of Timor-Leste’s population lived below the poverty line (BPL), 54.6% of the population lacked access to electricity and that the infant mortality rate stood at 4.5%.
Timor-Leste’s Strategic Development Plan for 2011-2030 developed under the previous government outlined plans to build ‘four pillars‘ of social capital, infrastructure, economic foundation and institutional frameworks. The FRETILIN party has promised to develop further these plans to initiate improvement in the areas of health, education, agriculture and eradication of corruption. It also planned to ensure even development across city and rural areas.
Although the proposed national budget for State Expenditure in 2017 was US$1.4 billion, comparatively lesser than the 2016 budget of US$1.6 billion, parties advised greater spending on primary healthcare, education and sanitation services. The People’s Liberation Party (PLP) has also called for an end to pensions for government members. These plans, if executed well, will increase the standard of living for the Timorese people.
The new government should also consider restructuring the Timorese economy
The Timor-Leste economy has been highly dependent on its oil and gas industry. 90% of the nation’s economy has depended on its sovereign wealth Petroleum Fund. At its peak, the value of the Fund amounted to US$16 billion. While the government is working to expand the nation’s oil and gas industry, such dependence on one sector of the economy is risky. As the World Bank put it “the overriding fiscal challenge for Timor-Leste is to transition to a more sustainable economy.”
The government could diversify the economy by considering tourism as a source of revenue. With Timor-Leste’s beautiful landscape, rich culture and colourful history, there is much potential for a thriving tourism industry. Previous attempts to invest in tourism have shown that tourism is indeed profitable. A US$6.3 million tourism budget in 2013 generated an estimated US$14.6 million revenue in 2014. Greater investment would likely reap more significant benefits.
The next few years will be crucial for the nation
While the new government has yet to address Timor-Leste’s dependence on the oil and gas industry, the international community is cautiously optimistic about the plans and capabilities of these new leaders.
Timor-Leste’s new government needs to ensure that it steers the young state in the right direction. The following few years will be crucial for the country. The government needs to guide the nation through these initial stages of growth, seize present opportunities for development, and prioritise the welfare of the people.
“To avoid the resource curse, it will have to diversify the economy, especially to provide jobs for the enormous number of young people it has. Though it is a minority government, its prospects for stability in the short-to-midterm are positive,” concluded Swinburne University of Technology’s Professor Michael Leach.