TIMOR-LESTE DEVELOPMENT PARTNERS MEETING

UNCLAS SECTION 01 OF 02 DILI 000118

SIPDIS

FOR EAP, USAID

E.O. 12958: N/A
TAGS: EAID ECON EFIN SOCI TT
SUBJECT: TIMOR-LESTE DEVELOPMENT PARTNERS MEETING


1. Summary: The Government of Timor-Leste (GoTL) held its
annual international donor development assistance meeting April
2-4, 2009, with delegations from over 32 countries and 350
participants attending. The Minister of Finance and Deputy
Prime Minister chaired the Timor Leste Development Partner's
Meeting (TLDPM) under the banner, "Goodbye Conflict, Welcome
Development". Timor-Leste officials presented accomplishments
in 2008, development priorities for 2009, and the GoTL's
intention to enact a medium-term `Strategic Development Plan' by
the end of 2009. Other key issues discussed throughout the
three day event included managing the potential impact of the
global financial and economic crisis on Timor-Leste, the
consequences of declining oil prices on the GoTL's Petroleum
Fund, the primary source of central government revenue, and the
need to generate medium and long term strategic objectives to
improve sector planning and donor coordination.




2. At the opening session, President Ramos-Horta praised USG
development assistance as exemplary for providing over 70% of
its resources to rural development and agriculture (indeed, the
United States was the only country singled out for praise by the
President),and encouraged other donors to follow suit. Prime
Minister Gusmao stressed the importance of the GoTL's seven
national priorities for 2009 -- agriculture and food security,
rural development, human resources development, social services
and protection, public safety and security, clean and effective
government, and access to justice -- as its response to a recent
assessment that poverty in Timor-Leste rose during 2001 to 2007.
In a bilateral meeting with the USG delegation, the Minister of
Finance stated that the United States is viewed by the Timorese
government as a `great achiever' among all the donors. End
Summary




3. On April 2nd, the U.S. delegation led by Ambassador Klemm
provided a briefing on U.S. foreign assistance priorities and
programs, and led discussions on ways to enhance mutual
collaboration and coordination, in separate meetings with
representatives from the World Bank (WB),the United Nations
(UN) and the GoTL. In the UN meeting, the discussion focused on
ways to improve coordination and help the GoTL set development
priorities. The U.S. delegation stressed the need for increased
coordination of programs in the justice sector where both USAID
and UNDP have established activities, and to link work in the
formal justice sector with traditional Timor Leste approaches.
The World Food Program welcomed the recent large U.S.
contribution to their food security programs in Timor-Leste.
There was agreement that enhanced donor coordination was needed
in all sectors; and that the GoTL needed help in setting
priorities among the numerous areas for development assistance
that it has identified. End Summary




4. In the WB meeting, the USG delegation's presentation of its
development strategy led to a more detailed discussion on joint
activities. Ambassador Klemm recommended that a mapping
exercise of all past and present donor assistance be generated
so that the GoTL could be better informed on all current
programs, especially in the justice sector but also in
agriculture and elsewhere. Since USAID has initiated a
Geographic Information System program for all its activities
throughout the country, the USG could play a leading role for
this mapping exercise with GoTL. The WB offered to establish a
database and possibly a website to facilitate the sharing of
information and reports. The WB also mentioned that an Interim
Strategy Note for Timor-Leste, a prelude to a more comprehensive
Country Assistance Strategy, is due later this year.




5. In the bilateral meeting with select GOTL Ministers or their
representatives, Ambassador Klemm opened the USG delegation's
presentation by stressing that USG priorities in Timor-Leste aim
to promote stability and economic and social development.
Emilia Pires, Minister of Finance, led the GoTL delegation,
along with Jose Luis Guterres, Vice-Prime Minister and
Coordinator for Social Development. Ambassador Klemm said the
U.S. remains a strong friend and partner of Timor- Leste. He
said that the USG's foreign assistance budget of $25 million per
year will likely remain roughly constant in the medium term.

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USAID Director Mark Anthony White gave a briefing on the
Mission's programs, key results, and priorities for a new U.S.
Country Assistance Strategy.




6. Minister Pires said the U.S. is viewed by the GoTL as a
`great achiever' amongst all donors in the country. The
Minister thanked the USG for implementing projects in rural
areas and for providing assistance by doing and not just
talking. The Minister also said that the GoTL wants to put
their development programs on a "fast track," to take successful
USG and other donors' programs and "replicate them everywhere".
Other Ministers of the GoTL said they were pleased with U.S.
assistance in all sectors but stressed that continued support is
needed especially in police training, health, water/sanitation,
and agriculture.




7. The Finance Minister also noted that in spite of not having
been approved last year as an MCC Compact eligible country, the
GOTL remains committed to the MCC program and has submitted its
Threshold Program proposal ahead of the scheduled April 17 due
date.






8. Timorese President Ramos-Horta and the Prime Minister
Gusmao, as well as other Ministers responsible for the oversight
of each national priority, spoke at the April 3 and 4 TLDPM
plenary meetings. The President thanked all donor partners for
their contributions to the development of Timor Leste and
specifically mentioned his appreciation for USG development
assistance, describing its focus on rural development and
agriculture as exemplary. He asked other donors to follow the
U.S. example and do more in rural development, specifically to
create conditions of peace and stability to promote development
and investment. He also mentioned the `obligation' that his
government and donors have towards using assistance effectively.
USG assistance continues to be targeted at all of Timor-Leste's
national priorities for 2009, agriculture and food security,
rural development, human resources development, social services
and protection, public safety and security, clean and effective
government, and access to justice.




9. During plenary interventions by donor delegations, most
countries outlined their assistance programs in Timor-Leste.
Several noted concern that the recent sharp increase in central
government expenditures may not be sustainable given the modest
size of the Petroleum Fund, declining oil prices, and the
absence of any other meaningful source of government revenue.
During the U.S. intervention, the Ambassador reinforced concerns
with budget sustainability; encouraged greater transparency,
especially in government procurement; stated that Timor-Leste
has "no stronger partner" in its fight against corruption; and
urged rapid improvement in the legal and regulatory environment
faced by the private sector in Timor-Leste, notably the
enactment of a land law. He concluded with a note of optimism,
linking the country's continued stability (14 months without
major conflict) as providing hope for further social and
economic development of Timor-Leste.
KLEMM