Bloomberg
East Timor, which gained independence from Indonesia five years ago, is threatened with poverty and must use revenue from its oil and gas reserves to support agriculture, its main industry, a United Nations report said.
``Though politically the country is free, its people remain chained by poverty,'' the UN Development Program said in a report published today. ``The primary task is to create a more dynamic rural economy.''
East Timor and Australia in January signed an accord to split royalties from the Sunrise gas field in the Timor sea, operated by Australia's Woodside Petroleum Ltd. The accord will provide revenue of about $4 billion over the project's life.
East Timor, or Timor-Leste, a country of about 1 million people, voted for independence in a 1999 referendum after a 24- year occupation by Indonesia, which invaded the territory when it was a Portuguese colony in 1975. The UN is reducing its mission, established in 2002 to help East Timor become fully self- governing. The country is about 500 kilometers (310 miles) north of Australia.
``Growth will have to start with agriculture, which employs nearly three-quarters of the labor forces,'' Sukehiro Hasegawa, the representative of the UN Development Program in East Timor, said in the report. East Timor grows coffee, rice and maize among its agricultural produce.
East Timor's share of oil and gas resources in the Timor Sea, including the Sunrise project, is about $10 billion, Australian Department of Foreign Affairs and Trade estimates.
Reducing Poverty
Funds from oil and gas will help the country reduce poverty by one-third by 2015 provided they are used for rural development, education, health care and job training, the report said.
That's a challenge in a country where per capital yearly income is $370, it said.
Most investment is directed to East Timor's capital, Dili, and only about one-third of public expenditure and one-fifth of goods and services target rural areas.
Half the population lacks safe drinking water, 60 out of 1,000 infants die before their first birthday and life expectancy is just over 55 years of age, according to the report. Two-thirds of women and half of the men between 15 and 60 years of age are illiterate, it said.
``Our institutions and our people are inadequately equipped with the skills required to deal with more complex issues related to economic and social development of our country,'' East Timor's President Xanana Gusmao, said in a message for the report.
East Timor will need international assistance to hold presidential and parliamentary elections in 2007, the first such polls since its independence from Indonesia, UN Secretary General Kofi Annan said in January.
The international community should remain in East Timor beyond the deadline in May this year for the end of the mandate of the UN assistance mission, Annan said.
After the independence vote, pro-Indonesia militia groups destroyed about 70 percent of property and killed more than 1,000 East Timorese.
To contact the reporter for this story: Paul Tighe at ptighe@bloomberg.net .
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