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Political, Economic, and Social Developments 2007–18

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The Creation of the East Timorese Economy

Part of the book series: Palgrave Studies in Economic History ((PEHS))

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Abstract

This chapter examines the development from 2007 until the present day. It includes detailed analyses of politics, fiscal policy, and social progress. After 2006, an aggressive spending policy began, on the one hand, via the transfer programs for veterans and internally displaced people, and, on the other hand, through investments in infrastructure as part of the strategic development plan. From 2007 until 2016, public expenditures expanded ten times, with the result that the size of the petroleum fund began to shrink from 2015. The new spending policy boosted economic growth substantially during a couple of years, but, thereafter, the rate declined. As it seems, income per capita has increased and the incidence of poverty has decreased. Also, ownership of consumer durables, education, and health care have developed favorably. However, malnutrition is much worse in East Timor than in comparable countries. Periodic food shortages continue to be a problem.

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Notes

  1. 1.

    Kingsbury (2009), pp. 207–208.

  2. 2.

    Ibid., p. 191.

  3. 3.

    Vieira (2012), p. 10.

  4. 4.

    United Nations Security Council (2007), p. 16.

  5. 5.

    United Nations Security Council (2008), p. 16, van der Auweraet (2012), p. 6.

  6. 6.

    United Nations Security Council (2008), p. 1, International Crisis Group (2008), p. i.

  7. 7.

    Van der Auweraet (2012), p. 8.

  8. 8.

    Kingsbury (2009), p. 207. It was, however, far from always the case that the money received was used for housing purposes (Tusinski 2019).

  9. 9.

    Van der Auweraet (2012), p. 8.

  10. 10.

    International Crisis Group (2008), p. 3.

  11. 11.

    United Nations Security Council (2009a), p. 13.

  12. 12.

    United Nations Security Council (2009b), p. 14.

  13. 13.

    Durand (2006), p. 74.

  14. 14.

    Taylor (1999), p. 135.

  15. 15.

    Smith (2004), p. 287.

  16. 16.

    IPAC (2014), p. 12.

  17. 17.

    World Bank (2013a), p. 8.

  18. 18.

    International Crisis Group (2011), pp. 1–2.

  19. 19.

    Ibid., p. 1.

  20. 20.

    Ibid., p. 6. The number—‘unrealistically high given that Timor-Leste has a population of around one million and more than half of them are too young to have participated in the resistance struggle’—has remained about the same in recent years (Kent 2019, p.185).

  21. 21.

    Kent and Kinsella (2015), p. 214.

  22. 22.

    Ibid., p. 220.

  23. 23.

    Ibid., pp. 216–217.

  24. 24.

    World Bank (2013a), p. 47.

  25. 25.

    Ibid., p. 3.

  26. 26.

    Kent and Kinsella (2015), p. 217.

  27. 27.

    International Crisis Group (2011), pp. 14–15, IRIN (2014).

  28. 28.

    International Crisis Group (2013), p. 5.

  29. 29.

    Ibid.

  30. 30.

    Ibid., p. 6.

  31. 31.

    Shoesmith (2013), p. 131.

  32. 32.

    Público (2008), Shoesmith (2013), p. 132. For the evolution of Gusmão’s ruling strategy, see Kammen (2019).

  33. 33.

    Leach and Kingsbury (2013), p. 8.

  34. 34.

    Shoesmith (2013), p. 132.

  35. 35.

    Ibid.

  36. 36.

    Ibid., pp. 133–134.

  37. 37.

    Ibid., p. 132.

  38. 38.

    Ibid., p. 126.

  39. 39.

    Ibid., pp. 128–129.

  40. 40.

    International Crisis Group (2013), p. 9.

  41. 41.

    Ibid., p. 10.

  42. 42.

    Ibid., pp. 9–10.

  43. 43.

    Leach and Kingsbury (2013), pp. 13–14.

  44. 44.

    Ibid., p. 22.

  45. 45.

    Ibid.

  46. 46.

    Ibid., p. 23.

  47. 47.

    The Economist Intelligence Unit (2017), pp. 8, 34, (2018), pp. 6, 26. For a brief summary of the struggle to build democracy in the country, see Feijó (2019).

  48. 48.

    Cummins and Leach (2013), p. 176.

  49. 49.

    Ibid., p. 173.

  50. 50.

    Ibid., p. 170.

  51. 51.

    Horta (2014).

  52. 52.

    International Crisis Group (2013), p. 13.

  53. 53.

    Ibid., p. 15.

  54. 54.

    Leach (2015).

  55. 55.

    Pereira (2014).

  56. 56.

    Kingsbury (2015), Panda (2015).

  57. 57.

    Government of Timor-Leste (2015a).

  58. 58.

    UNDP (2014).

  59. 59.

    Leach (2015). For a discussion of intergenerational issues in East Timorese politics, see Nygaard-Christensen and Bexley (2019).

  60. 60.

    Beuman (2015a).

  61. 61.

    Beuman (2015b).

  62. 62.

    Beuman (2014a).

  63. 63.

    The law proposal is found in Human Rights Watch (2014a). For criticism, see, for example, Robie (2014a, b), Gosford (2014), Gillies (2014), Human Rights Watch (2014b), Kine (2014), Betteridge (2014), and La’o Hamutuk (2016a).

  64. 64.

    International Federation of Journalists (2014).

  65. 65.

    Beuman (2014b).

  66. 66.

    La’o Hamutuk (2016a).

  67. 67.

    Beuman (2016a).

  68. 68.

    SAPO 24 (2016).

  69. 69.

    Murdoch (2016).

  70. 70.

    Beuman (2016b).

  71. 71.

    Life at Aitarak Laran (2016).

  72. 72.

    Diário de Notícias (2016).

  73. 73.

    The political system of East Timor is usually labeled ‘semi-presidential’, that is, the country has a popularly elected fixed-term president and a prime minister and a cabinet that is responsible to a parliament (Elgie 1999). Other definitions add one more requirement: that the president should have ‘considerable powers’ (Duverger 1980, p. 166). For the debate of the case of East Timor, see Kingsbury (2013), Feijó (2014, 2016a, b), Strating (2016), and Beuman (2016c, d).

  74. 74.

    The Economist Intelligence Unit (2015a), Guide Post (2017).

  75. 75.

    Gomes (2017), Kingsbury and Maley (2017).

  76. 76.

    Feijó (2017).

  77. 77.

    Election Guide (n.d.).

  78. 78.

    Davidson (2017a), Black (2017).

  79. 79.

    Downer (2017).

  80. 80.

    European Union Election Observation Mission (2017).

  81. 81.

    Asia Foundation (2017), p. 13.

  82. 82.

    Center for Insights in Survey Results (2017).

  83. 83.

    Asia Foundation (2017), p. 35.

  84. 84.

    Kingsbury (2017).

  85. 85.

    Leach (2017a), p. 2.

  86. 86.

    Leach (2017b), p. 2.

  87. 87.

    Feijó (2017), p.1.

  88. 88.

    Feijó (2018a), p. 2.

  89. 89.

    Ibid., p. 3.

  90. 90.

    Ibid.

  91. 91.

    European Union (EU) (2018).

  92. 92.

    The reason that a large share of the votes did not materialize in more seats is that fewer votes went to political parties that failed to meet the 4 percent threshold (Feijó 2018b).

  93. 93.

    The AMP kept its acronym but changed its name to Aliança de Mudança para o Progresso (Alliance for Change for Progress).

  94. 94.

    Feijó (2018c).

  95. 95.

    Ibid.

  96. 96.

    World Bank (2013a), p. 47. In 2011, the figure was a mere 1 percent.

  97. 97.

    Ibid., p. 52.

  98. 98.

    Ibid., pp. 50–51. Cf. also World Bank (2018d), for more statistics.

  99. 99.

    World Bank (2018b), pp. 33–34.

  100. 100.

    Ibid.

  101. 101.

    World Bank (2013a), pp. 1, 35.

  102. 102.

    Ibid., p. 40.

  103. 103.

    Wallis (2019), p. 43.

  104. 104.

    Kammen (2019), p. 43.

  105. 105.

    Democratic Republic of Timor-Leste (2011a).

  106. 106.

    International Monetary Fund (2007), p. 42.

  107. 107.

    World Bank (2018d), p. 50.

  108. 108.

    Ministry of Finance and the World Bank (2015), p. ix.

  109. 109.

    Ibid, p. x.

  110. 110.

    Ibid.

  111. 111.

    International Monetary Fund (2017), p. 2.

  112. 112.

    See Chapter 6.

  113. 113.

    International Crisis Group (2013), p. 28.

  114. 114.

    Ibid.

  115. 115.

    International Monetary Fund (2013), p. 30.

  116. 116.

    International Monetary Fund (2016), p. 5.

  117. 117.

    Doraisami (2018), p.255.

  118. 118.

    International Monetary Fund (2013), p. 5.

  119. 119.

    See Chapter 5.

  120. 120.

    See Chapter 4.

  121. 121.

    International Monetary Fund (2013), p. 22.

  122. 122.

    For a more detailed discussion of the private sector, see Chapter 4.

  123. 123.

    International Crisis Group (2013), p. 28.

  124. 124.

    Curtain (2018a), p. 1.

  125. 125.

    Ibid., p.2.

  126. 126.

    Curtain (2018b), p.1. For a summary of the remittance issue, see McWilliam and Monteiro (2019).

  127. 127.

    Wigglesworth (2018).

  128. 128.

    Ibid., p. 4.

  129. 129.

    Curtain (2018a), p. 4.

  130. 130.

    McWilliam and Monteiro (2019), p. 144. The figure is likely to be on the low side, since it does not capture undeclared funds carried back home in person.

  131. 131.

    Curtain (2018b), p.1. For a summary of the remittance issue, see McWilliam and Monteiro (2019).

  132. 132.

    McWilliam and Monteiro (2019), p. 142.

  133. 133.

    World Bank (2018d), p. 7.

  134. 134.

    World Bank (2007a), p. ii.

  135. 135.

    International Finance Corporation and Asian Development Bank (2007), p. 16.

  136. 136.

    International Monetary Fund (2016), p. 8.

  137. 137.

    Ministry of Finance and the World Bank (2015), p. 16.

  138. 138.

    Viñuela (2014), p. 356.

  139. 139.

    International Crisis Group (2013), p. 12.

  140. 140.

    World Bank (2013a), p. 29.

  141. 141.

    Ministry of Finance of Timor-Leste, General Directorate of Statistics (2016), p. 5.

  142. 142.

    Planning Commission (2002b).

  143. 143.

    Democratic Republic of Timor-Leste et al. (2003), World Bank (2003).

  144. 144.

    Direcção Nacional de Estatística (2008).

  145. 145.

    World Bank (2016c).

  146. 146.

    Ibid., p. 21.

  147. 147.

    World Bank (2012).

  148. 148.

    Inder et al. (2014), p. 7.

  149. 149.

    World Bank (2013a), p. 18.

  150. 150.

    See also International Monetary Fund (2013).

  151. 151.

    As reported in IRIN (2011a). See also e.g. International Finance Corporation and Asian Development Bank (2007), p. 15.

  152. 152.

    IFPRI (2011).

  153. 153.

    World Bank (2018d), p. 20.

  154. 154.

    Ministry of Agriculture and Fisheries, Seeds of Life (2013), pp. 40–42.

  155. 155.

    General Directorate of Statistics et al. (2018), pp. 188–189.

  156. 156.

    National Statistics Directorate et al. (2010), p. 151.

  157. 157.

    IRIN (2011b).

  158. 158.

    World Bank (2016c), p. 36, Provo et al. (2017), p. 15. The underweight indicator does not distinguish between children who are thin and children who are short but have adequate weight. It has hence been replaced by stunting as the main anthropometric indicator for children (Provo et al. 2017, p. 18).

  159. 159.

    Provo et al. (2017), pp. 20–21.

  160. 160.

    Ibid., p. 22. The body mass index (BMI) is defined as the weight in kgs divided by the square of the height (m2).

  161. 161.

    National Statistics Directorate et al. (2010), Table 12.1.

  162. 162.

    Democratic Republic of Timor-Leste (2015).

  163. 163.

    Provo et al. (2017), p. 41.

  164. 164.

    For an overview of the main policy issues, see ibid., Chapters 4–7.

  165. 165.

    IRIN (2008).

  166. 166.

    Provo et al. (2017), pp. 98–99.

  167. 167.

    For more information, see National Statistics Directorate et al. (2010), p. 27.

  168. 168.

    Anderson (2014), pp. 305–306.

  169. 169.

    Ibid., pp. 307–309.

  170. 170.

    General Directorate of Statistics et al. (2018), p. 118.

  171. 171.

    Methods to improve maternal, child and neo-natal health in East Timor are discussed in Fabricant (2013).

  172. 172.

    Direcção Nacional de Estatística (2008), Tables 6.16, 6.19, 6.22, 6.25, 6.28.

  173. 173.

    National Statistics Directorate et al. (2010), p. 173.

  174. 174.

    Direcção Geral de Estatística (2013a), p. 52.

  175. 175.

    General Directorate of Statistics et al. (2018), p. 211.

  176. 176.

    Ibid.

  177. 177.

    National Statistics Directorate et al. (2010), p. 23.

  178. 178.

    Ministry of Health (2004), p. v.

  179. 179.

    United Nations International Children’s Education Fund—UNICEF (2003), p. 45, National Statistics Directorate et al. (2010), p. 24.

  180. 180.

    Quoted in IRIN (2013).

  181. 181.

    Hou and Asante (2016), p. 4.

  182. 182.

    General Directorate of Statistics et al. (2018), p. 261.

  183. 183.

    Direcção Geral de Estatística (2013a), p. 48.

  184. 184.

    General Directorate of Statistics et al. (2018), p. 130.

  185. 185.

    Direcção Nacional de Estatística, Ministerio das Finanças (2008), Table 6.7.

  186. 186.

    Ministry of Health (2004), p. 2. Issues of mental health in East Timor are discussed in Barnes et al. (2019).

  187. 187.

    For a discussion of to what extent different types of health services favor the rich and the poor, respectively, see World Bank (2014a).

  188. 188.

    World Bank (2018d), p. 31.

  189. 189.

    Hou and Asante (2016), p. 9.

  190. 190.

    International Finance Corporation and Asian Development Bank (2007), p. 36.

  191. 191.

    UNDP (2018), p. 109.

  192. 192.

    Hou and Asante (2016), p. 12.

  193. 193.

    Ibid., pp. 25–26.

  194. 194.

    Ibid., p. 1.

  195. 195.

    Ibid.

  196. 196.

    Ibid., p. 28.

  197. 197.

    Ibid., p. 29.

  198. 198.

    Ibid., pp. 39, 36.

  199. 199.

    Ibid., pp. 43–44, 52.

  200. 200.

    Justino et al. (2011).

  201. 201.

    General Directorate of Statistics et al. (2017), p. 51.

  202. 202.

    Direcção Nacional de Estatística, Ministerio das Finanças (2008), Table 5.10.

  203. 203.

    General Directorate of Statistics et al. (2017), pp. 48, 52.

  204. 204.

    UNICEF (2003), p. viii.

  205. 205.

    General Directorate of Statistics et al. (2017), p. 59.

  206. 206.

    World Bank (2018d), p. 29.

  207. 207.

    World Bank (2004a), p. 5.

  208. 208.

    Direcção Nacional de Estatística (2008), Table 5.13.

  209. 209.

    General Directorate of Statistics et al. (2018), p. 27.

  210. 210.

    Ibid., p. 32.

  211. 211.

    World Bank (2018d), p. 30.

  212. 212.

    Ibid.

  213. 213.

    UNICEF (2003), p. xii.

  214. 214.

    SEPFOPE and DGE (2013), p. 33.

  215. 215.

    World Bank (2004b), p. xix.

  216. 216.

    UNICEF (2003), p. A I-30. The net enrolment rate is ‘the number of students of relevant ages enrolled in a particular level of schooling over the number of people of the relevant ages’ (ibid., p. A I-28).

  217. 217.

    UNDP (2018), p. 47.

  218. 218.

    World Bank (2004b), pp. 28–31, (2007a), p. 41, International Finance Corporation, and Asian Development Bank, (2007), p. 19, World Bank (2008), p. 2.

  219. 219.

    World Bank (2004b), p. 35–37.

  220. 220.

    International Finance Corporation and Asian Development Bank (2007), p. 22.

  221. 221.

    Ibid.

  222. 222.

    Direcção Nacional de Estatística (2008), p. 22. As noted in Chapter 5 in Volume 1, a voter survey carried out by the Asian Foundation obtained a much higher figure for Portuguese: 17 percent.

  223. 223.

    Note that the 2010 and 2015 figures include not only ability to speak.

  224. 224.

    General Directorate of Statistics et al. (2017), p. 48.

  225. 225.

    Note that a comparison of the index over time could be biased by changes in the methodology. Comparisons across countries should be less problematic.

  226. 226.

    La’o Hamutuk (2013a).

  227. 227.

    Direcção Nacional de Estatística (2008), Tables 9.1–9.9 provide such subjective measures on well-being for 2001 and 2007.

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Lundahl, M., Sjöholm, F. (2019). Political, Economic, and Social Developments 2007–18. In: The Creation of the East Timorese Economy. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-22052-5_3

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